When you’re used to getting paid in USD or some other fiat currency, making the switch to bitcoin can seem daunting at first. However, working for bitcoin can also be rewarding. Offering to take bitcoin payments as a freelancer can open up new project opportunities such as participation in bounty campaigns and other facets of tokensales.
An added benefit of getting paid in bitcoin is that sometimes a change in the market means you’ve earned substantially more than you’ve bargained for.
Plus, by dealing in cryptocurrency as a primary source of income, you are supporting the community you are working in and the projects we are all undertaking.
As with any form of payment as a freelancer, it is important to do your homework, know how to be safe, and understand the best practices for whichever currency you use.
Here are 9 tips for getting paid in bitcoin that are relevant to new and seasoned freelancers alike:
Choose your exchange wisely
There are plenty of exchanges online, some more reputable than others. One of the first things to consider is which coins you intend to deal in. Will you be using only bitcoin? Will you want to exchange anything into ethereum? What about other altcoins?
Whether you want to simply be paid and cash out to your bank account or PayPal or if you’d prefer to trade your cryptocurrency is an important aspect of choosing an exchange. While you could always move your coins elsewhere, to avoid delays and fees, it’s best to start on an exchange you think will meet your needs.
Other aspects to consider are the security, reputability, transparency, and track record of the exchange. Knowing the policy surrounding fees, how long it usually takes to cash out, legal compliance of the exchange (such as KYC, or Know Your Customer laws), and, especially dependent on the country you live in, which fiat currencies the exchange accepts are also important in choosing your exchange.
Choose your wallet wisely too
As many options for exchanges as exist, there are even more options for wallets. Choosing a wallet is based on your needs in terms of convenience as well as security. Many people use multiple wallets and leave some cryptocurrency on exchanges, especially when trading.
Many people keep both a hot wallet for quick transactions and some form of cold storage for crypto that does not need to be immediately accessed. Some security-minded folks stick almost entirely to hardware wallets. Either way, choosing a reputable, secure wallet is always important.
Other options include desktop wallets, web wallets, paper wallets, and mobile wallets.
Don’t store large amounts of BTC in hot wallets
If you’re going to be paid a large amount in bitcoin or another cryptocurrency, it is worthwhile to have a hardware wallet so you can keep your coins safe and completely under your control.
If you’re going to use cold storage, it is absolutely vital to keep track of your private key, because no one can access your coins if you lose it.
Account for transaction times
When you’re a freelancer with bills to pay, there’s nothing worse than seeing your BTC sit on an exchange while your rent due date comes and passes. This can be largely avoided by using a reputable exchange with a lot of liquidity and knowing how long that exchange takes to cash out to various platforms, whether PayPal, your bank account, or otherwise.
One of the easiest, fastest methods in my experience is to cash out to PayPal, then use Paypal’s low-fee transfer to your bank account.
No matter which method you use to cash out your crypto, make sure you know how long it will take.
Double-check your wallet address
When a client wants to pay in BTC, you, of course, have to send them a wallet address. Since an incorrect wallet address will result in your payment being sent to someone else, it’s important to double if not triple check it, just as you would your bank account information when receiving a direct deposit.
Luckily, many of the more popular exchanges offer an option to simply click your wallet address to copy it, that way you can easily and accurately send the address to the client.
Moneo makes it simple to get paid in bitcoin too. Simply add your wallet address to receive payment as you complete project milestones.
Have a plan for taxes
Income tax laws vary from place to place, as do taxes on money which you’ve gained additional funds on via investment.
While many places don’t have fully fleshed out laws surrounding taxes and cryptocurrency, if you are exchanging crypto, or especially if your primary source of income is via crypto, then it is wise to have a plan.
How will you determine what you have made with changing rates? How will you account for fees? What about money you’ve gained or lost before cashing out?
The best move here is to consult a tax professional who is versed in cryptocurrency and the laws of your area.
Know the market
As mentioned previously, bitcoin, just as all cryptocurrency, can fluctuate in value. Sometimes, this can be great, since you end up earning even more than what you negotiated for a job.
However, if the market dips when you need to cash out, you can also come out with less than you bargained for.
Keeping track of cryptocurrency news and predictions can help you choose when to cash out or leave your money on the exchange for a couple more days. Legal changes, network splits, and many other factors can impact the price of bitcoin.
If the market is down, it is also important not to panic. Oftentimes, it will bounce back and you can cash out for equal or greater amounts than what you expected.
Know the benefits of negotiating in fiat
As previously mentioned, negotiating in fiat can save a lot of hassle with market fluctuations. If you agree to work on a project for $2000USD/week, then a client can pay you the equivalent amount of bitcoin on payday.
If you negotiate in bitcoin and payday comes on a day when bitcoin prices are high, there is always the chance that you will make less by the time you can cash out. That said, the opposite can be true as well. If you’re a risk-taker, negotiating in crypto is no problem. However, if you are trying to minimize risk for a stable, primary income, negotiating in fiat can be a great way to account for price changes.
DREAM allows you to submit proposals and set your rates in fiat which are automatically updated to the bitcoin equivalent.
Use escrow when possible
One great benefit of using a freelance platform like DREAM is built-in escrow protection. Clients can fund milestones for a project and payment is released when a freelancer completes a job, so you know you are protected.
To avoid the dents in your plans that can come with a client who has opted not to pay for services rendered, an inevitability in most freelance careers, escrow protection can be a lifesaver.
DREAM has secure escrow services for all bitcoin payments through the platform, keeping everyone honest and safe.
The DREAM platform isn’t just another untested beta program on a white paper… It’s live and being used right now to hire blockchain professionals. The token sale will enable DREAM’s innovative team take DREAM to the next level by integrating A.I. and incorporating our platform token.
DREAM is positioned to change the way the world freelances and build teams, and we’re excited to watch the DREAM platform shape the market in the coming years. One thing is for sure: A.I. + Crypto + Blockchain + Freelancing = DREAM!
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