Listen to this articlePalo Alto based startup Bitwage allows employers to take advantage of the efficiency and lower costs of their Bitcoin investments on a large scale to pay employees in Bitcoin. In the same time Bitwage provides faster and cheaper solution to pay international workers. Below is our recent interview with Jonathan Chester, Founder of Bitwage:
Q: Tell us your story and something more about Bitwage?
A: John Lindsay, our CEO, came up with the idea back in June of 2013. If you take a look at the financial circle in the bitcoin ecosystem, users (or employees) hold bitcoin and they send the bitcoin to merchants (or employers) for goods and services. The employer only has 3 things to do with these bitcoins: 1) Hold as investment 2) Convert Immediately to Fiat 3) Buy goods and services on a small scale. At no point do the Bitcoins flow back from the employers back to the employees. John saw this and said that we have to close the financial loop.
Back in June, John would pitch to his friends on this idea. Most people dismissed Bitcoin as “make believe” money at the time. Keep in mind that this was before the spike to $1000. In September, I was introduced to John through a mutual friend working at Oracle (John and I were working at Oracle at the time). He told me the idea and immediately said that we have got to make it happen. All of the sudden, we were working 80 hour weeks, working our day job at Oracle, coming home and working till we dropped dead on our beds. Many sleepless nights. In April, we realized that Bitwage was getting enough traction that we needed to go full time to make this thing take off. John went full time at the end of May, I went full time at the beginning of June. Since then, we launched our Alpha Product, serving employers on any payroll platform. Several customers have been running on our payroll system, including Coinsetter, Freshpay, and CoinReport.
Related: Startup Xapo – Credit Card Powered by Your Bitcoin Wallet
Q: How does it work? What are costs of using Bitcoin Payroll?
A: Our system works with any employer, for contractors and W2 employees. We sync into the back of any payroll system (meaning there is no need for any painful payroll service conversions). Our W2 system (which we call automated payrolls), it is a one-time easy setup. Once everything is set up, the employer never has to come onto our service again (unless they would like some information for tax filing and record keeping) and the Bitcoins just keep flowing. Easy. Fast. Simple.
Right now, we are currently in Alpha and offering our services for free.
Related: Coinbase – One Of Silicon Valley’s Biggest Potential Startups
Q: What are the biggest benefits of using Bitwage?
A: Ease of Use, Privacy and Security.
Our system is designed from head to toe for ease of use. Once an employer is signed up, we provide the easiest way to pay our a large number of employees, reliably, in bitcoin. The Bitwage solution turns public addresses provided by employees into names for easy point and click payments.
Privacy and Security are of utmost importance to us. Our system manages and securely stores employee public wallet addresses. We make sure to hide this information from employers. We do this for two reasons: 1) Employees may not want their employers and their payroll administrators to have access to all of their financial data such as how much money they have and what goods or services they are purchasing 2) We make sure that employers do not have to deal with managing employee public addresses. Many employers may not recognize that if a bad actor collects this information, an employees financials may be at risk. We ensure that employers do not have to deal with this additional stress just to offer Bitcoin Payroll.
Q: Do you have any new features in the pipeline?
A: We have some interesting new products in the pipeline. Although I can’t quite discuss what’s in store for the immediate future, keep your eyes peeled for a big press release coming up soon.
Related: Startup Bitcash Working Hard To Revolutionize The Checkout Lines At Every Store
Q: What are your plans for the future?
A: Our eyes are set on two things, International and Real-Time Payroll.
International payroll is a huge pain point for many companies contracting and employee international employees. There is no easy, cheap way to do this. Through Bitcoin and other next-generation payment protocols, we are looking to create the fastest and easiest way to pay your international employees.
Why do we get paid once every two weeks? Our current system for transferring money in the US (The ACH system) is slow and relatively expensive. Bitcoin solves a lot of the issues within the ACH system. What if you could get paid everyday? We are working on a solution that will allow employers and payroll companies to offer Real-Time Payroll.
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