Can Bitcoin help to balance salaries across the world?

[shield132]

Bitcoin is the first truly global currency. It can be used by anyone having access to the Internet, in any country.

Imagine now a world where salaries are paid in Bitcoin. This would enable us to compare salaries all over the world. And at least regarding work done online, like programming, graphic design and other typical freelance and digital work, it could help to establish a "global" salary level and thus help to balance inequality. [1]

There are freelance sectors where this already is the case, like our signature campaigns here, but also the Value4Value economy on Nostr, but it's still niches. Of course for this to work on a bigger scale than now, Bitcoin price would have to become more stable.

Also you could counter this argument that on freelance platforms the USD is used as a kind of substitute global currency, and international freelancers are competing there without country limits. However, there are several countries where the access to the USD is restricted, or where the conversion to a convenient rate is difficult. Thus a truly global currency like Bitcoin still could help to make salaries more "comparable".

What do you think?


[1] You could of course argue that the inequality has also to do with differences regarding the education level. But even regarding "digital" work, there are still salary differences which can't be explained by this - i.e. where a work of similar quality is more expensive in some countries than in others.

Salaries can be paid in Bitcoins but they will always be calculated in USD at first, that's how the economy works at the moment. There isn't a situation like, the salary of the senior angular developer is 1 Bitcoin a year. It's still in USD and Euros. You already prove what I said but in countries where access to the USD is restricted, mostly access to Bitcoin and cryptocurrencies are restricted too and on top of that, ISPs control everything in such countries.
Bitcoin is the best international payment method from point A to point Z all around the world where access to the Internet is possible. The usage of Bitcoin is there as a payment method but I don't think salaries will be calculated in it directly, without considering the USD value of Bitcoin.

[tabas]

I agree that it can help, with the matter of inequality. I've read from some other forums of freelancers that there are clients that do like to bring the contract outside the platform where they work, I guess everyone who works there is familiar with this kind of condition. And then, the clients ask their freelancers to get paid not in USD, not in PayPal, not in any other payment processor but in Bitcoin. The agreement between two parties will rely on the trust that they have for each other, or let's say the trust the freelancer has got to their clients. The only problem here is when the fees have also fluctuated a lot, a client won't afford to pay for the $100 fee when the freelance job is just around $10-$50. From there, that's how they'd start using alternatives like USDT with its cheap networks.

[Darker45]

A company doesn't hire locals if that means a higher salary all the while there are abundant and exactly the same skills available overseas that are much cheaper.

~snip~

But I believe a "balancing" or "levelling" could occur as a very slow and gradual process. If the mentioned worker sees, in a global currency, what people from "richer" countries get for exactly the same work, then he may adjust his standards a bit to the upside. Of course this already happens with the USD as "de facto global currency", but with Bitcoin it would become even clearer. This is why I highlighted the "sense of value" in the earlier post.

Let's say (assuming we stay stable at current prices around $56-63k) a person from *typical poor country* is about to offer a programming job for 0.0003BTC / hour (about $15-20 in dollars) and sees that his US/European colleagues charge no less than 0.0008. Some would then be tempted to go up to 0.0004 or even 0.0005. Or they work on their language skills to not appear like "the typical cheap programmer from overseas" and then is able to even go to 0.0005 or 0.0006.

Again, the bottom line would be the local prices of goods and services. If the prices of goods and services greatly vary from one country to another, it is next to impossible for salaries to achieve a global standard.

Supposing there are two programmers with the same level of competence. One needs $20 a day for food while the other only needs $2. The latter would be more than happy to offer his/her services for $20/day. The former thinks this is unreasonable. Knowing the reality, employers would definitely hire the latter. The latter, however, cannot easily demand a salary according to a different standard because he/she is dispensable. There may be a handful that companies find worth bidding but the rest could easily be replaced. This is the real world case.

Although I agree that Bitcoin has the potential to unify our sense of value, what's happening right now is the opposite. Bitcoin adjusts to its local fiat equivalent. Unfortunately, Bitcoin advocates cannot insist on 1BTC=1BTC ideology because of so many factors which could be summed up as the fiat standard. For as long as the economy is based on fiat and is locally controlled, there can never be a global standard in prices and therefore in salaries.

[3kpk3]

Nope. Not at all. Am a big fan of BTC myself, but its volatility is annoying as hell sometimes which is why its unbalanced nature cannot really be utilised to balance global salaries across the world in my opinion.

On the other hand, USDT could manage to do that since it's almost always stable in nature except for a few crazy hiccups here and there.

