
Bitwage - markmassie
https://www.bitwage.co
======
nmrm
The rhetoric around explanations of the utility of cryptocurrency has changed
a lot in the past few years.

These days, the major emphasis is on circumventing the fees/processes
associated with banking (as opposed to the libertarian and/or anonymity
rhetoric, which dominated a couple years ago). As a witness, this landing
page.

And I think the rhetoric has converged to the strongest argument -- political
ideology aside, the only true substantial marketplace advantage of BC over
sovereign currency is the ability to side-step the banking industry.

But then, this makes Bitcoin mostly a cottage industry taking advantage of
technology to side-step banking regulations. I see two likely outcomes --
regulations are extended to BC and BC companies start charging as much as
banks to compensate for the inherent riskiness of the business, or banks push
for regulatory reform while making their services significantly cheaper and
faster.

I hope for the latter, because if fiat -> fiat transaction is your only goal,
cryptocurrency is just an inefficient hack. If I just want to transfer some
cash to someone, I'd much rather go directly through my bank (quickly and
without fees) than route through another currency just for the hell of it.
There's no reason to broaden the attack surface and add yet another middle-man
(I mean, entrepreneur).

In reality, I expect a combination of the two former scenarios will cripple
BC, and that a new era of internet cash transfer services will serve this
market instead.

~~~
adammcnamara
Countries like Canada have done exactly this, extending anti-money laundering
and terrorist financing disclosure rules to BTC.
[http://www.coindesk.com/federal-bitcoin-law-
canada/](http://www.coindesk.com/federal-bitcoin-law-canada/)

The real benefit is time of transfer. ACH is infuriatingly slow. If you'd like
a payroll run to arrive in employee accounts on a Friday, it must be initiated
almost a week prior.

BTC could (theoretically) make daily payroll possible. The net benefit to
society could be substantial. Payday loan activity would drop considerably.
Some, but not all, credit card use would drop. All of the instruments that
help "time shift" money could become far less necessary, along with the
substantial fees associated with it.

~~~
nmrm
> ACH is infuriatingly slow.

Tell me about it.

> If you'd like a payroll run to arrive in employee accounts on a Friday, it
> must be initiated almost a week prior.

Right. It'd love to see BC companies do well and then die off, so that we get
reforms in banking without the unnecessary cruft of an intermediate currency
intended for nothing except standing in-between fiat transactions. OR the
inherent risk to consumers which comes with lack of regulation.

> The real benefit is time of transfer.

To what extent does this benefit come from not being subject to regulation?
(edit: not rhetorical; I've no idea)

> If you'd like a payroll run to arrive in employee accounts on a Friday, it
> must be initiated almost a week prior.

But the check still arrives on Friday, so the benefit is really to the
business rather than the employee. This negates the employee-centric benefits
you mention in the next paragraph (pay day loans, credit cards, etc.)

That is, unless the business is giving advances on payroll. But I think that's
something companies don't do for reasons unrelated to choice of currency and
transfer time. ( _edit_ : I suppose another alternative is that you could pay
your employees more often because the process is cheaper and faster. That
would be a big win. But I think other cash flows would in some cases prevent
this from happening unless everything is done in BTC.)

 _edit_ : Die off is a bit harsh? I don't want fiat->btc->fiat because it's
just silly, but of course if btc causes reforms in the banking industry I
sincerely hope btc companies make a huge amount of money in the process :-)

 _edit2_ : Also, thanks for the link!

~~~
FatalLogic
> _It 'd love to see BC companies do well and then die off, so that we get
> reforms in banking without the unnecessary cruft of an intermediate currency
> intended for nothing except standing in-between fiat transactions._

> _If I just want to transfer some cash to someone, I 'd much rather go
> directly through my bank (quickly and without fees) than route through
> another currency just for the hell of it._

You've made that point twice in different comments, and I feel it has to be
addressed. Firstly, the inefficiencies you've alluded to here are
inefficiencies of the traditional banking system. Secondly, and most
important, bitcoin IS money, it does not always have to be converted to
something else.

Bitcoin is not necessarily an 'intermediate' currency. For example, if a
person receives bitcoin and a store they want to use accepts bitcoin, then
there is no need for an additional wasteful conversion step. And what if the
store's suppliers also accept bitcoin or some of their staff are paid partly
in bitcoin? What if these people are in different countries? Goodbye foreign
currency exchange fees, remittance fees, bank charges.

This goal may be unattainable, and the current situation is certainly far from
it, but each time a company like Dell or Newegg announces it accepts bitcoin
payments or a company like Bitwage builds some other part of the ecosystem,
bitcoin becomes a little more useful.

I don't think being paid 100% in bitcoin will be a good idea for most people
any time soon, because they would just have to convert the bulk of it back to
fiat currency. However, receiving a small percentage in bitcoin is quite
practical in some places. A person who receives Bitcoin in the US actually
already has a huge variety of products and services available, without
converting to fiat. For example, have a look at
[https://spendabit.co](https://spendabit.co) and try searching for random
products.

