I attempt to offer clients a wide range of payment methods when they work with me as a means of giving them as much freedom as possible, but this does come with its pitfalls. One of the best and yet riskiest decisions I ever made was offering clients the ability to pay for work via Bitcoins.
Bitcoin does not have a stable price, and it may never have one. That was the first fact that I had to come to terms with. In practice it means that when a client pays for work they will underpay at some times and overpay at others. I can remember one moment in particular where a client paid for a document which I had priced at £85.00, they chose to pay via Bitcoin but when their payment came through the price of the currency had dropped so all I made was around £78.00. Did that bother me? Initially, yes. But later I learned that if I was going to allow Bitcoin payments I had to accept that it is a necessary evil.
Do not punish your clients for the market
My knee-jerk reaction to only receiving £78.00 was to call the client up and ask for the rest of the cash. I am thankful that I never did this, if I wanted to allow Bitcoins as a payment option then I should have already envisaged that this would happen. The absolute worst thing I could have done was ask the client for more money because the fact of the matter is that they did pay the full price at the time. The Bitcoins just took too long to arrive, and during the time of arrival the price had dropped.
The experience as a whole was almost enough to put me off Bitcoin entirely (or at least accepting it as payment) but then I started to rationalise my thoughts. I honestly believed, and still do, that Bitcoin is the future of trading and buying online. I believe in the technology. So why would I shy away from accepting it as a payment option?
A double-edged sword
After my incident of gaining only £78.00 for my work, I felt scarred and disillusioned, but then it hit me: 'if the price can go down it can also go up!'. And that is what happened. I left the £78.00 in my Bitcoin wallet and within the next few weeks it had gained value. I cashed it out into GBP when it was worth £95.00! My somewhat bitter reaction had completely subsided and was replaced by elation.
A disclaimer which every client should be given
For anybody who wants to accept Bitcoin payments (or payments via any other cryptocurrency), there is one thing that you 100% need to do, and that is to tell your clients that they cannot ask for more if the price rises after they have paid. This is a problem that I have run into numerous times with Bitcoin. Here is an example of what the problem looks like:
Monday: Client pays £100 in Bitcoin for an article up front (so I haven't completed the piece yet)
Tuesday: The price of Bitcoin has risen, meaning that the £100 is now worth £120
Wednesday: I complete the article and hand it to the client. The client sees the price of Bitcoin is up and demand that I do additional work for them because they believe they have been overcharged.
It's a hard topic to broach, which is why it needs to be discussed prior to any work being started. There are a few things you can do in this situation.
1. Tell the client that you have already cashed out their Bitcoins into a fiat currency (e.g. GBP, USD, etc.) therefore meaning that you have not gained any additional money from them. I only say this if I actually have cashed out (for the purposes of honesty). I have found clients to be reasonably understanding over this.
2. Inform the client of the risks of trading in Bitcoin (and other cryptocurrencies). If they know and fully understand that there is a possibility of their money rising after handing it to me they seem less concerned in the future. I usually tell them something along these lines: 'Please understand that we are both taking a risk here. The money you hand me may end up doubling in the next few days or halving. I will never ask for more if the value of Bitcoin lowers and I never intend to offer more work if the value of Bitcoin rises' (I am usually not so forthcoming with the message).
To any freelancers out there considering Bitcoin or any other cryptocurrencies as a payment method, I advise that you only do it if you have the stomach for sometimes making less than you expect to make (and sometimes making significantly more).