[fuguebtc]

Bitcoin is the best international payment method from point A to point Z all around the world where access to the Internet is possible. The usage of Bitcoin is there as a payment method but I don't think salaries will be calculated in it directly, without considering the USD value of Bitcoin.

Our forum has many jobs that pay in bitcoin, and I think this forum has the most jobs that pay in bitcoin. But at the end of the day, all of those bitcoins before being paid out to people will also be based on the value of USD at that time.

Everyone wishes that one day bitcoin could be used as the world's official currency but honestly, I don't think that will happen. Governments will never accept and use BTC even if USD dominance collapses. There will certainly be another national currency to replace it, bitcoin will never be the choice of governments.

[Dr.Bitcoin_Strange]

The only possible way that this can come  to light is if Bitcoin becomes a legal tender world wide but if it's now, then such can not happen. I believe that the government of every country in the world might not approve for Bitcoin to become a legal tender. Personally, I don't even support for Bitcoin to be used in paying salary if we still have to spend on our needs using fiat money.

[DrBeer]

Bitcoin is the first truly global currency. It can be used by anyone having access to the Internet, in any country.

Imagine now a world where salaries are paid in Bitcoin. This would enable us to compare salaries all over the world. And at least regarding work done online, like programming, graphic design and other typical freelance and digital work, it could help to establish a "global" salary level and thus help to balance inequality. [1]

There are freelance sectors where this already is the case, like our signature campaigns here, but also the Value4Value economy on Nostr, but it's still niches. Of course for this to work on a bigger scale than now, Bitcoin price would have to become more stable.

Also you could counter this argument that on freelance platforms the USD is used as a kind of substitute global currency, and international freelancers are competing there without country limits. However, there are several countries where the access to the USD is restricted, or where the conversion to a convenient rate is difficult. Thus a truly global currency like Bitcoin still could help to make salaries more "comparable".

What do you think?


[1] You could of course argue that the inequality has also to do with differences regarding the education level. But even regarding "digital" work, there are still salary differences which can't be explained by this - i.e. where a work of similar quality is more expensive in some countries than in others.

I'm gonna have to disappoint you. Bitcoin is not a “magic wand” that “saves you from all your troubles”. It's just another tool. I've already heard many fantasies about “bitcoin will save the economy”.... But as soon as we move away from fantasies, and start applying bitcoin to the real world, the real economy, real processes - everyone realizes that it is not realizable.

It's the same with wages. The idea is beautiful, but utopian. Just try to apply your idea for today's real world, such as it is, and you will very soon realize that it is unrealistic.... At least start with the fact that wages form the cost of production and try to make this process universal for the whole world, for different countries, different economies, different standards of living....

[davis196]

There are freelance sectors where this already is the case, like our signature campaigns here, but also the Value4Value economy on Nostr, but it's still niches. Of course for this to work on a bigger scale than now, Bitcoin price would have to become more stable.

1.Any ideas on how to make the Bitcoin price more stable?

2.What exactly are you proposing? The creation of a freelance platform, where the freelancers are paid in BTC only?
I remember several crypto freelance platforms being built in the last several years and none of them became the new Fiverr or Upwork.

3.Bitcoin is "digital gold", which makes the whole idea of spending BTC for goods and services(even labor costs) kinda difficult for implementation.

4.Bitcoin cannot magically "equalize" the salaries across the world. The process of equalizing the level of labor productivity can equalize the salaries. Another thing is the overall cost of living. People in some underdeveloped countries could live with 300 USD per month, while it's impossible for an American to live with 300 USD per month in the USA. That's why many programmers from Asia and Africa can offer cheap online services. Maybe equalizing the cost of living could equalize the salaries.

[Davidvictorson]

You make sense, but maybe it will happen if only it is possible that everyone will like bitcoin and agree to start using it.

No possible.
Bitcoin is yet to reach the underserved communities in Africa. The technology around it cannot be understood by the folks who live there and there are too many barriers from the technology to the enabling environment and then policies. Even in those communities the use of fiat is not something they are used to. Some places even still use the trade by barter system. This is why I say, the despite the possibilities of Bitcoin in balancing salaries, these barriers to it must be overcome first.

[uneng]

What do you think?

It's not possible. Wages have to be measured and defined taking the local reality of each country and region due to living costs being different in each environment. If we had a global default wage for every graphic designers, for an example, it would be totally benefical for the ones living in third world countries, but heavily detrimental to the ones living in first world countries, considering the costs they pay to live there are much superior.

