Real Life Applications Of Bitcoin – Bitcoin For Freelancer Payments
The biggest advantage Bitcoin has over fiat currencies is its decentralized system. This implies no single institution or authority has control over Bitcoin. And that means no single person or an organization can determine the monetary policy of this currency. Bitcoin payments cannot be blocked by any existing authority today. Users can send or receive Bitcoin payments from anyone and anywhere in the world. This currency doesn’t have geographical boundaries. All these amazing features make this currency the most suitable one for freelancers to receive their payments.
Employers can use Bitcoin to make payments for freelancers working for them. These freelancers can be located in any part of the world. This digital currency is the most suitable payment method for freelancers as well as business owners for a various number of reasons. Be it speed, convenience, and transaction fee; Bitcoin payments are more viable than making the payments in fiat currencies.
The transaction fee you have to pay while making payments in Bitcoin is way too less than the transaction fee that is charged to you while making fiat currency payments. This is because of the amazing blockchain network. There is no verification required for each of the transaction like they do in banks. The transaction fee banks charge typically ranges from 5% to 10% whereas it is 0.1% to 1% while you pay in Bitcoins.
The transactions you make in Bitcoin are fast. Like really fast. This is also because of the elimination of a single institution verifying each of the transactions. So as a freelancer, you will be happy to receive money quickly, usually within a few minutes. Even though it might sound surprising, Bitcoin payments are much faster than credit card transactions.
For the employers, it is essential to pick the freelancers who accept a common payment method with the same fiat currency. But with Bitcoin, that problem is eliminated. Employers can send money to the freelancers residing in any country across the globe. By doing this, international transaction fees are drastically reduced. Also, because of this payment method, working with freelancers abroad, and international collaborations have become a lot easier. This is important because the freelancers in developing countries can be very cost effective, which can help employers in saving a lot more money.
29% Of Freelancers Prefer Bitcoin Payments
More than 29% of Freelancers prefer being paid in Crypto according to a survey conducted by Humans.net, a job recruitment platform. This survey covered almost 1,100 U.S. based freelancers. The results of this survey state that 18% of the respondents would prefer receiving all of their payments in Crypto, while 11% would prefer to receive a fraction of their payments using digital assets. The respondents were randomly selected from the freelance market of the U.S., and none of the respondents disclosed any specific interest in cryptocurrencies prior to the survey. Among the sample size were self-employed professionals like tutors, designers, and developers.
Image Credits – humans.net
These respondents were drawn from across the economy and were not interested in cryptocurrency, and the 18 per cent statistic can be taken as strong evidence of growing interest in Bitcoin. And 11 per cent of those surveyed stated that they would prefer receiving partial payments in cryptocurrency, making a total of 29% of freelancers who would be more than happy to receive their payments in Crypto.
Freelancers often receive payments beyond geographies from their employers as most of them work for overseas companies or clients. Currently, there hardly exists a limited number of alternatives with which freelancers can receive their compensation using remittance platforms like Western Union or online Fintech platforms such as PayPal, and bank wire transfers.
Payment in fiat currencies using bank transfers remains as the most efficient and effective way to pay for freelancers because it clears bank wire transfers with lesser transaction fees. But the multi-billion dollar platform can be highly impractical in countries with stringent capital controls. South Korea, for instance, does not allow wire transfers to clear more than $1,000 a day and $20,000 a year.
On the other hand, PayPal and Western Union charge high conversion fees, which could range from five to ten per cent. So if a freelancer has to receive $5,000 as monthly compensation from an employer overseas, about $250 would be gone in the form of the transaction fee. In the United States, PayPal charges 2.9 per cent plus a flat $0.3 fee, but for international users, the fee increases depending on the location. Major cryptocurrencies like Bitcoin and Ethereum enables freelancers to receive payments almost instantaneously with low to zero fees, especially with a huge chunk of payments.
It is easy to process small payments compared to the ones that involve a lot of money. Once the payment size exceeds $10,000, a lot of documents are involved and a long verification period is required when it comes to conventional wire transfers.
Binance which is the world’s largest cryptocurrency exchange sent close to $600 million with as low as $7 fee. It is almost impossible to send $600 million on PayPal. Even if it is possible, a five per cent nominal fee will result in a whopping $30 million fee whereas, on the Bitcoin Blockchain network, it takes only $7.