Would you like to take your salary in the form of a bitcoin?
Bitcoin. A lot of people talk about it, but very few of them have it.
Would you like to pay your hard cash with crypt money?
From the year ahead, Japan-based Internet firm GMO Group will join crypto-paying companies for its employees.
More than 4 employees of the company were offered the option of paying a part of their wages with Bitcoin.
Critics of the GMO Group say it is a marketing campaign, noting that it comes at a time when the relevance of financial technology is as high as ever.
But Bitcoin also carries the risks: the unstable virtual currency has experienced a sharp decline last week, then again by 50 percent.
What does this mean for the employer and the employee?
How is it working?
Bitcoin salaries are usually calculated based on a specified day and time of the digital currency.
Simply put, if Bitcoin’s value is $ 10,000 and he wants to get his $ 10,000 in digital currency, it will get 0.1 Bitcoin.
Employees who choose to sell immediately will receive the same money in cash (as long as the sale has already settled).
But those who choose to keep their crypt money in their hands – whether it is a day, a week or a year – will acknowledge Bitcoin’s appreciation or loss.
This thousand dollars can turn into a digital money worth five thousand dollars, and it can fall to a near-zero amount …
For this reason, those opposed to the practice argue that paying salaries with Bitcoin encourages people to gamble.
“If an employee earns a salary in the form of Bitcoin, it can also take the form of a lottery ticket,” says professor Massimo Massa from INSEAD, a finance school.
“They are participating in a game.”
Massa adds that employees should be warned that “the value of Bitcoin is not a guarantee of increased value, and that there is no value in reality”.
Despite repeated warnings by economists and analysts that the decline of Bitcoin is near, an increasing number of people are after Bitcoin.
After a rapid increase in Bitcoin’s value, Bitwage, a platform for converting wages into crypto money, received thousands of new users this year.
Bitwage founder Jonathan Chester says, “Nowadays many people want to join and sometimes they want their salaries to be paid in Bitcoin.”
This year, the company turned its salary to Bitcoin for $ 30 million for 20 thousand users in the US, Europe, Latin America and Asia. Some of the users were working on Google, Facebook, GE, Philips, the United Nations and the US Navy.
Most of these people started using this service at their will, not through their companies.
Chester says he turns 15 percent of his salary into Bitcoin and he believes it is a way to save Bitcoin or crypto money without worrying about whether he bought it at the right time.
Their processes spread over time, reducing the risk of depreciation in theory, with a lower intake of bitcoin.
What about tax?
As it is difficult to generalize and as the crypto money industry develops, tax rules seem inevitable.
Wherever they are in the world, employees will generally be held liable for paying income tax on their Bitcoin salaries. This will be calculated based on the value of the date on which Bitcoin paid salaries.
However, depending on tax laws, as in the case of stocks, employees may also have to pay the value-added earnings tax if Bitcoin gains value.
What kind of benefits do the employers have?
Some companies working in the crypto money industry have been offering salaries in the form of Bitcoins for years.
As a result, if you are early and buy at a much lower price, it may be wise to pay the salaries now.
But for others, this is all about business strategy.
For example, Japan-based GMO Group says they want employees to think about crypto money.
The company recently stepped into crypto money trading and crypto mining.
For this reason, at least some of their employees want to have Bitcoin experience directly, and they say that “crypto is vital to the growth and development of money”.
Bitcoin is the only option?
The digital money industry is evolving with the emergence of new digital money.
Singapore-based block-chain company TenX salaries are paid to bank accounts. However, monthly bonus payments are made with the company’s own digital currency, Pay token.
TenX founder and president Julian Hosp says that it is not reasonable to get Bitcoin to pay for the bonus when the company has its own currency.
Hosp also says that these funds will encourage company employees to pay bonuses in this currency, as the company will be well worth the effort.
TenX company’s community manager Mike Ferrer went even further and decided to take part of his salary as a pay token, as well as his bonus.
Ferrer, aged 32, is investing in a superb crypto paralegal and admits it’s a huge risk, but says he’s investing as much money as he can.
“I imagine myself throwing myself into a bunch of money and burning them, and if I’m bothered by it, I know I’m investing too much,” he says.