When asked what Bitcoin is, many insiders might give you a highly technical description that includes a secure, publicly viewable ledger called the Blockchain, Bitcoin addresses that are basically like IP addresses for the payment system, mining pools, and maybe a healthy dose of Libertarianism to boot.
However, most of us don’t think like that. For people like me who do most of our business from a home office with a decent Internet connection, I like to describe Bitcoin as a payment system with its own built-in currency that can keep transaction fees low, make international and digital transactions easy and relatively secure when compared to credit cards, and protects the rights of the vendor by making fraudulent chargebacks practically impossible. If you can copy-and-paste a random string of letters and numbers or scan a QR code, and then tap a few buttons, you can use Bitcoin. That makes Bitcoin worth consideration from freelancers as a serious alternative to Paypal.
Yeah, but what is Bitcoin, exactly?
This is a basic introductory video that explains what Bitcoin is without all the details of what goes on under the hood.
If you run across a freelancing site called HireCrypto, I own that one and I’m currently in the process of getting some upgrades put together. My vision of HireCrypto is to make it into the site where freelancers could pick up jobs and be paid in cryptocurrencies. I’ve even discussed options with BitWage, which has some cool features for paying employees and contractors in Bitcoin. If I had made a tweet out of it before our conversation, it would probably look something like,
Going to talk @HireCrypto business with @Bitwage. Interviewed @JonChest for @TheCoinFront not that long ago. #awkward
Although BitWage is pretty focused on payroll services, it’s one of several enterprises aimed at using Bitcoin to make payments easy and not very expensive to handle on the payee end. During the conversation, I dropped the idea that Bitwage could create a WordPress plugin and they seemed to like it pretty well. As much as I like the romantic idea of being paid in your choice of about a hundred cryptocurrencies, making payments as painless as possible is really the important thing here.
The Business Dictionary defines “liquid asset” as:
“An asset that can be converted into cash in a short time, with little or no loss in value. Liquid assets include items such as accounts receivable, demand and time deposits, gilt edged securities. In some countries, precious metals (usually gold and silver) are also considered liquid assets. Also called quick asset.”
Considering that Bitcoin can easily be converted into cash if you can find an exchange that is actually legal in your country, I’d say it counts as a liquid asset. Even when you don’t have one handy, it should theoretically be simple for Person A to pay you in Bitcoin for a service and then you can use it to buy a gift card at Business B that you can redeem at Website C. That’s how currencies work in the real world where people are participating in billions of transactions every day.
In the real world, Bitcoin is still kind of a work in progress in this department. As a freelancer, I’d like to pay bills with Bitcoin and I bet you would too. This means finding a solution for the liquidity problem. As Offshoring Project Specialist Randall Corbin Perry told me, “How do I convert my Bitcoin into a Starbucks coffee?” It’s a fair question. Not all newcomers to the world of cryptocurrencies are going to know about Gyft and it’s worse if you’re looking for places to spend minor altcoins that nobody’s really heard of.
Even when you’re fairly familiar with places where you can spend Bitcoin, it’s one thing to buy a Starbucks gift card with Bitcoin and quite another to pay the rent unless you’re lucky enough to have a landlord who likes cryptocurrencies. Some services like Australia’s Living Room of Satoshi, Canada’s Bylls, and Argentina’s enBitcoins offer bill pay services that you can use with Bitcoin. All of these were founded by entrepreneurs who didn’t miss the obvious fact that most truly hardcore Bitcoin enthusiasts have an electric bill. This kind of thing is a stopgap measure until the option of paying routine bills in Bitcoin becomes the norm and not the exception.
Then why use it at all if paying for everyday expenses is so inconvenient? Well, think of the last time some jerk client issued a fraudulent chargeback with Paypal. How far are you willing to go to make sure that doesn’t happen? If you want to handle the matter in a way that doesn’t involve an attorney, use Bitcoin because its pure form has built-in features that preempts the fraudulent chargeback before it ever happens. Once you’re paid, you’re the one who decides if you’re going to issue a refund. You can always sell the Bitcoin on Coinbase and still get a pretty sweet deal knowing that your rights as a seller of services are automatically protected. As a side note, I recommend doing that as soon as possible after receiving it if you worry at all about the price of Bitcoin bouncing around before you actually get a chance to do something with it.
Anyway, it’s getting noticed even though most businesses aren’t actually accepting Bitcoin yet. The French bank BNP Paribas recently admitted that the technology that Bitcoin represents could force a total rethink of how financial and investment firms handle transactions. If major financial centers are taking Bitcoin seriously, that means the rest of us should take a long hard look at it too.
Developers are really having fun with the technology anyway. You can already get customized Blockchain-based “smart” contracts that would basically block your client’s access to your work if he doesn’t keep up his end of the deal. What the Blockchain means for you as a freelancer is that, once things like smart contracts become more mainstream, anyone you participate in a transaction with will have a very difficult time cheating you out of what you’re owed – or, at least, he won’t ever see the results of your work if he does. If it comes down to a court case, you can point to the appropriate contract and say that Client X didn’t get the work because he didn’t pay you Y amount of Bitcoin. That actually makes Bitcoin and Bitcoin-related technologies useful tools for freelancers who want a better way to avoid the next nightmare client.
Everything You Need To Know About Bitcoin
Bitcoin on eBay
Only a few people sell cryptocurrencies on eBay anymore due to issues with Paypal. However, you can still get things like Antminers when you’re ready to get more heavily involved in cryptocurrencies.