An example of that we can already notice right now are the signature campaigns. For someone living in USA or UK, the income they make from signature campaign on this forum is only an extra minor income compared to their total monthly budget, while someone from India or Venezuela engaged in the same activity can make a relatively comfortable living from it.

Moreover, to define wages artificially doesn't sound an efficient idea to fix the issue of underpaid employees. The market works around the supply and demand law, and that is what we have to keep in mind when choosing what we are going to work with. That is, to work in a demanded niche, which doesn't have enough supply of labor force yet.

[Nwada001]

Nope. Not at all. Am a big fan of BTC myself, but its volatility is annoying as hell sometimes which is why its unbalanced nature cannot really be utilised to balance global salaries across the world in my opinion.

On the other hand, USDT could manage to do that since it's almost always stable in nature except for a few crazy hiccups here and there.

Even if bitcoin is highly volatile, I don't think we should consider using USDT over it if any crypto currency is ever going to be used for global salary scale balancing.
 
It's better to be paid in bitcoin, and the payment is being calculated not just by bitcoin value or price, but the salary will be scaled by units of bitcoin. What the price might be at that time should not matter.
 
Let's not forget that USDT is a centralised asset that is controlled, adding to the fact that if anything happens to the issuer, it can be depegged and its value could drop to zero.

[d5000]

Again, the bottom line would be the local prices of goods and services. If the prices of goods and services greatly vary from one country to another, it is next to impossible for salaries to achieve a global standard.

Yep, already wrote about that in the thread (perhaps not in your answer specifically). However, the title of the thread is help to balance the salaries, so the "salary/price comparability" can be only one factor among many.

By the way unfortunately living costs and salary level are not always connected. In many South American countries for example supermarkets are more expensive than in Europe, housing is cheaper but not by that much to justify a difference of 4-5 times when comparing the European salary level to the South American one. So we can say that living costs are one factor among many, too. Of course another factor is the supply/demand situation - workers from a country with higher unemployment rate tend to reduce their expectations.

What I want to discuss in this thread is to identify if there are mechanisms where Bitcoin or any other global currency can help to reduce inequality: like the "sense of value" issue and transaction costs.

Although I agree that Bitcoin has the potential to unify our sense of value, what's happening right now is the opposite. Bitcoin adjusts to its local fiat equivalent. Unfortunately, Bitcoin advocates cannot insist on 1BTC=1BTC ideology because of so many factors which could be summed up as the fiat standard. For as long as the economy is based on fiat and is locally controlled, there can never be a global standard in prices and therefore in salaries.

While I agree that we're currently not in the situation, I dispute that Bitcoin never can be a global standard for prices & salaries. I already wrote in another answer that Bitcoin could relatively soon become as stable as gold (1-1.5% 30-day volatility). This would be approximately the case in 5 years if the reduction of volatility according to the index I quoted in one of the first posts in this thread continues. In this case we would probably begin to see prices in Bitcoin. Salaries would probably take a bit longer (outside of some freelancing niches), but could eventually follow.

1.Any ideas on how to make the Bitcoin price more stable?

There are actually a lot of approaches, but all tackle only small parts of that task. Some are related to the "communication about Bitcoin", while others are more "technical".

- Promotion of Bitcoin not as "get rich quick" scheme, but as an alternative to save and as a currency, to gradually reduce too speculative expectations.
- Instead of focusing so much on bull markets and the explosive profits you could make there, people and companies could focus on the opportunities the "crypto winters" offer to get cheap coins.
- More decentralized financial products based on Bitcoin, like options.
- More use as a currency for payments, because this boosts liquidity and liquidity is a big factor contributing to stability.

Main hope in my opinion is liquidity, which depends also on "currency usage", and indirectly on scalability. Probably liquidity improvements are the reason for the long term volatility reduction (in the short term there are still spikes) we are experiencing (see again the Bitbo Volatility Index).

2.What exactly are you proposing? The creation of a freelance platform, where the freelancers are paid in BTC only?

No. It's a purely theoretical discussion about one of possible future advantages of a "Bitcoin world" or "Bitcoin standard", the main question being if a truly global currency could help unifying the "sense of value" for work. Freelancing platforms like you mentioned can help, but with the current volatility are very likely only be able to cover some small niches.

3.Bitcoin is "digital gold", which makes the whole idea of spending BTC for goods and services(even labor costs) kinda difficult for implementation.

