Well, don’t feel embarrassed if you have heard of Bitcoin but are unsure about the way it functions! A lot of people are facing the confusing and are unable to understand its ways.
Though created in the year 2009, it is fresh and new to many and occupies just a very small portion of the worldwide economy. Whereas it’s popularity is also increasing continuously.
Cryptocurrencies like Bitcoin are simply a digital currency. There aren’t any actual physical coins that you can see or touch. It is a medium of exchange, more like gold than money, which consists of small chunks of computer code that can be “mined” by those spending the time and effort to hash blocks of Bitcoin transaction data into smaller hash values.
You can purchase bitcoins electronically and then use them to make payments and purchase products or services from companies accepting the currency, and the number of these companies continues to increase steadily.
Its appeal is that it is completely decentralized. There is no middleman between parties exchanging the currency, unlike regular forms of payment that are backed and controlled by a central government authority or a bank. Because there is no intermediary, payments can be made without the typical administrative hassles that, among other things, increase costs and delay traditional transactions by several minutes or hours.
Benefits of paying in Bitcoins!
The biggest advantage of Bitcoin is its ease of use. When you make a payment, it’s received instantly. There is minimal waiting periods for payments to clear, and administrative or processing fees are lower.
Moreover, there are no exchange rates to navigate or other hurdles to clear when it comes to making payments across international borders. Thus, Bitcoin becomes especially advantageous if you are providing payment to overseas contractors or workers since you don’t have to worry about which currency to use or the daily exchange rate.
Workers could be also attracted by the potential upswing in value that some predict will continue; holding onto that one Bitcoin and selling it at the right moment could be an exciting prospect for a worker to consider.
Disadvantages of paying in Bitcoins!
There are some downsides to the system of Bitcoins if you are interested in making Bitcoins your payment system for the employees. The first one that most of the countries simply do not accept the system of Bitcoins and have completely banned bitcoins. So, the state may not allow employers to use Bitcoin to pay employees’ salaries. However, there are solutions to overcoming these obstacles. You could offer Bitcoin as an optional benefit your employees could receive on top of their standard U.S. dollar-based compensation. It’s crucial; however, that you provide your employees’ base compensation in the standard currency that meets state and federal limits for minimum wage and overtime. For nonexempt employees, you would also need to use the correct Bitcoin value to determine the employee’s average regular rate for purposes of calculating overtime.
Even if permitted, you probably want to avoid singular payment in Bitcoin because the wild fluctuations in value create minimum wage dangers. A better option is to agree to pay employees in a traditional currency that is automatically converted to Bitcoin or pay Bitcoin only as a discretionary bonus.
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