How could wages in Bitcoin work?

[CountSparkle]

Why not treat it like apartment leases, where every 6 to 12 months both parties can come together, discuss their situation (tougher times for the company v.s. have been an excellent employee performing all duties well), and renegotiate the pay? That way good employees can defend their income, the company can readjust expenses if something happens, and bad employees can be slowly gotten rid of as they quit due to lower pay.

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[RodeoX]

One could envision new ways of paying wages in bitcoin. You could pay pickers by the bushel. Every time they dump a new load, their wallet is sent an amount. This could work for all sorts of projects in an automated way. Forget being paid "by the hour". Why not "by the ...??"

[scatha]

.... when the BTC market scales to this size, the transaction fees of 0.0005 BTC would "suddenly" become a serious expense, so, payouts would be made as rarely as possible, and very likely some banks would print fractional-reserve milli-BTC notes to use as cash based on true bitcoins, and new "lite payment" system would arise

[notme]

.... when the BTC market scales to this size, the transaction fees of 0.0005 BTC would "suddenly" become a serious expense, so, payouts would be made as rarely as possible, and very likely some banks would print fractional-reserve milli-BTC notes to use as cash based on true bitcoins, and new "lite payment" system would arise

Unless the BTC market scales to this size "suddenly" the transaction fee won't "suddenly" become a serious expense.

[edd]

.... when the BTC market scales to this size, the transaction fees of 0.0005 BTC would "suddenly" become a serious expense, so, payouts would be made as rarely as possible, and very likely some banks would print fractional-reserve milli-BTC notes to use as cash based on true bitcoins, and new "lite payment" system would arise

Unless the BTC market scales to this size "suddenly" the transaction fee won't "suddenly" become a serious expense.

The transaction fee can be whatever you want it to be, from zero to everything in your wallet.

[dave111223]

It's a weird concept to think about salaries with a deflationary currency.  Instead of an "annual raise" you'd get an "annual cut"...

Imagine coming home from work and saying to the wife "Got my annual cut today, only 3%!"..."Congratulations!"

[DeathAndTaxes]

It's a weird concept to think about salaries with a deflationary currency.  Instead of an "annual raise" you'd get an "annual cut"...

Imagine coming home from work and saying to the wife "Got my annual cut today, only 3%!"..."Congratulations!"

It IS weird to think that way but only because we are so accustom to the idea that prices always rise.  What if the wife's response was "That's great the power company announced a 7% cut in our electric rates. More coins to put in cold storage".   

Ok maybe that isn't going to happen.

[Walter Rothbard]

Eventually I would imagine that Bitcoin's value will be much more stable than it is now.  Slow deflation, yes, but not something where you'd see a huge price cut every year.

[thoughtfan]

One way I've been considering (given that I'm in construction with many migrant day-rate subcontracting workers, many of whom send money home) is to give them the option of being paid in Bitcoin rather than as a bank transfer.  We wouldn't want to offer part bank/part BTC because the company pays a fixed bank fee per transaction so there's be the additional administrative overhead of the Bitcoin payment without the saving of the transfer fee.

The way I envisage it (and I'd welcome comments/suggestions) is to set up a system which would take a single DistributingAddress and for each subbie a BitcoinAddress, SplitRatio and IsOptedForBitcoin field.  So the way the process would work is:

• The pay run list is generated as it is now showing who is owed what after tax;
• The list is split to into two with those having opted for Bitcoin on one and those to be paid by bank transfer on the other;
• From the total to be paid in Bitcoin the ratio to be paid to each subbie is calculated and put against their receiving address;
• From fiat already sitting on MtGox the total (plus transaction fee) is converted;
• The exact Bitcoin sum converted is sent as one lump to the distributing address;
• The system automatically splits that lump according to the ratios and forwards to the subbie addresses;
• From an accounting/record-keeping perspective the net element of each Bitcoin subbie's pay would be paid off as its fiat value against the MtGox account.

In terms of additional processes, on the pay run database it would be pretty straightforward to pick up who has opted for BTC from the distribution system and to calculate the ratios to export for import into the distribution system.  The administrative and cost saving would be obtained from having a shorter list of folk to pay by bank transfer.  Maybe it would even be possible to have the distribution system in the cloud so subbies could have access to amend their receiving address themselves and to select/deselect their preference for BTC/GBP as frequently as they want?

I could even make myself some pocket money by turning up on site at the end of the day on pay day to buy Bitcoin from anyone who wants some of it as GBP cash straight away!

OK, so I think this is now great in principle.  The only problem I see is that I don't think the bank transfer charge for the amounts we pay is as high as the .6% MtGox transfer charge (plus cost of wiring the money to japan) would work out.  Ah well!  Nice thought.

For now I guess it would take demand from the subbies for this and a preparedness to take a hit on their pay to cover their costs - which they'd only be prepared to do if they understood Bitcoin well enough already that they would consider transferring their fiat to Bitcoin themselves (for saving/investing, for international transfer or for silk road)!  Anyone here London-based who speaks Romanian/Polish/Lithuanian/Albanian well enough to come to site to sell the advantages of Bitcoin

Maybe also instead of using MtGox we could build a relationship with a Bitcoin dealer to negotiate a better rate.

If we did get this far and it worked then we'd also be able to offer to our off-shore clients to make the company part-payments in Bitcoin, thus saving them international wire transfer fees and delays.  Then we're cooking on gas!

