I'm Jonathan Chester, Founder & President of Bitwage. Ask Me Anything!

[JonathanChester]

Hi all,

I founded Bitwage, the largest bitcoin payroll provider with the most users and volume. Together with my co-founder, John Lindsay, we set out to help close the loop in the bitcoin ecosystem, by allowing anyone to receive their wages in bitcoin without needing their employer to sign up. Over time, we realized that employees, contractors and freelancers all over the world needed faster and more efficient ways of getting paid. We have done just that, paying people in countries all over the world, domestically in the United States and internationally in Europe, Philippines, Brazil, Mexico and Argentina.

We just announced the closing of our $760,000 seed round with high profile investors such as France's largest telecommunications company, Orange, and Tim Draper's Draper associates.

We are proud and excited to be a part of this community and cannot wait to bring the value of real-time digital wage payments global.

Happy to be here today answering any questions about myself or Bitwage.

[CryptoCoinUser]

How does Bitwage's exchange rate compare to the big exchanges, say, Coinbase?
Is it the same rate for individuals who want to split their paycheck and employers who use you for payroll?

[TheEnforcer]

Hi Jonathan,

Congrats on closing the seed round. I don't own any bitcoins yet, but it seems to be an exciting opportunity. I'm kind of a traditionalist though with my finances and hesitant to take chances of course with new ideas/concepts when it comes to my personal finances..can you tell me, what bitcoins are (there seems to be a lot of stuff to sift thru out there) and what Bitwage can offer me in terms of advantages that I am not getting with the way I am currently receiving my salary from my employer? Oh...by the way...I often travel for months at a time for work b/c I am a contractor for Uncle Sam. Thanks in advance for your answer...fascinating stuff here for sure!

[JonathanChester]

How is your exchange rate compared to the big exchanges, say, Coinbase?
Is it the same rate for individuals who want to split their paycheck and employers who use you for payroll?

Our exchange rate is always live at the top of our website. You can compare the rate with services and exchanges like Coinbase, Circle or Bitstamp at any time. We have no fees for our bitcoin payroll service, although we plan to incorporate fees into our international payroll service in the future. Everyone on our system receivers the same exchange rate, there are not differences between individuals and employers. You can learn more about how we calculate our exchange rates here: https://community.bitwage.com/t/how-is- ... ermined/15

[arnoudk]

Do you also provide the opposite service? Ie, if a business wanted to pay salaries in bitcoin and employees wanted to receive local fiat currency?

That, in my opinion, also closes a loop. It allows businesses to keep bitcoins (hedge against price fluctuations if desired just as with any other foreign currency) and know that they can use them to pay for one of their most expensive monthly costs: wages.

You could then say to any business that they can accept bitcoins directly, and keep them in bitcoin - because they can always spend that on wages. It solves the "why would I want to keep them, what can I buy with them" question.

Of course, if employees then also start accepting part of their paycheck in bitcoin things really start moving along nicely.

[JonathanChester]

Hi Jonathan,

Congrats on closing the seed round. I don't own any bitcoins yet, but it seems to be an exciting opportunity. I'm kind of a traditionalist though with my finances and hesitant to take chances of course with new ideas/concepts when it comes to my personal finances..can you tell me, what bitcoins are (there seems to be a lot of stuff to sift thru out there) and what Bitwage can offer me in terms of advantages that I am not getting with the way I am currently receiving my salary from my employer? Oh...by the way...I often travel for months at a time for work b/c I am a contractor for Uncle Sam. Thanks in advance for your answer...fascinating stuff here for sure!

To make a very long answer short, bitcoin can either be looked as a currency or a payment protocol. As a currency, think of it as digital cash. As a payment protocol, bitcoin removes the need for many of the intermediaries within the correspondent banking system, creating speed, cost and transparency efficiencies. To dig deeper into learning what Bitcoin is, the main website of bitcoin.com is a great resource for the basics. I suggest checking out the "Learn More+" section. Once you have done some digging, I suggest taking a read at the original white paper by Satoshi Nakamoto: https://bitcoin.org/bitcoin.pdf.

