- >Want to Get Paid in Bitcoin? It’s Not for the Faint of Heart
Want to Get Paid in Bitcoin? It’s Not for the Faint of Heart
Bitcoin has made the world sit up and pay attention these past few months. With a crazy bull run and a wave of institutional money, the landscape for the world’s biggest cryptocurrency has changed. But even with all that happening, the currency remains a far-fetched phenomenon to many. In my conversations with most people, they’ve certainly heard of Bitcoin, but beyond that, it’s all clear as mud. I’m someone who lives in Africa and works for and gets paid in Bitcoin. Now is as good time as any to write about my experience being paid in Bitcoin.
I’ll try to talk about the process, as well as correct some of the misconceptions. For instance, is being paid in Bitcoin, uh, some magic door to permanent wealth and riches? Is it some uber-complex process that’s not worth the hassle?
Hope Mutie | Apr 8, 2021
The Bitcoin Scene in Africa
First, let’s get a sneak peak of Bitcoin in Africa. It’s basically a handful of countries that puts the continent on the Bitcoin map.
For example, Nigeria has the second-largest market on the Paxful exchange after the US, and the country’s citizens Google about Bitcoin more than anywhere else in the world. Tech-savvy Zimbabweans turned to Bitcoin after the local currency’s soaring inflation. Currently, a few countries also have Bitcoin ATMs, with South Africa taking the lead.
How I Got Started Being Paid With Bitcoin
My journey with receiving Bitcoin as payment was not planned. I’d been writing about cryptocurrencies and Bitcoin for a while, but I was a spectator when it came to actual market participation. Now it’s just a few months since I started receiving Bitcoin as payment for my work.
As far as I know, I intend to stay in the Bitcoin economy. You see for me, it goes beyond the Bitcoin ‘notoriety’ of overnight millionaires. It’s the ability to participate in this magical internet currency that’s censorship-resistant, unmanipulable, and open to everyone regardless of their origin or social status.
What’s It Like?
Bitcoin is nothing like your typical currency. First, the currency’s system is not controlled by any one person.
There are no intermediaries brokering transactions, and the currency is purely internet-native. Bitcoin exists in the form of an electronic file stored in a ‘digital wallet’. Oh, and it is also quite volatile. That means it goes up and down all the time. Sometimes at a tremendous speed! With this extraordinary set of characteristics, you have a transaction process that’s novel and different.
First, since Bitcoin is highly volatile, its value between days (hours even) could change dramatically. That means you and the person paying you have to agree on a specific date and time to make the payment. Or, like in my case, you could take the average of that day’s high and low and have it as your reference.
Now let’s keep the math simple. The amount of Bitcoin you receive will be the amount of money in the denomination you’re being paid in, divided by the value of Bitcoin in that denomination. Let’s say you’re supposed to receive $1000 and the value of Bitcoin that day is $50,000. You’ll receive 0.02 BTC. Easy as a breeze, right? Now let’s get to the receiving part.
Like I’ve said above, Bitcoin exists electronically in a digital wallet. That means for you to receive Bitcoin, you need to have a cryptocurrency wallet. A crypto wallet can be non-custodial or custodial. A non-custodial wallet gives you full sovereignty over your funds. With a custodial wallet, a third party, such as an exchange, holds your funds. (Learn more).
When you want to receive Bitcoin, your crypto wallet will generate an address you’ll provide to the sender. The sender will then copy-paste that address to their wallet and click Send. A Bitcoin transaction will take three confirmations before you can see the funds reflect in your wallet. From my experience, this takes an average of 20 to 30 minutes. Of course, this could vary widely depending on how busy the network is.
Using Bitcoin/ Cashing Out
In conversations with the uninitiated, the most central question is usually: how do you turn Bitcoin into money? Usually, I tell them first of all, Bitcoin is money. Then I tell them Bitcoin is different from ‘normal’ money or government money.
When I receive Bitcoin, I can do any of several things with it. I can hold it and wait for it to rise and get, uh, more bang for my buck. I can cash it out to get ‘normal’ money. I can spend it for transactions in (very few) places that accept Bitcoin payments.
Bitcoin exchanges are platforms where you can sell/buy Bitcoin. Exchanges work in a peer-to-peer fashion, meaning there’s no third party involved in the transaction. Cashing out is quick and seamless. Localbitcoins and Paxful are quite a hit in Africa. Both employ an escrow service that allows you to release your BTC only after you receive payment. Binance and Coinbase are also kind of popular.
Why Would I Accept Bitcoin As Payment?
Well, for one, it’s rather cool. Seriously though, there are many reasons why someone could accept being paid in Bitcoin. I’m going to list those that resonate with my experience.
Bitcoin is a wonderful investment option. Having part of my investment portfolio in Bitcoin is exciting. There is a finite amount of Bitcoin on the planet, and so stacking sats is one way to get your share of the entire Bitcoin pie.
Bitcoin allows me to receive payment from the other corner of the globe within minutes. I can choose the cash-out channel that’s convenient for me. Also, the transaction won’t be halted and frozen due to ‘suspicious’ activity. My money is my money, period.
3. Low fees
The fees involved in transacting in Bitcoin are way more fair than the crazy 3% of the value of traditional international transactions.
All I need to receive Bitcoin is an internet connection and a crypto wallet. Even if I had no credit card or bank account, I’d still be able to interact and benefit from this economic phenomenon. Unlike with the bank, I don’t need to fill in some form to get in, or pay an account reactivation fee if my account stays dormant too long.
The Downsides of Being Paid in Bitcoin
Like with everything in life, receiving payment in Bitcoin has its cons.
1. Not For The Faint Of Heart
Bitcoin fluctuates quite wildly. You can watch your money even double in value in just days. But you can also watch it collapse to the wrong side of the zeros with the same speed.
2. Not Much Of a Spending Option
Bitcoin is yet to penetrate the market in such a way that it can be used for daily transactions. That means to pay for things, I have to convert it into traditional currency.
It’s a Pleasure to be an Early Adopter
Regardless of the upsides or downsides, it is a real pleasure to be an early adopter of this new economic paradigm.
My employers are half a world away, yet they are still able to pay me with basically zero friction. The autonomy that Bitcoin gives me is novel, and much is still left to be discovered about how to live in this way. At least for the time being, I am excited to be a part of the global financial revolution being built on, and around Bitcoin.