Accepting Cryptocurency for Contract Payments
One of BlockTrades' primary businesses is software development services for other cryptocurrency companies. Naturally, these companies generally prefer to pay us in cryptocurrency instead of USD dollars, but we have to pay our sub-contractors in USD dollars, so figuring out how to price a contract in crypto has often been a headache for us for several reasons: 1) our customers don't always want to pay us in the same cryptocurrency (even the same customer sometimes wants to change what crypto they pay in), 2) the price of the cryptocurrency can fluctuate a lot against the dollar and this becomes a point of potential contention as to what exchange rate should be used, and 3) converting the crypto to dollars to pay our sub-contractors costs time and money.
To alleviate these problems, we've created our own “dollar-stable” IOU on the BitShares distributed exchange (DEX). BlockTrades' customers can purchase TRADE.USDLABOR from our site at https://blocktrades.us and use it to pay down any USD-denominated debts to BlockTrades.
Our site dynamically computes the cost of TRADE.USDLABOR versus any cryptocurrency we accept as an alternative payment for USD-priced contracts. We use pricing and liquidity information from the same exchanges that we normally use to price cryptocurrency. We peg TRADE.USDLABOR against USD Tether and add a percentage fee to account for our conversion and bank wire costs. This allows a customer to purchase TRADE.USDLABOR whenever there's a favorable rate for their crypto of choice, and then later pay us the TRADE.USDLABOR on the contract payment date, allowing them to hedge their exchange rate risk if they want.
Dollar-hedging with TRADE.USDLABOR
In fact, we also allow customers to buy cryptocurrency with TRADE.USDLABOR (here we price using approximately a 1-1 match with USD Tether as we don't have any conversion costs). So it's possible for any of our customers to use TRADE.USDLABOR as a dollar-stable coin, regardless of whether they plan to purchase service work from us. Anyone can buy TRADE.USDLABOR from us or on the BitShares DEX, then later sell it back to us at our site or sell it to a 3rd party on the DEX.
More to come soon...
It's true that we originally created TRADE.USDLABOR as a means of pricing and accepting cryptocurrency for contract payments, but as shown above, we've already found other uses our customers can make of it, such as dollar-hedging. We recently found another great use for it, but I'll talk about that in a separate post on fast conversions for Bitcoin payments.
why did you not go with bitusd?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
This sounds great. It makes sense to have a stable currency that you can use for these transactions, and no doubt you will find more uses for it in the coming weeks and months. As one of Blocktrades' happy and frequent customers, I hope it works out well!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Same question as Henzemi, however I'm not salty about it, I'm merely curious :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
There's actually another reason as well, but I'll reveal that in my next post. Got to end on a cliffhanger...
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit