sats/min: Salary of the Future

Income as a stream

If you're like most people, you've probably never wondered why so many jobs pay every two weeks. Why two weeks? Why not every day? There are dozens of ways of sending money to people instantly, including Bitcoin, so what gives? There are myriad reasons, but crux is that adults are slow to change when there's not a strong reason to. Consider working from home. It took a global pandemic and massive lock downs to drag society into the 21st century where working at home is viable.

If a business tried to pay every day instead of every two weeks using the existing systems of cheques and direct deposits, it would mean printing cheques every day, batching up the direct deposits, doing the accounting, massively increasing the amount of work the bank has to do processing transactions, and so on. There's just too much manual labor and friction. But with the rise of Bitcoin and specifically the Lightning Network, the end is nigh for these archaic delays. There's no good technical reason you can't get paid every day, every hour, or every minute, and kids growing up now, especially those involved in Bitcoin, will think of money more as a flow rate, as a stream, more than a bi-monthly batch.

Thinking of money in terms of flows will happen from multiple angles. Businesses will get used to taking in minute-to-minute streams of value and workers will get used to being paid and spending as a stream.

Businesses

Bitcoin and Lightning enable micropayments because it’s trivial to send tiny bits of value to anyone in the world nearly instantly and for practically zero cost. This is very different from from Visa and PayPal because they both have 3%+ and fixed merchant fees and take days to settle. Near-chain transactions like Lightning are secured by the Bitcoin network but don't require on-chain fees for every transaction. When you send value with Lightning, it happens in seconds and can be considered settled for all intents and purposes.

Micropayments is a profound concept because it enables entirely new business models. Consider news websites that want you to subscribe for $5/month. They're used to thinking this way because that's how you used to subscribe to the physical, printed newspaper. I'll never subscribe to a news paper for a monthly subscription, but I might pay $0.10 to read an article. Why isn't this option available? Because it'll all get eaten up by fixed merchant fees. But such a payment model is possible with Lightning. Consider podcasts. With Podcasting 2.0 I can listen to a podcast and stream 10 sats/min while I listen. This is $0.003 for those of you not used to thinking in sats yet.

Workers

Let's look at some hip, Bitcoin sites with job listings. First up is Stacker News: Jobs. This site is at the bleeding edge of new and you can already see job listings paying in sats/min:

Correction: Actually this isn’t what they’re offering as pay to employees. It’s what they’re paying SN to promote the listing. This makes sense because 1 sat/min is pretty low! Damn. Well, while it’s not an example of a job listing in sats/min, it still shows people are willing and able to pay and receive money in sats/min.

There are more sites that haven't quite made the leap to sats/min but do pay in sats:

• Sphinx Chat — encrypted chat over the lightning network, podcasting 2.0, stream sats to anyone, get paid to share content

• Stakwork — think Mechanical Turk but paid in sats

This is the way of the future for knowledge workers. You do the job -- write the code, move some data around, perform some technical task -- and the money streams to your pseudonymous account. There's no bank or government watching over your paycheck. It's just transactions on the bitcoin blockchain. If your government wants to spy on you or take your property, they'll have to earn it. To ad lib from The Sovereign Individual: As the cost to take people's property increases, governments have to treat people more like customers and less like tax cows.

If you invest in yourself and acquire skills and knowledge, you can connect with anyone in the world who has work for you and get paid. The future is global. The future is permission-less. The future has no borders. The future is Bitcoin.

Roadblocks in the way

This is all assuming our boomer government doesn't kill the innovation entirely with onerous laws and taxes. For example, in the United States, every time you receive bitcoin, you need to account for it in your taxes by:

• recording the time of each transaction

• recording the bitcoin price at the time of each transaction

• when you sell, see how long you held the bitcoin to decide if it should be short or long term capital gains

• take the difference between price when you got it vs price when you sold for gains

If you run a podcast and received hundreds of thousands of micro-transactions and you follow all the rules, your tax return should be tens of thousands of pages, easily. Maybe you could bend the rules and roll up transactions every day, but there’s a lot of price volatility and what if the IRS decides it hates you and dings you on all this stuff during an audit?

What makes this even more absurd is that Bitcoin is accepted as a currency in several areas and is the national currency for two countries. If you live in one of those countries and you send me money (i.e. bitcoin), I have to pay capital gains on that when I get rid of it. This is why people move to places like Puerto Rico which have no capital gains tax, and this is how the United States can send an extremely strong signal to innovate and build the future anywhere but here.

This is why bills like The Cryptocurrency Tax Fairness Act (H. R. 3708) are so important. I haven't read the whole thing, and assuming there's no hidden trickery in the bill, it's great because any transaction under $600 wouldn't need to be reported to the IRS. This opens up micro-transactions and "bitcoin for a coffee" use cases and is sure to make my tax return several hundred pages shorter.

This is Just the Beginning

Bitcoin adoption is still way, way far off from mainstream. Profound ideas can only propagate through human minds so fast. But kids have grown up in a world of instant information. They're not bogged down in the old ways of thinking and once they find out money isn't instant, that they can't trade stocks after 5pm EST, that they'll lose 3.5% in fees if they start a business and take PayPal or Visa (assuming they even give permission for the transfer), that they work for 10 days before getting paid, etc. they're going to look for something better. And Bitcoin will be waiting for them.