by Erik Chelstad, CTO of Observa
We’ve decided to give our Observers the option of getting paid in cryptocurrencies as well as traditional money. This means the much talked about world of Bitcoins and blockchains is open to anyone getting paid through the Observa Platform. I want to go over our reasons for doing this and what it means, but first give a brief description of what cryptocurrency is.
What is Cryptocurrency?
At their heart, cryptocurrencies are simply a way of electronically representing something of value in a way that proof of ownership can easily be validated. What is considered something of value is up for debate (not one we’re going to have here), but it could be shares in a company, computational power, or gold coins. Cryptocurrencies are easy to move around because their ownership (my ability to give them to you) is proven by math done on a group of distributed computers––not a single source like a bank or clearing house. If you want to dive into the technological, political, and economic world of cryptocurrencies, I’d suggest just starting with your favorite search engine and following the trail from quality academia and journalism into, if your heart so desires, the world of hucksters and conspiracy theorists.
Why is Observa Using Coinbase?
There are a few reasons we decided to use Coinbase to send our cryptocurrency payments to Observers:
- Ease of use: Just like our PayPal transactions, we only need an e-mail to get out payments. Unless Observers choose to share more information about themselves, this is all we want. No messing around with 256-digit wallet addresses or anything else complicated. Coinbase also offers the standard Coinbase experience or the more technical GDAX exchange for power users.
- Taxation and legality: Coinbase handles the legal side of the payments, ensuring there is no money laundering or tax evasion.
- Choices: Coinbase has four of the major cryptocurrencies as options, so Observers can choose from Bitcoin, Bitcoin Cash, Ethereum, or Litecoin. As Coinbase adds support for more currencies, so will we.
- Trust: Coinbase is backed by serious, legitimate investors and is used by millions.
- Reliability: The uptime on Coinbase has been impressive, and its technical integration works very well.
Yes, we take Observa and the data it collects very seriously, but we want Observers to be able to have fun too. If you’re only doing one observation a year and want $5 in Bitcoin, why shouldn’t you be able to? Is a cryptocurrency a legitimate investment or just a high-risk gamble? That’s not for us to answer, but there really aren’t many places for the average person to make cryptocurrency without exchanging cash, so we have created a new one.
Lower Fees and No Payment Threshold
Cryptocurrencies require almost negligible fees to pass payment from Observa to Observers, or from us to you. This means that we will not need to have a payment threshold for payments in cryptocurrencies. As we offer more types of opportunities, some will take less time to complete and will pay out less. Imagine us asking you to take a picture of car or look at an image of a shelf and validate whether a can of soup is present in the picture. We might pay $0.50 for such a thing, and the threshold for payment via PayPal will be $4.00, whereas payment via Coinbase will show up immediately.
Morals and Ethics
If the low processing fees of cryptocurrencies were applied to the retail industry, what would happen? Let’s say that the average purchase at a local grocery store is $25. Credit card transactions amount to around $0.70. Cryptocurrency fees would be around $0.19, a savings of 73%. Given that the average profit margin for a retail store is 4%, total adoption of cryptocurrencies could increase the profit margin to 6%; that’s the difference between shutting the doors and expanding in many cases. Of course, the same could be done by accepting cash only or by offsetting credit card fees with a charge. We’ve all seen businesses that are doing this, even though it can harm their customer relations.
Is cryptocurrency anonymous, allowing criminals to send money around the world without detection? No, it’s not. It might be harder to track than the subpoenaed credit card information of a thief on a spending spree, but law enforcement has learned a lot since the days of Silk Road, when it had to fake the deaths of suburban grandfathers to catch miscreants (https://www.wired.com/2013/11/silk-road/). Even when the good guys become bad, like by stealing the very Bitcoins confiscated in the Silk Road operation, they are apprehended quickly and efficiently (https://motherboard.vice.com/en_us/article/8q845p/dea-agent-who-faked-a-murder-and-took-bitcoins-from-silk-road-explains-himself).
We know that not everyone will want to get payments in cryptocurrencies, but we are proud to offer it as an option for any reason Observers choose.
To change your payment method, just visit your preference page here.