Why? There is Lightning and there can be other second layers so technically there are relatively few barriers. The "difficulties" are all related to volatility (so see above). Spending if you can re-buy and get paid in BTC is not really a problem if the concern is about losing the opportunity to benefit from an increasing price.

The process of equalizing the level of labor productivity can equalize the salaries. Another thing is the overall cost of living.

Labor productivity is a good point and for sure has some influence. But it not always is the main reason for differences. If we stick to the example with the freelance computer programmer I outlined in other answers, then labour productivity would not influence the price of the work, as such contracts usually are priced "by finished work" while labour productivity is calculated by hour. And still there are often sharp differences in pricing depending on the country and sometimes even region the "worker" comes from.

So again, it's one factor but one among many. Regarding cost of living, see my answer to @Darker45 and others.

It's just another tool.

Exactly. The idea is that it could be a tool to combat some, not all of the mechanisms which produce inequality. See the word "help" in the title

Bitcoin is yet to reach the underserved communities in Africa. The technology around it cannot be understood by the folks who live there and there are too many barriers from the technology to the enabling environment and then policies.

This is of course true. There could be however a gradual process, where the salary balancing could first happen in urban environments and "globalized" sectors of the economy, and then trickle slowly into rural areas. In some poorer countries I know, the urban/rural differences aren't not that pronounced.


To summarize a bit the discussion until now, I think we all agree that there are some factors determining salary inequality which can not be tackled by Bitcoin or a "global currency", at least not directly: Labour productivity, cost of living and things like infrastructure. And there's of course discrimination due to the origin of the workers often working "in the background" lowering the prices of workers of certain origin.

However, I still insist on that there are factors where it could help, mainly the "sense of value" area and transaction cost and perhaps other issues related to financial inclusion.

[Fiatless]

However, I still insist on that there are factors where it could help, mainly the "sense of value" area and transaction cost and perhaps other issues related to financial inclusion.

With the high number of unbanked population in some countries, Bitcoin could be a good medium for providing accessible financial services. Some persons have to travel a long distance just to have access to banking facilities where their salaries have been deposited. Paying workers with Bitcoin can bridge this gap.

Some of these unbanked populations have to pay high service charges if they want to have access to their salaries through middlemen. Bitcoin can offer cost-efficient financial services to the unbanked populace.

Using the services of some of these third-party financial services providers exposes users to the risk of scams and loss of earnings. With the secured financial services of Bitcoin fraud and scams are reduced since people now have full control of their wallets.      

[MarjorieZimmermanGinger]

Imagine now a world where salaries are paid in Bitcoin. This would enable us to compare salaries all over the world. And at least regarding work done online, like programming, graphic design and other typical freelance and digital work, it could help to establish a "global" salary level and thus help to balance inequality. [1]

There are freelance sectors where this already is the case, like our signature campaigns here, but also the Value4Value economy on Nostr, but it's still niches. Of course for this to work on a bigger scale than now, Bitcoin price would have to become more stable.

This idea may be difficult to implement because some people are used to using fiat currency as a way to receive their salary or make purchases. Some lay people would find it difficult to accept a salary paid in bitcoin. But if this idea was put forward to people who like bitcoin then perhaps they would rationally support it. We also hear that some places are now using bitcoin as a salary payment, although the scope is still relatively small. About bitcoin becoming more stable and powerful I doubt this can happen, but some people would probably accept the idea much more easily.

But for those of us in the forum, the price fluctuations are what make bitcoin the best choice and I doubt that when prices become more stable bitcoin will be one of the best choices for some. The idea will certainly be an innovation and it is possible that in the future it will be used as a step of choice.

[Huppercase]

.
Also you could counter this argument that on freelance platforms the USD is used as a kind of substitute global currency, and international freelancers are competing there without country limits. However, there are several countries where the access to the USD is restricted, or where the conversion to a convenient rate is difficult. Thus a truly global currency like Bitcoin still could help to make salaries more "comparable".

What do you think?

US is home to many big techs and what other countries does is from there own reference. So when we say Bitcoin should be use as global measure for freelancing, is Bitcoin generally accepted in the US? Another question is that is Bitcoin generally accepted globally for this measure to be taken into consideration? I'm not sure if this are really going to happen soon but if for instance US start this measure, I'm pretty sure other people will follow the same pattern.

Another challenge I think that might really affect this standardization is Bitcoin volatility, there are many companies that don't want to receive Bitcoin as value because of this. There is benefits in this volatility but honestly the other way round wouldn't be palatable for many tech guys especially when you have much to pay with your income.