~~~
nmrm
_edit_ : TL;DR: I think the _only_ interesting non-technical discussions about
Bitcoin start with a specific use case. We should latch on to technological
solutions because they _solve problems_ , not because we agree with the
dominant ideology of early adopters. Setting aside politics, if the problems
Bitcoin solves are easier and cheaper to solve with a simpler solution, then
we should use the simpler solution.

> Bitcoin is not necessarily an 'intermediate' currency

I mean, I started my post acknowledging these claims exist.

So, you can interpret my comments as "suppose that the only justification for
bitcoin is its utility as a transfer medium..." and leave political
discussions in other threads.

edit: also, this is totally appropriate for this thread, because in most
states of the US, actually paying employees in bitcoin would not be legal and
employees would need to convert back to usd to pay taxes, rent, food/bar tabs
in most situations, etc. So, USD -> BTC -> USD is pretty clearly the intended
use case for this product...

> if a person receives bitcoin and a store

The problem with foreign currency conversion isn't small amounts of cash for
consumer transactions, at least in my experience. I can convert currency by
using an ATM without thinking about it at a reasonable exchange rate, and the
fees are often _lower_ than what I would pay in the U.S.

Ditto for online services, but even more so.

The problem is larger amounts of cash, or transfers to third parties you won't
visit in person. Queue discussion below.

> A person who receives Bitcoin in the US actually already has a huge variety
> of products and services available, without converting to fiat.

> or a company like Bitwage builds some other part of the ecosystem, bitcoin
> becomes a little more useful.

I suppose this is all great if you want to use bitcoin because of your
political persuasion.

I'm -- and I suspect most people in the world are -- more interested in the
actual underlying pain points than broad-stroke discussions which invariably
ground-out in political, ideological discussions about monetary policy.

Ostensibly, personal opinion on national and international monetary policy
isn't the best of standards for choosing a payroll provider. edit: also,
that's where companies are focusing. For the obvious reason that political
selling points, aren't.

And _more importantly_ , that's not how this product sells itself. Nor should
it.

~~~
FatalLogic
>> or a company like Bitwage builds some other part of the ecosystem, bitcoin
becomes a little more useful.

>I suppose this is all great if you want to use bitcoin because of your
political persuasion.

I expect so. It's also great if you believe that the legacy financial system
is inefficient and may improve if it is threatened by external competition.
From your comments here, you do believe that, I think?

As you've said, casting this as a discussion of politics or monetary policy
distracts from the practical issues. So let's avoid that. Your comment, which
I cited above, seems to be assuming that my interest in this is political or
ideological. It's not.

In fact, based on that comment, you appear to be assuming that anyone who
'supports' Bitcoin does so purely for political reasons. Is that really how
you feel? I think that is far from the truth, anyway.

To be honest, I know very little about Bitwage. I replied to you because I
think you've made some very broad assumptions about cryptocurrencies, which
differ from reality somewhat. As I have used cryptocurrencies extensively,
I've tried to explain how I think reality is more nuanced than these
assumptions.

~~~
nmrm
> From your comments here, you do believe that, I think?

I think bitcoin-as-exchange-medium is reasonable.

I think bitcoin-as-a-currency or bitcoin-as-money _per se_ is not workable, or
at the very least is a solution in search of a problem.

> Is that really how you feel?

If it were, I simply wouldn't read bitcoin stories.

> I think you've made some very broad assumptions about cryptocurrencies,
> which differ from reality somewhat.

What are the material advantages to using bitcoin for anything other than as
an exchange mechanism?

