Accepting Crypto: A Guide for Freelancers & Small Biz

Disclaimer: Cryptocurrencies are risk assets and investing in them is highly speculative. This article is not a recommendation by LibertyLancer or the writer to invest in cryptocurrencies or other cryptoassets, nor does it constitute financial advice.

As a freelancer or small business, accepting Bitcoin and other cryptocurrencies can be an excellent way to expand your client base, increase your revenue streams, and even save big on transfer fees. With the increasing popularity of cryptocurrencies, it’s becoming more and more common for clients to request to pay with Bitcoin or other digital currencies.

We’ll cover everything from choosing the right wallet to setting it up and getting the word out, so you can start accepting cryptocurrency payments with ease.

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Important: Pseudonymous, Not Anonymous

Before beginning, it’s important to note that many cryptocurrencies are pseudonymous, not anonymous. This means that your transactions are publicly linked to your crypto address, although not to your real identity. People can simply enter an address into a so-called blockchain explorer and get a breakdown of all wallet activity.

This is fine for regular usage where nobody knows who’s behind the wallet. However, if you’re accepting client payments, you probably don’t want them to see all your incoming and outgoing transfers.

Fortunately, you can simply set up a different address for every client you work with. Most of the hardware and software wallets I’ve discussed allow you to label or name each address so you can easily keep track of who they’re linked to.

However, not all crypto exchanges support the creation of new addresses, which can be a potential privacy concern. If transactions privacy is a worry of yours, it’s worth considering the self-custody options we outlined below.

If you want full privacy, you need to use a fully anonymous blockchain like Monero (XMR).

Receive Crypto Payments Straight to Your Bank Account

If you don’t want to deal with handling crypto yourself, but still want to offer crypto payments to your clients, you have some options.

The two most popular services for this are Coinbase Commerce and BitPay. You can use them to easily generate invoices with crypto integration.

Both of these services give you the option to manually take control of your crypto after payment. However, you can also choose auto-conversions so the crypto immediately gets paid out as a fiat currency (USD, EUR, etc.) to your bank account.

The downside is that the companies take a small fee from each payment, but compared to many other traditional payment providers, they’re actually quite reasonable (1-2% at the time of writing).

Choosing a Cryptocurrency Wallet (Self-Custody)

The first step to accepting Bitcoin and other cryptocurrencies as a freelancer is to set up your own digital wallet. A cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currency like Bitcoin, ETH, USDT, and other cryptocurrencies and tokens.

You have two options here – either a software or a hardware wallet. A hardware wallet is 100% the best option, since it stores your private key offline and massively reduces the chances of you being hacked.

Hardware Wallets (Cold Storage)

These are some of the best hardware wallets on the market right now. Keep in mind that these companies offer different wallets, but the following are what I judge to be their best price/performance offerings at the time of writing.

1. Ledger

Best Choice: Ledger Nano S Plus

A fantastic hardware wallet for beginner and advanced users alike, with a small form-factor and support for numerous tokens and blockchains.

A Ledger Nano S Plus

2. Trezor

Best Choice: Trezor Model One

A close competitor to the Ledger Nano S Plus, prioritizing simplicity over a large screen or additional functionality.

Trezor Model One in black

Both of the above will do the job, although I’ve personally used the Ledger Nano S for years (and the S Plus since its release) and rate it highly.

Once you’ve received your hardware wallet, install the relevant software if required (such as Ledger Live or Trezor Suite). You can then set up your wallets for whichever supported coins and tokens you’d like to send and receive.

Warning: Never share the seed phrase generated when you set up your hardware wallet with anyone. Doing so could compromise your device and all of your assets on it. Store the seed in a safe place away from prying eyes, and never enter it into an electronic device – the included card is a good option.

Software Wallets (Hot Wallet)

Software wallets, often known as hot wallets, are cryptocurrency wallets that are directly connected to the internet, often via a user interface within a browser extension or a separate app.

Hot wallets are inherently less secure than hardware wallets, since they’re always online and there are more ways for users to expose their private keys to malicious third parties.

Which software wallet is best for you depends on which cryptocurrencies you plan to accept, but the following should have most options covered:

WalletsCoins SupportedDevice Support
MetamaskETH and any ETH-based (ERC-20) tokensBrowser extension and mobile app
ExodusBitcoin, Ethereum, and 260+ other cryptoassetsBrowser extension, mobile app, and desktop app
Coinbase WalletBitcoin, Ethereum (and ERC-20 tokens), and SolanaBrowser extension and mobile app
PhantomSolana-onlyBrowser extension and mobile app

Once you’ve chosen your wallet, it’s time to set it up. This typically involves downloading and installing the wallet software on your computer or mobile device, creating a unique wallet address, and backing up your private key (somewhere safe!).

