Bit better have my money
Is compensation through Bitcoin worth it?
LEAH SCHEITEL // COPY EDITOR
Bitcoin, the cryptocurrency that made its world debut in 2009, has been a hot-topic lately. It’s late 2017 surge to about $17,000 CAD for one Bitcoin has reinvigorated the interest in the cryptocurrency, and some companies are even looking into paying their employees partially in Bitcoins. In late December, a Japanese internet firm named GMO Group became the latest company to see if a partial Bitcoin salary would make sense for 4,000 of its employees.
This proposition sparks an interesting debate of the value of the internet-based currency, specifically how much it will be worth from day-to-day. Bitcoin isn’t known for its stability – it sank to record lows in December, then rebounded by more than 50 per cent the week after. Moreover, at the height of the recent Bitcoin rage, reports (and memes) about its terrifying volatility easily dominated the web. So, while the company may have the intention of paying the equivalent of $1,000 in Bitcoins, it may be worth less than an old pair of underwear by the next week – yet it could also be worth the value of a Victoria’s Secret diamond brazier. There is no way to guarantee the employee will receive the equal value of their work in this currency.
This opens the door to other ethical issues such as gambling. Paying in Bitcoin allows for employees to essentially gamble with a portion of their pay cheque. While it is an activity some may do with their income anyway, it shouldn’t necessarily be facilitated by their employers. As quoted in BBC News, “If an employee is receiving their salary in Bitcoin, they might as well be receiving lottery tickets,” said Massimo Massa, professor of finance at Institut européen d’administration des affaires (INSEAD). “They are just participating in a game.”
The other massive dead canary in this proposal is one that affects the greater good – taxation. If companies opt to pay employees in Bitcoin, will the company be responsible to tax employees in a tangible currency before translating it into an intangible one? And would Bitcoin salaries facilitate petty tax evasion, either on the end of the employer or employee? Cryptocurrency is still in its adolescence and it is inevitable that if it succeeds to be accepted as legitimate currency, tax laws will be updated to accommodate internet-based currency. However, no society has quite found its way there yet.
Undoubtedly, some people will be willing to bet on a Bitcoin salary, even if the benefits are unsure, just as some people are willing to gamble religiously on fantasy football games while others would like to be paid in compliments. Until there are more well-defined benefits to this option, it looks as though it is more of a publicity stunt instead of a well-thought out plan for compensation, resulting in more itty-bitty salaries than what employees wagered for.