Bitwage does two things. The first is that we allow anyone to receive a bitcoin wage regardless of whether or not their employers signs-up as a client of Bitwage; we called this product Bitcoin Payroll for the Individual. The second is that Bitwage makes international wage payments to employees, contractors and freelancers faster, cheaper and more transparent than the existing traditional legacy banking system (a system which unfortunately has not improved on its’ antiquated system of sending payroll internationally that routinely loses track of wires due to the inefficiencies of the multi-tiered correspondent banking system).

People sign-up for our Bitcoin Payroll for the Individual service because our system is the easiest way to dollar-cost average their purchasing of bitcoin. Bitcoin's current market cap is about 5-billion, whereas a company like PayPal is 44-billion. Many in the Bitcoin Industry, myself included, believe that the price for one bitcoin versus national currencies is going to be worth a lot more than it is now. From this benchmark statistic, it stands to reason that there is a lot of room for bitcoin to grow, and that dollar-cost averaging sets-up private investors perfectly to ride this wave of growth.

Our second product is a full end-to-end bitcoin-powered wage solution that enables both the employer and their workers to send and receive their pay in local currencies. In early February, we released our first international payroll solution, the fastest and cheapest way of paying employees, freelancers and contractors, without the use of floating funds, from the U.S. to the Philippines and our now sending payments to countries all over the world, such as Mexico, Brazil, Argentina and around Europe. Part of this solution is a cloud savings solution that allows anyone to receive their wages regardless of where they live, in one of 24 different currencies and 4 precious metals. Connected to this, is a debit card, which can be shipped to over 170 different countries. So as a contractor you can easily receive your funds anywhere in the world from US clients, who won't have to sign up and will save money sending to us, and then access those funds almost anywhere.

Since our launch our service has gained acceptance and a loyal following; we have helped contractors, freelancers and employees receive their wages from companies like Google, Microsoft, GE, and the institutions such as World Health Organization.

[JonathanChester]

Do you also provide the opposite service? Ie, if a business wanted to pay salaries in bitcoin and employees wanted to receive local fiat currency?

That, in my opinion, also closes a loop. It allows businesses to keep bitcoins (hedge against price fluctuations if desired just as with any other foreign currency) and know that they can use them to pay for one of their most expensive monthly costs: wages.

You could then say to any business that they can accept bitcoins directly, and keep them in bitcoin - because they can always spend that on wages. It solves the "why would I want to keep them, what can I buy with them" question.

Of course, if employees then also start accepting part of their paycheck in bitcoin things really start moving along nicely.

Excellent point! We agree that enabling more use cases for companies on the business side is important to growing the bitcoin ecosystem.

We currently have companies using our system to pay employees with their own stock of bitcoins, which they then choose to have sent into our cloud savings solution or as Bitcoin. However, this is something that we plan to offer in the (not-so-distant) future. This would be a special service that companies would have to sign up and pay for.

[Skin_in_the_game]

Hello Jonathan

I'm re-reading Antifragile by iconoclast thinker Nassim Taleb these days. He writes

"Never ask anyone for their opinion [...] Just ask them what they have -or don't have- in their portfolio"

Having met or read about a few people in the bitcoin community, I have come to think it's a very relevant question and you can better weight their opinions having an idea of how much Bitcoin if any at all they hold.

2 examples:
Someone can be very critical of Bitcoins while holding a lot
Someone can advocate for this or that concerning Bitcoins or declaring it the future while not holding any.
But there are many other configurations.

Anyway I decided to create this account today. sad I didn't do it at the start of these AMA. But from now on I will ask every participants to tell us a range of their bitcoins holdings rather than asking them their opinion on Bitcoin and its future.

So my question is:

Can you tell me the number of Bitcoins you own today?
a/ <10
b/ 10-100
c/ 100-1,000
d/1,000-10,000
e/10,000-100,000
f/more than 100,000

Also, I first asked this question to Paul of Airbitz today. He suggested that the percentage of net worth or liquid assets held in bitcoin were more interesting and I can agree with him.

[JonathanChester]

Hello Jonathan

I'm re-reading Antifragile by iconoclast thinker Nassim Taleb these days. He writes

"Never ask anyone for their opinion [...] Just ask them what they have -or don't have- in their portfolio"

Having met or read about a few people in the bitcoin community, I have come to think it's a very relevant question and you can better weight their opinions having an idea of how much Bitcoin if any at all they hold.