If you bought a hardware wallet you can also generally integrate them into a software wallet (via the import function, not by importing the seed phrase). This gives you an easy interface to safely interact with decentralized/”Web3″ services in your browser. However, it’s not necessary if you only want to send or receive crypto via the hardware wallet’s own suite.

Many software wallets allow you to integrate a hardware wallet for added functionality and security (MetaMask pictured above)

Warning: Never share your private key with anyone or enter it anywhere. Doing so could compromise all of your cryptoassets.

Receiving Transfers to Hardware and Software Wallets

Depending on whether you choose a hardware or software wallet, the steps to receive crypto are similar and pretty simple. We’ve put together a basic guide below to show you how it works.

In essence, all you need to do is give your client the wallet address uniquely allocated to you within your wallet.

If they prefer, you can also show them the QR code that will likely be shown alongside your address, which they can scan in their wallet app to pull up your address instantly.

I’ve linked the official guides on how to receive crypto for my recommended hardware and software wallets below in case you want a full explanation for any in particular.

Step-By-Step Guide on How to Receive Cryptocurrency to Your Own Wallet

  1. Choose a Network

    If you’re not using a blockchain-specific wallet, you need to decide which network you’ll use to accept crypto payments. Note that some networks have cheaper transaction fees than others (like Solana and Arbitrum), but the chances of your client being active there are slimmer than just using the regular BTC or ETH “mainnets”. However, you can always offer multiple payment addresses so your client can choose themselves!

  2. Create Your Wallet

    Whether you chose a hardware or software wallet, there’ll be an option to create an account or wallet inside. Here’s a general guide to show you how simple it is to get this set up.

    1. Install the wallet software.
    2. Head through the initial guided setup.
    3. When your seed phrase is generated (sometimes called a secret recovery phrase), store it safely – either write it on paper or save it in a password manager or somewhere safely encrypted.
    4. You’ll be prompted to re-enter your seed phrase to ensure that you have it properly written down. With most hardware wallets, if you lose your seed phrase, it’s game over, while some software wallets allow you to export it again if you misplaced it.

  3. Give Your Client Your New Wallet Address

    Now you have a wallet, you should also have an associated address. It looks something like this in MetaMask, although the exact format of the address will vary depending on which blockchain you’re using.

    Time to add it to your invoice and ask for payment! Once sent, time to arrival in your wallet can vary from a few seconds to a few hours, depending on which network you chose. You can also ask your client to send you a link to the transaction confirmation so you can track it in real-time.

  4. Make Sure You Have Enough Gas to Cover Fees

    Once you’ve received some payments, you’ll likely want to withdraw the crypto to an exchange and cash it out. To do this, you need a little of the associated base currency to pay for the transfer fee. In the case of using the Bitcoin network this is BTC, while in the case of Ethereum, it’s ETH. You shouldn’t need much, but be sure to have $5-10 to cover a few of these transfers for the future. If not, you can easily send some to your own wallet from an exchange.

Official Hardware Wallet Guides for Receiving Crypto

Official Software Wallet Guides for Receiving Crypto

Accepting Payments via a Cryptocurrency Exchange

If you don’t want to deal with wallet setup and security yourself, you can also accept payments via an exchange. This is known as custodial storage of funds, since someone else has the keys and is responsible for the security of your assets.

The main benefits to this method are that it’s easier and the exchange takes care of asset custody, reducing the chance that you’ll lose access to your own funds.

However, the negatives are closely aligned with the positives – if the exchange goes bankrupt or gets hacked, there’s a chance you can lose access to your funds entirely. This is what happened when FTX, one of the biggest global crypto exchanges, went insolvent.

Top Crypto Exchanges

Since no one saw the collapse of FTX coming, it’s important to be careful where you store your cryptoassets. The following exchanges are currently seen as some of the most trustworthy, but it’s best to do your own due diligence before depositing there:

  • Binance: By volume traded, Binance is the most popular cryptocurrency exchange in the world. First founded in China in 2017, it’s now based in Malta and offers both a global and US-focused exchange. It has a user-friendly interface and offers a huge range of cryptocurrencies to trade.
  • Coinbase: Coinbase is a publicly traded, US-based cryptocurrency exchange founded in 2012. It’s seen as one of the most trustworthy exchanges in the space. It has a growing number of altcoins although it still lags behind Binance.
  • Kraken: Kraken is a popular exchange based in the United States and was founded in 2011. It offers trading for over 200 cryptocurrencies and has a reputation for its high security and low transaction fees.
  • Gemini: Gemini is a US-based cryptocurrency exchange founded in 2014. It offers trading for just over 100 cryptocurrencies.

