It was early February when Bryan, a 28-year-old line cook in Wisconsin, received an exciting promotional email from Coinbase. “Get paid in crypto with zero fees,” the cryptocurrency exchange declared. “You can set up direct deposit in just a few steps without leaving the Coinbase app.” Bryan, who already used Coinbase regularly, happily obliged.
Five months later, however, he wished he hadn’t. “I’ve had to take on extra shifts to recoup my losses,” he says. “If we’re really in for the crypto winter, I don’t know how long I’ll last.”
In recent years, countless others have been influenced by the ringing endorsements for getting paid in crypto from pro athletes and celebrities like Tom Brady and Aaron Rodgers, as well as by the exchange’s own claims of being the “future of payroll.” And it’s clear just from personal testimonies in online cryptocurrency communities that Bryan isn’t the only one who regrets allocating most, if not all, of his paycheck to crypto.
Even before the paycheck push, crypto exchange platforms like Coinbase and Crypto.com have spent the last few years marketing decentralized digital currencies as a surefire ticket to financial success. This particularly appealed to Bryan, whose annual salary as a line cook for a small bar in a small town in Wisconsin is around $25,000. “At the time, most of my savings and a small 401K I had from a previous office job had gone into my crypto portfolio,” he tells me.
So not only did Bryan see Coinbase’s direct deposit program as a way to invest on a regular schedule rather than trying to time the market, but it also allowed him to invest without losing money to the platform’s transaction fees. Since he provided Coinbase direct access to his employee payment portal, around $300 of his bi-weekly paycheck gets diverted away from his checking account and converted into crypto. “Bro, $75 of the $600 I was spending every month went to fees before, so making that $600 automatically come from my paycheck seemed like the smart thing to do,” he explains.
Unlike Bryan, Kai Morris, a “blockchain ethicist” who works as a freelance writer and researcher in the blockchain industry, has been paid exclusively in cryptocurrency for the past several years. “As somebody who works directly in the crypto field, I have found many clients appreciate the option to pay in crypto as it saves them time, and also shows them that I take this industry seriously,” Morris says. “So if I’m working with a new company that has its own coin or token, I choose to accept partial payment in that currency as a sign of respect.”
But for all the good graces and employment advantages that being paid in cryptocurrency provides, Morris describes a “number of drawbacks and challenges” that undercut his overall financial stability and wellbeing, including the process itself. “Although I’m paid in crypto, I will typically convert my paychecks into fiat so that I can readily pay bills, buy food, etc.,” he says. “When I was starting out in my career, I’d occasionally be paid in either Bitcoin or Ethereum, although that stopped around 2020 when gas fees became too high.”
That is to say, similar to Bryan, Morris’ paychecks were being burned on the costs that accrue when buying, selling, depositing, withdrawing, sending or receiving certain cryptocurrencies. To avoid this, Morris opted to receive payments in cryptocurrencies that are arguably less established, albeit with lower transaction fees.
Deric, a 30-year-old software engineer in Belgrade, also describes the daunting process of getting paid in crypto. “Usually I get around 30 to 50 percent of my paycheck in Bitcoin,” he says. “Bitcoin is easy and fast to transfer money overseas, and that’s how I send money to my parents in Brazil.” However, things get complicated when it comes to paying for things himself. “I can pay only for my nutritionist and therapist with Bitcoin at the moment, but I pay for my Netflix, Spotify, Steam and Amazon products by buying gift cards with crypto then using these services normally,” he explains. “I would love to pay my rent in crypto, but my landlord isn’t open to that.”
Morris says his girlfriend has expressed her concerns about the stress caused by moving money from crypto to fiat. And while he tells me that it’s not as tough as it used to be, he admits that “there are occasionally still times when a crypto-to-fiat exchange holds my money, or my bank flags my financial activity for being ‘suspicious.’” Either situation causes “serious cash flow issues, the likes of which I always need to be ready and prepared for.”
Even when his paychecks aren’t held up or flagged by financial institutions, Morris’ income can still be rendered completely worthless by the volatile crypto market. Most notably, in June, Bitcoin’s value fell 70 percent from its November all-time high and one of the pillars of the crypto ecosystem, an “algorithmic stablecoin” backed one-to-one with the U.S. dollar, completely collapsed. In all, the crypto market lost $2 trillion in value.
“Many cryptocurrencies fluctuate in price very quickly so I must convert it to a stablecoin or to fiat money as soon as possible so that I don’t incur any losses,” Morris explains. This, however, became a particularly dicey endeavor when the market crashed. “I agreed to be paid by one company using the token they had developed, and I vividly remember rushing to trade it for a more established stablecoin or fiat once I received it,” he says. “But my transaction got stuck, indefinitely. I had to watch my wages deplete, and there was nothing I could really do to salvage it.”
Aside from suffering critical financial losses, Morris says working in the blockchain sector has gotten much more difficult since June’s market downturn. “More companies have had to tighten their belts, meaning that negotiating rates, let alone getting hired at all, is much harder,” he tells me. “Luckily, I saved my money during the bull market so I don’t have to worry too much, and now I’m accepting payment mostly in USDC, a one-to-one U.S. dollar-backed stablecoin running on the TRON network, as it has very low fees.”
As for Bryan, if there’s any silver lining, it’s that he didn’t dedicate his entire paycheck to cryptocurrency. “About half my income for the last four months is worth 30 percent of what it should be,” he says. “It’s obviously my fault. I thought I was making the right moves, but I should’ve just put my money in a goddamn savings account.”
Recently, Bryan deleted all of the crypto-centric apps from his phone, disconnected them from his paychecks and has “buried my head in the sand until this all blows over and the market bounces back,” he says. In the meantime, he’s completely crestfallen, his ship seemingly as far from coming in as ever before.
“The way the market was going, I’d hoped that after a year of investing, my bag would’ve been big enough to buy a car, and maybe even eventually move to my own apartment in Milwaukee,” he laments. “Anything would have been a step up from wasting away making next to nothing in this sundown town in the middle of nowhere.”