2 examples:
Someone can be very critical of Bitcoins while holding a lot
Someone can advocate for this or that concerning Bitcoins or declaring it the future while not holding any.
But there are many other configurations.

Anyway I decided to create this account today. sad I didn't do it at the start of these AMA. But from now on I will ask every participants to tell us a range of their bitcoins holdings rather than asking them their opinion on Bitcoin and its future.

So my question is:

Can you tell me the number of Bitcoins you own today?
a/ <10
b/ 10-100
c/ 100-1,000
d/1,000-10,000
e/10,000-100,000
f/more than 100,000

Also, I first asked this question to Paul of Airbitz today. He suggested that the percentage of net worth or liquid assets held in bitcoin were more interesting and I can agree with him.

Interesting question, and I agree with Paul in the sense that this question tends to over exaggerate how bullish someone is when they have a large net worth and under exaggerate when someone has a small net worth. I am currently receive 5% of my wages in Bitcoin. This may not seem like a lot, but even with the recently big fundraise, I am taking a below market salary and need my funds to be liquid for everyday expenses.

That being said, this will likely change soon. We recently released an android app that allows users to look up their payrolls, connect to our cloud savings, connect to our debit card and to transfer funds between the two. This means that I have everything I need in an app for my everyday financial needs. The only issue is that as an American citizen living in the US, our debit card solution does not work very well (The cards cannot be shipped to the US and there is a lifetime limit for people who do not have proof of address outside of the US). Once this changes (and we are working very hard on changing this), I plan to start receiving my wages between 50% and 90% through bitwage, with the remaining for purchases that require checks.

It is very important to eat your own dog food, especially in emerging industries like the bitcoin industry. How will you be able to effectively convince someone that Bitcoin has the ability to bank the unbanked and to introduce much needed competition to the banks (which should force them to innovate to stay relevant) when you do not know how to send a simple transaction? With Bitwage in particular, from my perspective, the best way to improve the user experience is to be one myself. And when we have US debit cards, I'll be fully integrated into the Bitwage system.

[dcb]

Jonathan, Congrats on the latest round of funding.

I wanted to walk through what I feel is a compelling use case for your service and get your thoughts:

If I were a contractor living in a country where I didn't have much faith in my local currency, I would ideally like to receive payment from my employer denominated as follows: 80% USD, 15% Gold, 5% Bitcoin. Could I do this with your service and use it as a "savings" account and then convert to my local bank's checking account to pay my bills. I believe this would make more sense due to the fees for the Xapo VISA card.

What fees does Bitwage charge for this service? I'm guessing there are hedging costs in this scenario if bitcoin is the underlying asset in the account.

Thanks for participating in the AMA.

[knight22]

Hi Jonathan,

I would really like to use your services from Canada. Do you know if/when your company will support other countries for wages conversion?

[JonathanChester]

Jonathan, Congrats on the latest round of funding.

I wanted to walk through what I feel is a compelling use case for your service and get your thoughts:

If I were a contractor living in a country where I didn't have much faith in my local currency, I would ideally like to receive payment from my employer denominated as follows: 80% USD, 15% Gold, 5% Bitcoin. Could I do this with your service and use it as a "savings" account and then convert to my local bank's checking account to pay my bills. I believe this would make more sense due to the fees for the Xapo VISA card.

What fees does Bitwage charge for this service? I'm guessing there are hedging costs in this scenario if bitcoin is the underlying asset in the account.

Thanks for participating in the AMA.

Thank you for participating in the AMA!

The missing part in this scenario is what country you are living in. If we have a banking output in your country, then this can mostly work through our system. We currently only have a split between two outputs, which would mean 80% USD and 20% Gold or Bitcoin. This can, however, be switched whenever you wish, so you could do 20% gold three weeks in a month and 20% one week in a month to achieve 80%, 15% and 5%.

We have no fees, however, if you are going from USD to BTC or to another foreign currency, make sure to check out exchange rates that are always visible at the top of our website. You can also check out our historical prices here by clicking the "Historical Ticker" tab: https://www.bitwage.com/usage

[JonathanChester]

Hi Jonathan,

I would really like to use your services from Canada. Do you know if/when your company will support other countries for wages conversion?

Hi Knight22,

We are working very hard to support other countries for wage conversions. Canada is on our road map, but probably not until 2016.

Jonathan