Before we start pointing out all the pros and cons of using crypto payments in the freelancing business, let’s create a short intro about what cryptocurrencies represent and what are the most common ones among online users.
Cryptocurrencies, or short-crypto, represent a digital/virtual sort of currency that is based on a blockchain system. Why would someone opt for cryptocurrencies instead of “real” money? The truth is that these decentralized systems work independently, or better said they are completely independent of any central authority.
Of course, when we talk about one of the most popular cryptocurrencies that are used, we believe that you’re surely familiar with the famous Bitcoin. An interesting fact about Bitcoin is that it was created by an anonymous person back in 2009. Of course, we believe that it may be created by a group of people, by who have used fake names, and pseudonyms, and calling themselves Satoshi and Nakamoto.
What Bitcoin is mostly famous for is peer-to-peer electronic cash system, which means that online users are able to send and receive payments without a third party, or in this case – banks.
Besides Bitcoin, there have been many other cryptocurrencies created, and all of them offer something different, and have their own pluses and minuses, and bring different features. This means that if you want to use a cryptocurrency, you’ll probably choose one that serves your purposes in the best manner.
For example, online workers who work mostly on small contracts like to opt for Ethereum because it’s the best crypto for it, while those who are concerned about privacy claim that Monero is the best one if you want to stay completely safe.
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Financial privacy and decentralized nature are the reasons online workers love cryptocurrencies
Probably two main reasons why more and more online workers of all sorts use crypto – because of financial privacy and decentralized nature. Of course, there is also the third reason – privacy. Yet, we must remind you that no matter how popular cryptocurrencies have become, their acceptance as a mainstream source of payment can vary from country to country, or better said by the laws of a certain country.
Cryptocurrencies leverage cryptographic techniques to safeguard transactions, oversee the creation of new units, and validate asset transfers. By employing these methods, the integrity and security of the cryptocurrency network are upheld. Cryptography encompasses intricate mathematical algorithms and encryption methods, serving to shield data and regulate the generation of fresh units.
Okay, now that we have talked a bit about crypto in general, let’s see why freelancers love to use it.
These are some of the most common reasons for using crypto in your online business:
1. Freelancing includes global Payment services. As a freelancer, or online and remote worker, you will receive various payments from clients from all parts of the globe. That’s exactly what cryptocurrencies can offer you. Or even better – you’ll receive all those payments without the need for traditional banking systems. And while brings you money quickly and securely, by bypassing lengthy international transfer processes and associated fees, be sure that you get familiar with the laws in your country related to cryptocurrencies.
2. Freelancers are searching for ways that can lower transaction costs. And again, crypto brings a solution. Freelancers and online workers love them because of the much lower fees. And yes, this is good, but probably only for freelancers who are working on small contracts and receiving smaller amounts of money.
3. Thinking about your freelance financial privacy. You don’t want to share your sensitive information with literally every client you meet online, right? Well, it’s true that cryptocurrencies can solve this issue too. It’s simple to use cryptocurrency addresses to receive payments. This can also protect you from online fraud.
4. Security. As we have mentioned at the beginning of this article, all cryptocurrencies utilize advanced cryptographic techniques, which makes transactions highly secure. Besides that, there’s also immutability and resistance to tampering.
5. Freelancers may not have access to some banking services. Let’s say that you don’t have access to traditional banking services, but you want to start your freelancing career. What would you do? Yes, you would search for which is the best crypto for your needs. If you live in a region with limited banking infrastructure, cryptocurrencies can be your key to participate in the global freelance marketplace.
6. Get a greater control over their funds. When you start using cryptocurrencies, you are no longer relying on banks or payment processors. Managing your transactions can become easier than ever. Freelancers usually point out that this also brings them independence.
Some of the main cons of using cryptocurrencies in the freelancing business would include:
1. Cryptocurrencies are known for their price volatility. This is probably one of the main issues with crypto, and that’s exactly why we have pointed out this problem in the first place. Cryptocurrency values are often experiencing significant fluctuations within short periods. Let’s say that you have earned $200. If the crypto goes through a lot of changes, you may end up earning a lot less than you have expected. That’s exactly why experienced online workers will tell you that using crypto may ne bot a great idea if you’re not familiar with blockchain in general. Get some knowledge before you start using them.
2. Cryptocurrencies are still not widely accepted as traditional payment methods. Yes, more and more people are getting familiar with crypto and starting to use it, but the truth is that these are still not as widely accepted as you may think. Let’s say that you meet new clients who are not familiar with cryptocurrency payments. You’ll still need to use traditional ways to receive your money. So, maybe crypto can be your plan B, but definitely still not one and only plan for receiving hard-earned freelancing money.
3. Think about exchange and conversion challenges. For those who don’t know, when you want to convert cryptocurrencies into traditional fiat currencies, the entire process may involve additional steps and fees. It’s no secret that a lot of freelancers still need to rely on some third party with a purpose to transfer crypto into usable currency. This will not only end up in conversion challenges but can produce delays in payments as well.
4. Tax reporting. We believe that this is a real nightmare for every freelancer – tax reporting. Cryptocurrencies can cause regulatory uncertainty. A lot of freelancers claim that they not only had issues with tax reporting, but also with compliance, and legal obligations. We have said it already and we will remind you again – be sure that you get useful and important information related to proper usage of cryptocurrencies in your location.
5. Are there some security risks? Previously, in our pros section on using cryptocurrencies, we talked about how secure they are. Yet, you have to be familiar with practices that include some knowledge related to protecting your cryptocurrency wallets and private keys from hacking, theft, or loss. You must understand that all security here is left on you, or any other individual that is using cryptocurrencies.
6. Using crypto requires at least a bit technical knowledge. We have also pointed out that cryptocurrencies should not be the first choice for beginner freelancers and those who don’t have at least some technical and blockchain knowledge due to technical complexity. Still interested in using crypto, but don’t know what topics you must cover? Learn more about digital wallets, blockchain transactions, and managing private keys. This will definitely help you to prevent some serious financial losses.
7. Reversible transactions. It’s different than using traditional banking systems – let’s say that you have become a victim of online fraud and lost your money. How will you get it back? Well, we don’t want to disappoint you, but it may be almost impossible to recover your wallet. This means, as said already above, that all responsibility is on the individual – you.
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Conclusion
After all this being said, we believe that cryptocurrencies may be the best option for freelancers who are working part-time, or just working on small contracts. Crypto will help you to escape high fees and get your finances in order – quickly. Of course, don’t forget to check all those laws and regulations in your country that are related to using crypto. And don’t immediately choose Bitcoin, but rather search a bit more – maybe some other crypto payment service can suit your needs better.
Get more amazing advice about getting your freelance finances in order in this article.
