As a little thought experiment, imagine someone who you buy services from told you that they wanted to be paid in Burmese kyats. That's the currency of Burma, a country with a population of 50 million people … e.g. it's bigger than Bitcoin. Would you bother buying their service? Probably not. It'd be far too much hassle. Bitcoin is exactly the same - if you're interested in it then you've researched it, learnt about it, and perhaps bought it using a secure service and stored it in an offline wallet. If you aren't interested in it, you might have heard of it, but nothing more than that, so the steps you'd need to take to buy from you would be ridiculous.
Interesting point! I like to think that all of my clients are forward thinking and techy, but it doesn't make business sense for them to deal with the additional hassle of buying or exchanging their currency and then transferring it to me. So I guess the next question is this, how would it be possible to facilitate BTC payments? I suppose one would have to act as an intermediary, as in some kind if bank-like service that treats all currency as "foreign" and converts to BTC, just like if I were to accept Kyats as payment they would automatically be converted into USD by my bank...is that correct?
Why do you need an intermediary to do this for you automatically? Just take the USD your clients pay you, and head over to your favorite broker/exchange and buy Bitcoin with it.
Currently, having watched the whole Mt. Gox fiasco unfold, and having read from at least one HN poster who lost over US$100,000 worth of bitcoins, I wouldn't touch bitcoins with a 100-foot pole. I understand it's safe if [list of conditions which I 80% understand], but that's little consolation to me.
But certainly there is no harm in giving clients the option.
Yeah that gets to the "is it a good idea" portion. Honestly, the fact that there is any faith in Bitcoin is amazing to me. And I believe that it's a resilient currency that will bounce back from the current controversy. But I do fear that it may collapse entirely, especially if governments start getting involved and trying to regulate it when they can scarcely understand traditional money, or even other much more simple concepts.
Serious companies will not pay you in Bitcoin. Serious companies disproportionately can actually attempt to pay market rates for engineering services. Signaling desire to be paid in Bitcoin tells serious companies "I do not wish to do business with serious companies." and, while it won't convince them to pay you in Bitcoin since no power under earth or heaven will do that, it might convince their decisionmakers to go with someone who is not a joker for their professional services. This will cause you to systematically get paid far below-market rates for your services.
Why won't serious companies pay you in Bitcoin? Let us count the reasons:
1) Why should they? They already have a bank account, which can issue checks and wires. This is what they use to pay substantially everyone.
2) They have layers of processes and scar tissue built up around payments, precisely to make sure that something like "And then the bookkeeper looted 80% of our assets without us knowing it" could never happen. None of these processes contemplate Bitcoin. They're the bones and sinews of the company. You will not succeed in changing them from the outside. As tptacek how likely you are to even alter fairly inconsequential details of a large company's procurement process, like how long it takes them to physically issue a physical check which all parties know only actually takes a minute of typing and Ctrl-P to create.
3) Serious companies have serious professional advisors like lawyers and accountants, and serious professional advisors are very risk adverse. They're going to come up with all sorts of perfectly serious reasons why issuing payments in Bitcoin is a high-risk low-reward activity. For instance, in Japan, you need to keep your books in yen. That's non-negotiable. Even if the numbers you use for management of the company in something really exotic like dollars, the official books must be in yen, and the National Tax Agency will occasionally ask you for line-by-line justifications. Your accountant is going to hear "Bitcoin transaction" and start trying to fit that into double-entered yen based bookkeeping, and if he actually understands what Bitcoin is doing, he's going to say "This sounds like a whole heck of a lot of work. Why don't we just pay them via wire transfer like we always do? Also, I'm having difficulty valuing 100 BTC for the purpose of paying withholding taxes on our payment to him. I sort of don't want to lose my license for assisting with tax evasion -- can we please pay with a wire transfer?"
If you desire to speculate in Bitcoin, you can acquire it in the same fashion as you buy Magic Cards, Beanie Babies, or shares in Google: get paid in dollars, then buy the thing from people who sell it for dollars. (I would feel negligent if I did not say "But you should not speculate in Bitcoin.")
I pay some of my staff in bitcoin... it is cheaper and easier than using Paypal to be honest, and significantly, significantly cheaper than dealing with international wire transfers. And when they need cash they can sell at a markup using localbitcoins. Yes, I also have a small business without "layers of processes and scar tissue built up around payments," but is this really the community to trash startups?
The easiest answer to the parent poster's question is to offer a slight discount for bitcoin payments. Or just accept cash and use that to purchase bitcoins as needed. Doing a bit of SEO work around bitcoins can also make your business more visible to people who want to pay using it. I currently pay for some server infrastructure in BTC as well, and found those companies through web searches.
You really pay full time staff in bitcoin? What happens when the value of bitcoin varies by more than 2x in a short period vs local currency? How do they afford rent?
If you're just using it as a transaction medium (give them $6000 per month, transfer as BTC, immediately change back to dollars) that would avoid the issue I suppose. But how is that better than direct deposit in any way?
Not full-time staff, and it isn't their main source of income. The alternative is international wire transfer, which would cost me 30 USD and them a portion of the payment as well.
Ah that's a good point. If I wanted to make it as simple as possible for them, what would I need to do? Or can I simply add it as an option in the invoice?
You could simply let them know that you will accept it. They'll tell you if they're interested. Just suggest, don't attempt to convince. It may not be welcome.
Payment methods would be either through a third party processor, or as a direct payment to an address.
Making people change their way of doing things is hard. You will find it more rewarding to promote your business to people who already use bitcoins. You have an opportunity there to find new clients.
However you do it, offering a discount at the start will help.
I know very little about specifically convincing people to give me money, but I do know that when I want someone to do something, I need to make it easy. The ideal is to make it so easy that it's harder NOT to do it.
By trying to get paid in bitcoin, you'll be making it difficult for people to give you money. All else being equal, this is a very bad idea.
