According to one survey which was conducted by Humans.net, which is a job recruitment platform, about 29% of freelancers would instead get paid in crypto over legacy systems, as well as banks.
Would freelancers like to use crypto?
This survey, covering 1,100 U.S.-based freelancers, has disclosed that about 18% of the respondents would like to receive every single payment in crypto, while the other 11% would prefer to receive a portion of their payments utilizing digital assets.
The study’s respondents were randomly selected from the freelance market of the United States, and none of them disclosed any particular interest in the crypto space before the survey.
Usually, freelancers receive cross-border payments from their employers as most of them work for overseas companies.
Now, there is a limited number of alternative with which a freelancer can receive his or her compensation – remittance platforms such as Western Union, online fintech platforms like PayPal, as well as bank wire transfers.
TransferWise is still the most useful and effective payment system for freelancers as it clears banks wire transfers with some minimal transaction fees. However, TransferWise, which is a multi-billiondollar platform, can also be highly impractical in some countries that have strict capital controls. For example, South Korea does not permit TransferWise to clear more than $1,000 a day and $20,000 a year.
PayPal and Western Union charge high conversion fees
PayPal, as well as Western Union, charge some high conversion fees in the range of 5 to 10%. Therefore, if a freelancer is to receive $5,000 as monthly compensation from an employer, about $250 would be spent as a transaction fee.
In the United States, PayPal charges about 12.9% plus a flat $0.3 fee, but for some international users, the fee will increase substantially, which depends on the location.
Some of the major cryptocurrencies, such as Bitcoin or BTC and Ethereum or ETC, permit freelancers to receive some payments almost instantaneously, with some low fees, particularly with large payments too. On legacy systems, it will be quite easy to process some small payments. However, once when the size of the amount exceeds $10,000 documents are involved and a rigorous verification period is also required.
On the 17th of November, Binance, which is the largest crypto exchange in the world, sent about $600 million with a $7 fee. Hypothetically, while it is not going to be possible to send $600 million on PayPal if a user is to address that amount of the platform, there will be a five percent fee that is going to result in a 30 million fee, opposite to $7 on the BTC blockchain network.
Why is crypto not a good option from some aspects?
One component of cryptos which still remains weak is the merchant adoption. It is quite challenging to go out, as well as spend BTC at coffee shops, stores, and restaurants.
Being such, most of the individuals are going to have to cash out BTC to fiat in order to cover day-to-day expenses, as well as necessities such as rent, food, and utility bills.
In some regions such as South Korea, and Japan, where it is quite cheap, as well as fast to withdraw BTC from some exchanges to the bank accounts with a fee of less than $1, payments through cryptos can be quite practical.
But, on the other hand, in some nations such as India, where the exchanges do not have the ability to operate as a result of unclear regulatory frameworks, it can be quite challenging for freelancers to cash out to fiat.