Receiving Transfers to Exchanges (& Other Non-Custodial Options)

Receiving crypto to an exchange is quite simple.

  1. Find the list of assets that can make up your crypto portfolio. Depending on which exchange you chose the name with be different; on Binance it’s the “Spot” list, on Coinbase it’s “Assets”. Some exchanges will also simply have a “Deposit” or “Send/Receive” button somewhere on their user interface.
  2. Choose the cryptocurrency you’d like to receive, making sure to select the right network. For instance, on Binance you can currently deposit ETH via 5 different networks. The network your client is using to transfer your payment needs to match the one supported by your exchange.
  3. Send your client the following information: the cryptocurrency you’d like to receive, the network, and the wallet address.
  4. Wait to receive the transfer!

Once received, you can sell and cash out the crypto to your bank account, store it crypto on the exchange, or send the assets into your own self-custody.

Screenshot of Binance's options to receive ETH over multiple networks.
You can receive some cryptocurrencies over multiple networks – make sure you choose the right one!

Marketing Your Cryptocurrency Payment Option

Once you’ve set up your cryptocurrency payment system, it’s important to market it effectively to potential clients. This can help you attract new clients who are seeking alternative payment options or are generally interested in paying with Bitcoin and other cryptocurrencies.

Some effective ways of marketing your cryptocurrency payment option include:

  • Include it prominently on your website: Banners, call-to-action buttons, and a few lines on your About page can be a good way to get the idea out there.
  • Mention it to new clients before sending the first invoice: They may not be aware of the benefits that crypto payments can have for them (like the low fees and near-instant transfers).
  • Draw attention to it in your general marketing materials: A small note or image on your business cards, flyers, or brochures should be enough to raise awareness.

Depending on the country you live in, receiving a crypto payment can have varying legal and tax implications. Although many countries allow people to accept cryptocurrency payments, don’t automatically assume that your country is one of them.

Due to crypto being such a new space and laws not always keeping pace, there are also some potential issues to keep in mind. For instance, I know of some countries where crypto may end up with you being double-taxed – once when it’s counted as income, and another time when it gets counted as capital gains. Not an ideal situation, so you should speak to an expert first.

Speak to a tax adviser in the country where you’re a tax resident to ensure that you’re being fully compliant with how you accept crypto payments.

Benefits of Accepting Cryptocurrency Payments as a Freelancer

Accepting cryptocurrency payments as a freelancer can provide numerous benefits, including:

  • Reduced Transaction Fees: Cryptocurrency transactions typically involve much lower fees than traditional payment methods. This means that accepting cryptocurrencies can allow you to keep more of your earnings.
  • Global Access: Cryptocurrencies are a borderless digital asset, meaning that they can be used by clients all around the world. Accepting cryptocurrencies as payment can help you expand your client base and grow your business beyond geographical limitations.
  • Faster Payment Processing: Cryptocurrency transactions are processed almost instantly, and funds can be available for use within minutes. This can be particularly beneficial for freelancers who rely on a steady cash flow.
  • Increased Security: Cryptocurrencies are encrypted and use blockchain technology, which makes them highly secure. Unlike traditional payment methods, cryptocurrencies provide freelancers with more control over their funds and reduce the risk of fraud and chargebacks.
  • No Chargebacks: Because cryptocurrency transactions are irreversible, freelancers don’t have to worry about chargebacks, which can be a significant concern with traditional payment methods.
  • Increased Privacy: Cryptocurrencies provide greater privacy than traditional payment methods since they don’t require personal information to be shared. This can be particularly beneficial for freelancers who prioritize privacy.

FAQ: Accepting Cryptocurrency Payments as a Freelancer

Is it legal to accept cryptocurrency payments as a freelancer?

This depends on your country of tax residency, although in many countries the answer is yes. Make sure to inform yourself about any legal and regulatory issues that may impact your ability to accept cryptocurrencies as a freelancer. Consult with a legal or tax professional to ensure you are compliant with any applicable laws and regulations.

What’s the best crypto for payments?

Since cryptocurrency markets are known to be volatile, it can be a good idea to utilize cryptocurrencies known for their stability – so-called “stablecoins”. These are pegged to a fiat currency, with the US Dollar being the most commonly used, and USDC and USDT being the most popular overall.

Are there sites where I can get paid in crypto for freelance jobs?

Yes, there are some dedicated sites that host online jobs that pay in crypto. However, if you already do freelance work, you can simply set up your own crypto payment options and offer this option to existing and future clients. There are multiple benefits to doing so, from lower fees to fast transactions!