Imagine a world without borders, where you can travel, explore and live everywhere, where the whole world becomes your home and the journey and adventures never stop. This is not a dream anymore, as more and more people around the world are travelling from one place to another while working remotely as digital nomads.
Now, imagine a world where money knows no borders, currencies don’t matter and you don’t have to pay fees for transactions, transfers or exchange. A world where you can get paid and spend money easily wherever you are.
Wouldn’t that make the life of a digital nomad easier? And wouldn’t more people be able to become digital nomads and ditch the 9 to 5 lifestyle?
The answer is “definitely YES”; and the good news is that this global monetary solution exists in the form of cryptocurrencies.
If you don’t know anything about cryptocurrencies except for hearing the word Bitcoin every now and then, it’s ok. Cryptocurrencies are not yet a common payment method, however, it’s becoming more and more popular. It is estimated that around 5 million unique users worldwide have a digital wallet with a form of digital currency in it.
We will not get into super technical, boring details. Instead, we will focus on what you, as a digital nomad or a digital nomad wannabe, need to know through these 3 questions:
- What are cryptocurrencies?
- How can I, a digital nomad, use Cryptocurrency?
- What are the pros and cons of getting paid in Cryptocurrency?
What are cryptocurrencies?
Cryptocurrencies are digital or virtual currencies where transactions are verified by cryptography, a secure method of exchanging data. Transactions in cryptocurrencies are not controlled by any individuals or governments as opposed to actual (fiat) currencies.
Cryptocurrencies were developed to achieve independence from third party control, like governments and banks, thus they are considered global currencies.
There are many forms and types and names for Cryptocurrencies, the most famous of which is the Bitcoin. You can exchange the bitcoin for money, goods or services and you can trade in it like stocks on an exchange.
Other types of cryptocurrency include Bitcoin cash, Ethereum, Litecoin and Ripple. Each has different specs, uses and target audience. However, they all fall under the same umbrella of cryptocurrencies.
How can I, as a digital nomad or a digital nomad wannabe, use cryptocurrency?
You can use Cryptocurrencies to support your nomad lifestyle in 2 ways. Either do the usual remote jobs and ask to get paid in Cryptocurrencies, which more and more companies are open to offer; or trade in Cryptocurrency and use your profits to fund your travel.
If you decide to go with option 1, you will need to research companies that accept paying in crypto. You will need to have a digital wallet that accepts the type of cryptocurrency your employer pays.
You can sell the cryptocurrency and exchange it for money or you can actually use it to pay directly using a mobile crypto wallet.
If you choose option 2, you can be a digital nomad who doesn’t need a job at all. It’s similar to stock investment, you need to set up an account on a crypto trading platform then monitor the rates, when it’s low you buy, when it’s high you sell.
You can also make money by lending cryptocurrencies or simply being a crypto-marketer, writing blogposts and marketing cryptocurrencies as a crypto nomad.
What are the pros and cons of getting paid in Cryptocurrency?
As any other type of investment, Cryptocurrency involves a certain level of risk. However, for nomads who already accepted instability and decentralization as a lifestyle, Cryptocurrency might fit right into their values, and even make life easier for them in many instances. Here are the pros and cons of cryptocurrency for digital nomads.
- It’s a borderless currency: While travelling, opening a bank account is not an easy job if you are not a long-term resident. Banks request many papers, bills and maybe even a local job contract before you open the account, which is an impossible scenario for a digital nomad. With cryptocurrency, you skip the bank all together, your transactions have no borders nor middlemen.
- Lower fees: With crypto there are no/minimal currency exchange or transaction fees to worry about. It will no longer matter where your employer is, or where your digital nomad adventure is taking you. Your digital wallet is all you need to get paid and you will save all the fees that a normal bank transaction would entail.
- You are investing effortlessly: The cryptocurrency you earn can make you some extra profit if the currency you use increases in value.
- Privacy: When you get paid or pay in cryptocurrency, minimal personal information is required thus it is less likely for your data or identity to be stolen.
- You don’t have to work: If you choose to support your nomad life with trading in cryptocurrency you can travel without looking for work. All you need to do is monitor the market, buy and sell, but you never have to look for a job or have an employer!
- It’s the future: while there are many uncertainties surrounding digital currencies, it is for a fact that it will have some influence on how the monetary system functions in the near future. Some experts even argue that regular currencies have the same uncertainties as banks are printing them without cover. This can make dealing with cryptocurrency investing in the future. It takes away the power of governments and banks over money and it’s open and transparent to all.
- It is a way to market yourself: Being a freelancer or a remote worker who accepts digital currency can mean that you are up to date with market trends. It can be used to market you as someone who adapts to technology and thus an attractive applicant to tech and international firms.
- It’s volatile: The value of cryptocurrencies is ever changing, as of December 2020 the Bitcoin is at ~$22,000 just a month ago it was at ~$14,000. This can work for you or against you depending on when you choose to buy and sell. You also have to choose a site that does immediate transactions, otherwise the value may fall while you are waiting for the transaction to happen leading to more losses.
- Getting started takes a while: Although recently there was a great improvement due to increasing demand, the process to start a crypto wallet and start using cryptocurrency takes a bit of time and research. You need to find the one that works for you.
- Taxes can be complicated: Cryptocurrency is still illegal in some countries. In others like the U.S. it is considered a property, thus filing taxes can be complicated. Also, in many cases, you can’t pay your taxes in cryptocurrencies, thus make sure you check how taxes are calculated in your case.
- The range of currencies: As we mentioned before, Cryptocurrency has many types and forms, therefore you may face a situation where the type you accept is not compatible with what your employer offers. Currently, the majority of businesses who use cryptocurrencies use Bitcoin or Bitcoin Cash, while a small number uses Ethereum and Litecoin.
- You can get hacked: You are not protected against hacking. In the case that your wallet gets hacked you can lose everything. Even the best tech experts like Steve Wozniak, the co-founder of Apple, was robbed off 7 bitcoins in 2019.
Do you have Bitcoins? Are you thinking of investing in Cryptocurrencies?