All of the pain points of the modern banking system you and others have
proposed are mostly about currency conversion and sending money across
international borders, and my original post addresses what I believe the
likely outcome for this use case is (although, see the thread with baddox as
well).

I didn't claim you _cannot_ use bitcoin in other capacities. I just stated the
extra intermediate currency doesn't make any sense because there's no
competitive advantage to existing (safer) mechanisms. Maybe I'm missing
something?

> I've tried to explain how I think reality is more nuanced than these
> assumptions.

What would really convince me to let go of this assumption is a compelling
reason to use bitcoin as money.

~~~
FatalLogic
>> Is that really how you feel?

>If it were, I simply wouldn't read bitcoin stories.

Then your statement, 'I suppose this is all great if you want to use bitcoin
because of your political persuasion', doesn't fully represent your actual
point of view about the topic you were referring to (the growth of the bitcoin
ecosystem)?

This one of several issues that I'm finding quite confusing. You've said you
personally would love to see bitcoin have some limited growth because that
might force improvements in the existing financial system[1], but then you've
dismissed all other people's possible pleasure at bitcoin's growth as being
purely politically motivated[2]. These two positions seem to contradict each
other.

>What are the material advantages to using bitcoin for anything other than as
an exchange mechanism?

I could give a trivial example, but do you mean the material advantages for
you, or for some other person? I wouldn't be so presumptuous as to insist that
bitcoin must be good for you personally. It's quite possible that it's worse
than useless for you in its current form.

[1] "I'd love to see BC companies do well and then die off"
[https://news.ycombinator.com/item?id=8079622](https://news.ycombinator.com/item?id=8079622)

[2] "I suppose this is all great if you want to use bitcoin because of your
political persuasion."
[https://news.ycombinator.com/item?id=8081114](https://news.ycombinator.com/item?id=8081114)

~~~
nmrm
> I could give a trivial example

Please do, because this thread is hard-to-read deep and the only examples
you've given were discussed at length in other subthreads before you even
posted them.

> but do you mean the material advantages for you, or for some other person?

I would prefer "here is a problem" and then "here why bitcoin is the _best
available solution_ to the problem".

Rather than the more common "here is a problem" and "here's a way that bitcoin
could solve the problem", and then completely ignoring hundreds of other less-
complicated, safer and some-times even already well-established solutions.

Or solutions that are actually just ways to circumvent regulation, and
probably aren't legally sustainable or financially scalable (see post #1).

> I wouldn't be so presumptuous as to insist that bitcoin must be good for you
> personally.

If you re-read my original post, my reasoning is _explicitly_ selfish. The
reasoning goes "I want X to happen because that's best for me."

> but then you've dismissed all other people's possible pleasure at bitcoin's
> growth as being purely politically motivated[2]

Um, yeah. In the post I'm responding to, you started with the assumption that
bitcoin is good, and then reasoned from that assumption that we should use
bitcoin in specific circumstances while _ignoring arguments that it 's not the
best technology for addressing those specific problems_.

But this reasoning is really silly. Because then every time I point out
there's a better technology for solving problem X, you say "yeah, but Bitcoin
solves lots of problems! So if we use it as the solution for X, then there's
more adoption and we solve all these other problems."

