How to Price a Project In Bitcoin
Illustration by Esteban Valdez
You’re interested in using Bitcoin to pay for a project, but you’r not sure where to start.
It’s a lot easier than you think and we’ll show you how.
The two ways to use Bitcoin
From our experience, we’ve found (for the time being) two ways to interact with Bitcoin. You can use it either as a payment platform or as the medium of exchange.
As a payment platform
You treat Bitcoin similar to PayPal, Venmo, Cash App or any other payment platform to send funds.
In fact, it’s much simpler, faster, private, more secure and accessible than the payment platforms mentioned above.
All you and the party you’re doing business with need are Bitcoin wallets.
From there, once you’ve received your invoice, you simply send your coins to the specified wallet address (make sure you verify), set your transaction fee, send it and your done.
The receiving party will get the funds — depending on your transaction fee within minutes or seconds if you’re using the Lightning Network — and then it will be up to the receiving party as to whether they want to exchange it for fiat currency or hold it as Bitcoin.
As a medium of exchange
Now this is where it gets interesting…
Instead of doing the above where you have the set price in fiat then use Bitcoin as the payment platform, you set the price of goods and services in Bitcoin and you settle the payment in Bitcoin.
How to set the price in Bitcoin
Finding the price point is rather simple; you take the fiat price of the good or service you’re looking to obtain and divide it by the price of Bitcoin.
For example:
If a 45 second commercial costs 50,000 USD, you divide the fiat price by the price of Bitcoin (which at the time of writing is 36,302.41 USD), the price in Bitcoin comes to 1.37731903 BTC, or round it up to1.4 BTC to include transaction fees and make the accounting a lot simpler.
Now you have a rough estimate of what it will cost in terms of Bitcoin.
Step 1 - Negotiate the Exchange Rate
You and the party you are doing business with should come to a fair and reasonable exchange rate.
An example would be both parties agree that a 36,000 USD price point (302.41 USD below market) for Bitcoin is a fair exchange rate, it would be reflected in agreement as such.
Step 2 - Lock in the rate
In the event the project costs 50,000 USD, with a 36,000 USD per Bitcoin exchange rate, the agreed upon price for the goods or services would be 1.4 BTC.
Now, in order for this to work the price of goods and services on the side of the merchant/service provider would also need to be priced in Bitcoin rather than fiat, and some of the contractors, vendors, freelancers and other merchants involved would accept the Bitcoin rate as well.
Pricing the goods and services in Bitcoin locks in the rate and removes volatility.
Step 3 - Pay in Bitcoin
Paying with Bitcoin is as simple as sending a text.
You’ll receive an invoice which contains a QR code and a Bitcoin wallet address.
Scan, pay and done.
The benefits of using Bitcoin
Let’s look at the pros and cons of using Bitcoin as the medium of exchange and see if it makes sense to do so.
Remember, we’ve set the price in Bitcoin and not fiat.
The pros
If you got in early and you’ve seen massive price appreciation and want to use your Bitcoin; now you can.
When you price something in Bitcoin you’ve removed the volatility as what you’re transacting in is the currency itself.
You can transact with Bitcoin anywhere, anytime, with anyone in the world fast, securely and privately and knowing that there is cash finality in minutes not days, weeks or months.
If you’re transacting with the Lightning Network, you can send and settle payments in seconds.
If you didn’t get in early and want to get into the Bitcoin ecosystem, 50% or 80% price drops are a great way to get Bitcoin on sale.
The cons
Funds are immutable, meaning once sent there’s no reversing the transaction.
You accidentally send it to the wrong address, it could be gone forever.
You are fully responsible for your coins; there is no customer service or 1-800 to call if something goes wrong.
Finding places to use Bitcoin directly are few, but not far between as the numbers of merchants and retailers are growing.
Creating a Win-Win transaction
For the producer, accepting Bitcoin as payment is a way of getting a renewed sense of value to the goods and services they provide.
For the customer, you’re looking for value and it causes you to seek out those businesses who you believe will do their best to provide you with quality goods and services that you’re paying for.
Why use Bitcoin?
What gives something value isn’t the fiat price, rather, what we believe the value that something should be.
Yes, hodlin’ is a great way to save, no one is arguing against that, but in addition to being saved, as bitcoin gets used more and more the value of a bitcoin grows more and more over time.
There will ever only be 21 million bitcoin (or 2,100,000,000,000,000 satoshis) and those who transact with Bitcoin realize it and have the tend to be more mindful of where they put there money; businesses know this and need to compete to earn it.
Plus, as an early adopter of this emerging asset; you automatically get cool-kids points for doing it.
In conclusion
It’s a radical idea, probably ahead of its time… or is it?
We live in the digital age, connected globally through the internet; it only makes sense for us to conduct business in a manner that reflects the times we live in and to bring the concept of fair and true value to what we do.
If anything, hopefully this article got you to see the potential.
But before you go…
Get 12% off when you pay in Bitcoin!
To celebrate our 12th anniversary and for a limited time we’re offering a 12% discount on projects that are paid for in Bitcoin.
Contact us to learn more.