[grue]

It *can* work like this:

http://ciyam.org/open

(site is still being developed but not far from complete - get ready to earn BTC for tasks in a professionally organised way)

i get blank page

[CIYAM]

It *can* work like this:

http://ciyam.org/open

(site is still being developed but not far from complete - get ready to earn BTC for tasks in a professionally organised way)

i get blank page

Try now.

(sorry might have been doing some upgrades when you tried before)

Also you *need* to have JS enabled and it must support sessionStorage/localStorage (although I would have thought you'd see a message about that - PM me if still having troubles - this is why it is still in Beta).

[caveden]

It's a weird concept to think about salaries with a deflationary currency.  Instead of an "annual raise" you'd get an "annual cut"...

Imagine coming home from work and saying to the wife "Got my annual cut today, only 3%!"..."Congratulations!"

It IS weird to think that way but only because we are so accustom to the idea that prices always rise.  What if the wife's response was "That's great the power company announced a 7% cut in our electric rates. More coins to put in cold storage".   

Actually, if the money supply is constant, the average salary would decrease only if the workforce increases. Giving the world's demographic trend, it wouldn't be impossible for the opposite to start happening in many places a few decades from now.

[markm]

Maybe employers can use these purported "problems" of paying in bitcoins to argue that wages should be paid in freicoins, with the workers free of course to use those freicoins to buy bitcoins with if they choose to. Freicoin seems to need some lure to lure people into it, maybe employers would be good people to approach about the idea of using freicoin instead of bitcoin, if only for paying employees...

-MarkM-

[memvola]

Maybe employers can use these purported "problems" of paying in bitcoins to argue that wages should be paid in freicoins, with the workers free of course to use those freicoins to buy bitcoins with if they choose to. Freicoin seems to need some lure to lure people into it, maybe employers would be good people to approach about the idea of using freicoin instead of bitcoin, if only for paying employees...

It may not be deflationary in the long term, but is there a fundamental about Freicoin that ensures higher stability than Bitcoin?

[markm]

Its not about stability, its about saving your precious bitcoins and spending stuff that loses value constantly by design ("demurrage") so as to try to force it to be better for spending than for saving. (Everyone wants to get rid of it as it devalues b y about 5% per year. So give it out to the working class as pocket money for wages, let them (try to) buy bitcoins with it if they want to save, or food clothing shelter with it if they want food clothing shelter...

-MarkM-

[dree12]

You are ignoring that Bitcoin also has demurrage, though far less regular. Every coin will eventually be lost, most of them not purposely. Demurrage in Bitcoin can be minimized, but it will never be eliminated.

[thoughtfan]

You are ignoring that Bitcoin also has demurrage, though far less regular. Every coin will eventually be lost, most of them not purposely. Demurrage in Bitcoin can be minimized, but it will never be eliminated.

No, the Bitcoins being lost has the opposite effect than demurrage in that it increases the value of all remaining Bitcoin.  The point with demurrage is that there is an associated cost with holding onto currency.  By holding it it loses value.  From what I understand in the case of freicoin it's as if the coins are slowly seeping out of your wallet to the miners.  The purpose is to encourage people to invest and to spend; to give an incentive to its users to keep the money moving.  Although I sort-of see why that might be a good idea I don't understand why people would choose for themselves to use such a currency over one that does not lose value.  But that's something for another thread

[TooCasual]

If you don't know how much the price will change in terms of BTC in the next X days, but have some estimations for the next Y days, then you simply negotiate a price within this timeframe. With an option to renegotiate later.

Another option: use USD (or EUR, or $AAPL or whatever) as a reference point if both parties agree. You can say "I'll pay you next month amount in BTC equal to X USD according to the average price on Mt. Gox".

Exactly....  (BTC's value of the workers country's currency - at the time of payroll)...  simple simple. 

[Mike Christ]

You are ignoring that Bitcoin also has demurrage, though far less regular. Every coin will eventually be lost, most of them not purposely. Demurrage in Bitcoin can be minimized, but it will never be eliminated.

Someday in the distant future, we'll all be trading the same bitcoin and will have resorted to the satoshi  

I think that's a ways off tho  

Also, I support the idea of working by the amount of work done.  However, a lot of jobs in the services industry never have an exact amount of work for you to do.  A security guard, for example, would have to be paid by the hour.  Considering a lot of our jobs are being sucked up by machines and the only jobs left will be the jobs a machine can't do, an hourly wage or a salary would be only way to go.

From there, I suppose it would work relatively the same as today, except when payday comes around, you'll get sent an amount based on the time you worked to the code you supplied to your employer.

[memvola]

Its not about stability, its about saving your precious bitcoins and spending stuff that loses value constantly by design ("demurrage") so as to try to force it to be better for spending than for saving. (Everyone wants to get rid of it as it devalues b y about 5% per year. So give it out to the working class as pocket money for wages, let them (try to) buy bitcoins with it if they want to save, or food clothing shelter with it if they want food clothing shelter...

That's why I'm asking. If Freicoin ends up to be volatile as a consequence of its nature, it won't be suitable for goods, which would make it unsuitable for wages. I think vendors would prefer pricing in BTC rather than freicoins, which defeats the purpose of denominating wages in Freicoin.