But of course the only "other problems" you've mentioned _all_ have better
alternatives. And if even a significant portion problems have much better
alternatives, then your argument falls apart and becomes "use bitcoin for X
because bitcoin is inherently good", which is a political judgement and not a
pragmatic judgement.

~~~
FatalLogic
Here's my real life example (simplified)

I work for clients in countries A, B and C, who pay me in bitcoins. I
subcontract some parts of this work, such as design, coding, or translation,
to workers in countries X,Y and Z who also accept bitcoins. I spend the
majority of the bitcoins I earn on various products and services, but I keep a
proportion long term. (I also do a lot of work that is paid in USD and other
currencies).

The advantages that bitcoin offers in this situation are:

Much lower transaction fees than any other payment method. About 5 cents per
transaction of any size (Though maybe fees could increase in the future)

No foreign currency exchange fees at all.

All fees are known in advance. This is a big advantage. We never know what
fees banks are going to charge. Even the banks can't tell us before they route
an international transaction via intermediate banks. So people may get
underpaid several percent, and this causes dissatisfaction, and additional
fees to make up the missing amount. With Bitcoin we know the upper bound for
the fees, so we can account for them easily, and the fees are insignificant,
as well.

We know the money will arrive immediately. With banks or paypal, even this is
uncertain. International transactions, especially involving developing
countries, are often frozen for opaque reasons, for unknown lengths of time,
with limited recourse. If their payment doesn't arrive, subcontractors may
stop work and the project stalls. Frozen payments are trapped in the system
and they cannot be returned back to the sender on request. So we don't even
know where the money will go. It depends on the opaque internal review. It
could be returned, or it might continue on its journey to the next bank, or it
may remain locked up for weeks. The uncertainty of delivery makes everyone
reluctant to send large amounts in a single transaction. So they often split
the payments into smaller amounts for safety. This raises the fees and time
required.

Zero chance of chargebacks, clawbacks or advance fee fraud. I find that other
people never understand how major this issue is, if they haven't experienced
it themselves. The lack of confidence is a very significant problem with
credit cards, paypal, checks and etc. Under the traditional payment systems
used by small businesses, you usually need 2 way trust, but with bitcoin, 1
way trust is OK. Trust is expensive. Bitcoin makes it a lot simpler to work
with new clients, or to accept payments from higher risk countries, because it
deletes that uncertainty. In this case I take payment in bitcoins in advance,
and then I know that I have the money, permanently. There's no chance that the
funds will be suddenly get removed from the account weeks later.

Ability to work with people who don't have a healthy banking situation. For
example, we can quickly and easily pay money to a subcontractor in China or
India or the former Soviet Union who has difficulty receiving international
remittances to their bank account due to high fees or bureaucratic issues. In
reality, I don't know if some of those guys have regular bank accounts. (Apart
from saving money overall, fees are currently low enough to provide the useful
option of sending regular small payments during the course of the work, which
some subcontractors prefer).

tl;dr Having bitcoin as one payment option significantly reduces costs and
hassle. I prefer to use bitcoin if the other party will accept it. The benefit
is only a small percentage of revenue (a greater percentage of profit of
course), but implementation costs have been negligible, so why not take it? It
also gives us access to a wider pool of clients and subcontractors.

Disadvantages of bitcoin in this situation:

As we're holding some money in bitcoin, bitcoin's price volatility is the most
serious issue. Over the last two years, the long term price rise has been so
profitable that short term volatility fades into insignificance as a
percentage of profit, but past performance is not any guarantee of future
results.

My own options for spending the bitcoins I earn are fewer than I would like.
There are many things I need to buy that I cannot buy with bitcoins at a
reasonable price. This puts a limit on the quantity of bitcoin-paid work I can
accept, because I want to spend bitcoins instead of getting overexposure to
the price volatility risk. There's been a big increase in the number of places
to spend bitcoins during the last year, though, so now I have more options for
spending, which allows me to accept more bitcoin-paid work than before.

Some of my subcontractors have it worse than me, I'm sure. They have very few
places they can spend bitcoins. They may need to convert them to other
currencies, at an additional cost. Some are keeping a lot of the bitcoins they
earn and hope the price increases, I think. That is risky, of course. If the
price fell too much in future, maybe some would even stop accepting bitcoins.

Clients who require the security of chargebacks will not use bitcoin. There
are a few bitcoin escrow services, but they aren't useful, because they are
too new and too small to be trusted. I need to use other payment methods if I
want to work with these clients. (It has turned out that the knowledge that a
client wants the ability to chargeback is a useful factor when making a
decision about working with them. It can be a sign that the client has not
clearly planned out reasonable requirements and goals for the project. I think
these clients tend to communicate badly and they are far more likely to
require work to be amended or redone).

There has been a lot of growth, but only a very small proportion of clients
and subcontractors understand or use bitcoin. The potential market size in
which bitcoin can be used is 50 or 100 times bigger than in 2012, but still it
is a very tiny niche.

------
lukasm
I'd refuse the job offer if the company would pay me in bitcoin. Volatility is
not acceptable.

Having said that, there is a market for companies that hire remote workers and
they could use it for automating the process of exchanging, accounting fiat1
-> BTC -> fiat2

~~~
SG-
There's nothing stopping you from converting the BTC to fiat the moment you
get paid, or for a service to automatically do this like BTC merchant services
(no idea if this service does it).