[DrBeer]

Nice to read a reasoned and intelligent response from the author of the topic ! And understanding of the mass of problems that can not be solved by bitcoin. On the other hand - realizing the problem is half of the solution

In addition to the above nuances and problems, I would name one more - the lack of mass recognition of bitcoin as a means of payment or legal tender in most countries of the world. What do I mean by that ? So far, unfortunately or fortunately (we can't realize it yet), the bitcoin received by an ordinary worker will have to be ... yes yes yes yes, you guessed it - converted into fiat, local currency that can be used to buy milk, bread, meat and other everyday goods. And there begins the issues of commissions, deductions, “affiliate fees”, in a word, the loss of some part of the received value.

[Smartvirus]

Nope. Not at all. Am a big fan of BTC myself, but its volatility is annoying as hell sometimes which is why its unbalanced nature cannot really be utilised to balance global salaries across the world in my opinion.

On the other hand, USDT could manage to do that since it's almost always stable in nature except for a few crazy hiccups here and there.

As annoying as it may seem, volatility is one of the many spectacular qualities of Bitcoin as we have it now. Bitcoin without volatility, I think many of us wouldn’t have been hodlers today and should we have a high predictability to it, a lot of people would have been about taking profit and investing these profit in some other gainful investments out there like real estates and acquiring properties.
I would agree with you that, it doesn’t get to balance off salaries as that wasn’t its purpose but, when it comes to ensuring free flow of business and by passing several protocols to get deals done, the roll of Bitcoin would be so much of a facilitator to this reality.

[fullhdpixel]

This idea may be difficult to implement because some people are used to using fiat currency as a way to receive their salary or make purchases. Some lay people would find it difficult to accept a salary paid in bitcoin. But if this idea was put forward to people who like bitcoin then perhaps they would rationally support it. We also hear that some places are now using bitcoin as a salary payment, although the scope is still relatively small. About bitcoin becoming more stable and powerful I doubt this can happen, but some people would probably accept the idea much more easily.

But for those of us in the forum, the price fluctuations are what make bitcoin the best choice and I doubt that when prices become more stable bitcoin will be one of the best choices for some. The idea will certainly be an innovation and it is possible that in the future it will be used as a step of choice.

I agree about your point but here I want to give some details as this idea can be implemented but in developed countries because they are having well organized system which is helping their peoples for having use of advance technology and also mostly now they are having debit/credit cards rarely peoples are using case, so this is good for them their legal tender is strong about bitcoin because they are understanding all things related to this and their governments are also bringing policies for the development and improvement of their peoples lives.

In rest of the world, it's not going to work because we are having peoples not well organized, and their system is also not helpful with too many countries are having restrictions with we have no time frame about having things settled, and we will be having some good change for the peoples and their system with I personally love to have this system, but it's not going to be implemented in our country even in next few years.

[Helena Yu]

Nope. Not at all. Am a big fan of BTC myself, but its volatility is annoying as hell sometimes which is why its unbalanced nature cannot really be utilised to balance global salaries across the world in my opinion.

On the other hand, USDT could manage to do that since it's almost always stable in nature except for a few crazy hiccups here and there.

You can always convert your Bitcoin or USDT to any currency you want, there's no problem at all. If there are employees that complain if they receive less in Bitcoin and propose to pay in USDT, the employers can just fire him and replace with the new one because there are many unemployed people out there.

With the high number of unbanked population in some countries, Bitcoin could be a good medium for providing accessible financial services. Some persons have to travel a long distance just to have access to banking facilities where their salaries have been deposited. Paying workers with Bitcoin can bridge this gap.

And it comes a problem where people in your countries don't accept Bitcoin, if you sell your Bitcoin in centralized exchange or P2P, it force you to use banks service to receive your fiat and then there's no difference whether you receive in Bitcoin or fiat.

[dezoel]

I believe that reaching to a full bitcoin world is literally impossible so these type of talks make no sense at all. What we should be considering instead is how much b2c could benefit from this, because online b2c world is major, it's incredibly big, look at amazon for example and that's just one website, sure the biggest one but still just one website, imagine every website like that, every ecommerce website, every place you can buy something, has crypto payment option, imagine how big that would be.

Instead of trying to balance the budget of everyone, we could just focus on b2c for crypto and suddenly we would actually have a greater result for sellers, because those sellers are not all from the same nation, and ecommerce is a global thing. This way you are opening every nation to every other nation and suddenly that could actually help with smaller nations to get a good amount of profit. We can finally see some hidden gems from other nations to grow.