How to protect yourself when accepting bitcoin for a service

accepting bitcoin

As a small business owner or freelancer, you might have found it difficult to assess whether a service provider will pay for your work. You may have begun to hesitate when accepting cryptocurrency in exchange for your services since a greater opportunity for disappearing clients may exist. Fortunately, there is a better solution. Bitcoin escrow on cryptoexchange.com can help users protect themselves when accepting bitcoin for a service.

Know who you’re working for

As a contractor, it might have been a while since the last time you received work, but that doesn’t mean you should accept the first offer for your services. A client may not provide personal information, which is even easier to do with an anonymous payment like bitcoin. You must trust your gut to avoid dishonest clients who may not ever send bitcoin or cause other problems. While your form of payment might be anonymous, that doesn’t have to mean your whole interaction is.

A little bit of research on the company or the client themselves through LinkedIn or by asking previous contractors or employees can ensure that the project is worth your undertaking from the beginning.

Ensure the client signs a contract

Especially for long-term engagements with a client, creating a legally binding document will serve as protection. The document will help to enforce that both parties will do what they verbally agreed to do. The contract may state the length of the engagement, the completed tasks, and the payment date. Without this contract, your services may go unpaid since there is no proof that you or the client made any agreement on the matter.

If a client doesn’t send bitcoin to your address, you can easily reference the signed documentation. Perhaps, on follow-up, you might learn the payment is on its way. The mempool (where valid transactions wait for confirmation) might just be holding onto your payment a little longer.

When contractors should use escrow services

Some freelancers have attempted to protect themselves through upfront billing Asking for a portion or full payment before starting the payment may work for some clients. However, others may be skeptical that you might take the payment and disappear. In this case, for short and long-term projects, an escrow account can be another way contractors can protect themselves without charging upfront.

Users typically engage escrow service providers for transactions that involve the transfer of a large number of funds and several obligations to be met. An escrow agreement refers to the contract that outlines conditions of the transaction for something of value – such as an employee’s work. These make for the perfect scenario for exchanging bitcoin for contract work. An example might be a freelance contractor helping to pay a home or web designer tasked with building a complex website.

The contract agreed upon between the two parties may resemble any other employment contract. However, before an employee begins working on a lengthy project, the client must deposit their funds into the escrow service account. The escrow account will act as an intermediary. As the middleman, the platform will ensure that the funds agreed to by the contractor do exist. Since they hold the funds, the escrow provider can ensure the Seller receives funds in agreement with the contract. As soon as the contractor completes the work specified in the agreement, the escrow service provider will release funds to their account. In the case that a disagreement arises, the escrow provider will help to facilitate the dispute. This way, contractors can rest assured that they will receive payment for their work in the bitcoin amount specified.

A recommendation for service providers

It’s true as a freelancer or contractor, you may not have sufficient resources to completely protect yourself on the financial front. However, engaging with trusted clients and using escrow services can be a cost-effective way to keep your services profitable. Escrow services charge low fees, which the platform calculates in proportion to the total size of the payment. When compared to the mitigation of risk, service providers view these variable costs as worthwhile. Although, we hope you never run into any issues in the first place.