For merchants Bitpay guarantees that you'll get the exact fiat value
transferred to your bank account that the item was originally priced at.

~~~
octo_t
I wouldn't want my salary to be _measured_ in BTC. If you got hired in
December, when the price was $900/BTC, at say 1000 BTC pa salary (so $90k pa),
these days you would be on a $60k salary.

~~~
SG-
Nobody uses BTC like this for anything (pay or purchase). At the time of
payment you would convert your fiat value into BTC and make your payment, the
other side is free to keep the BTC to convert it instantly into their local
fiat.

~~~
yen223
I see this argument a lot. The issue I have with this is that you are merely
trading the headaches of international wire transfer with the headache of
converting BTC<->fiat. Basically, instead of dealing with a bank, you're
dealing with Coinbase.

No, this service would useful if I can get paid in Bitcoin, and pay for a
majority of my expenses in Bitcoin, without having to convert to fiat at any
point. Unfortunately, the Bitcoin ecosystem is nowhere near this sophisticated
yet.

~~~
SG-
I suppose that would be true if exchanging BTC to local fiat was a "headache"
for me. In my country and with my experience it hasn't been a headache at all
between the local exchanges I can walk up in person or online.

~~~
yen223
Dealing with banks is less of a headache for me than dealing with a Bitcoin
exchange.

~~~
hayksaakian
Have you ever tried to pay someone in another country?

------
billions
When wages are paid through Bitcoin, the fundamental Bitcoin incentive loop
will be complete. The primary advantages of Bitcoin, including transaction
fees and privacy, are lost when converting local currency to/from Bitcoin via
markets. When conversion is no longer necessary transaction volumes will climb
exponentially.

------
droopyEyelids
This is awesome because it's another step in the path of creating an
autonomous corporation. I can't believe we're actually watching this happen.

------
martingordon
IANAL and I haven't kept up with what the Fed have said about Bitcoin, but
couldn't every Bitcoin service out there fall under banking regulations as a
result of ABC v. Aereo? Basically, if it looks like bank/money transfer
service/etc, then it is one, regardless of the underlying technology.

------
IgorPartola
What would be great is if your company could do its banking in BTC, while you
get paid in your fiat currency. Basically, a service that makes worrying about
the conversation rates and the conversion process easy.

For example, currently you can use your US-based credit card to buy something
from the UK. The price will be converted, and you will be charged a small fee,
but your credit card company will take care of everything. Doing the same here
would be pretty cool.

------
amatera
I don't get the point. I get BTC for my Job. Beside the heavy variations about
how much 1 BTC is in my currency, how do i buy things with that? Sure, some
etailers like Dell accept it. But if i ask now my local supermarkt how much
BTC is needed to pay, i would see in a lot of overwhelmed faces. Same counts
for my rent and so on. So what exactly is the benifit of this service? (Maybe
i don't get the whole "bitcoin"-Thing anyway)

------
telot
Anyone know of the tax benefits/pitfalls of paying (and being paid) in
bitcoin?

~~~
Gotperl
It isn't legal in most US states. Almost all states have laws that dictate
employees working within that state have to be paid in US currency

~~~
greenyoda
And payroll taxes certainly need to be paid in US currency. The IRS and state
tax departments don't accept Bitcoin.

~~~
bduerst
They do, but it's classified as a "barter".

If you have the option to get USD instead of BTC, then you're much, much
better off getting paid the former.

------
kernelcurry
So, it BitCoin still a viable Currency? I thought it was going down hill...

------
sadris
BTC is property, not currency. US has a minimum wage law. Won't work.

------
mhluongo
They claim to be the first, but what about BitPay?
[https://bitpay.com/bitcoin-payroll-api](https://bitpay.com/bitcoin-payroll-
api)

------
Oculus
It'd be more interesting to see how the built-in smart contracts in Bitcoin
can be used to secure payments/work in the freelancer/client model.

------
kaonashi
[https://www.bitwage.co/about#t6](https://www.bitwage.co/about#t6)

------
rob_mccann
I tried signing up but it seems like it only accepts US phone numbers :(

------
practicalpants
"Investor Links"...

This feels like a 'me too' thing. I don't personally see the value in it
either.

------
piratebroadcast
Website looks like shit.

~~~
untilHellbanned
For a just launched product and having made several websites myself, I have to
disagree. I think it is quite professional for a first version.

What do you think looks better? Have you seen major bank websites, e.g., Bank
of America's? They are really terrible on many levels (usability,
performance).

