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SHOULD YOU (AND HOW DO YOU) ACCEPT BITCOIN AS PAYMENT FOR HOME INSPECTIONS

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PODCAST TRANSCRIPT:

Ian: Before we get into talking about Bitcoin, which is kind of a funny subject to talk about on a home inspection podcast, but I wanted to talk for a second. Because I was driving with my family past a McDonald’s, and it brought back a funny memory. So, one of the most awkward parts about being a home inspector, in my opinion, is finding a place to change your clothes. So, I think most of us bring an extra set of clothes. Like, I have my bodysuit and my mask and all that stuff. But it never fails. I’m in an attic, and I just get nasty, or suit gets filled with junk, whatever, so I need to change. That was always the weirdest part of trying to find a spot to change my clothes. There’d be like naked legs wiggling up in my truck bed and people walking by, looking what’s going on. But the one time…

Beon: That’s more than I’ve ever wanted to imagine.

Ian: Right? It made me rethink putting my logo on the side of my truck. But I remember this one time I was going by this McDonald’s, I’m like, “You know what? For once, I’m not going to be the weirdo on the parking lot that people are like, ‘Should they call the police?’ or, ‘I don’t know.’” So, I’m like, “I’m going to change in this McDonald’s bathroom,” which I don’t know what I was thinking. Maybe I was tired. So, I walk in there. And apparently, the lock in the door doesn’t lock. So, I lock it and it goes click, but nothing actually was clicking. So, this guy just busted in, and I’m standing in my skivvies like filthy, so I look terrible anyways. Like, there’s cobwebs on my hair, I had this surprised look on my face, just completely in my underwear. I’m like, “Yeah, this is the most glorious job you could possibly have.” But the look on his face as he slowly closed the door but didn’t break eye contact.

Beon: So, you went from the naked weirdo in the car to the naked weirdo in the bathroom stall.

Ian: Yeah. There’s just no good way to go about it. I don’t know if any of you out there have had this experience. And now we’re going to talk about Bitcoin.

Beon: Yeah. We’ll just call this the random episode.

Ian: Yeah, really.

Beon: You should dress in layers. You can do this like Superman thing and just like do the reveal between inspections or something like that.

Ian: Ooh, podcast idea. I like it.

Beon: Don’t say you didn’t learn anything today.

Ian: Exactly. Beon thoughts, they’re super deep. So, we want to talk about Bitcoin, because I see this come up a lot. And I think we’re the 2 perfect people for this podcast because I literally know nothing about Bitcoin. I heard Bitcoin mining, and all I can picture is Minecraft or something like that. I don’t know how that happens. Beon, you know a lot about it, but it gets asked a lot on the forums. “Do you guys accept a Bitcoin? I took payment in Bitcoin, what do I do now?” And a lot of us might even have clients. We’ve had clients ask us, “Do you accept a Bitcoin?” So, that was kind of the idea of this podcast. It’s a little bit more niche than typical. Its niche within a niche. But we want to talk to you, Beon, and maybe you can explain to us Bitcoin.

So, we’re going to break it into 3 parts. We’re going to talk about what is Bitcoin. And, literally, I have written down here in front of me, “Ian asks a lot of stupid questions,” because that’s what I’m going to do, because I don’t know anything about it. But you’re going to break it down for us. Then we’re going to talk about, should a home inspector accept Bitcoin? And if we do decide to accept it, how do we go about that? So, you found a website, you said, Beon, How to Explain Bitcoin to Your Grandfather?

Beon: Well yeah. I mean, every podcast episode, you do some research just to make sure you know your topic. So, I was trying to think like, “Man, where can I find like an easy way?” So, yeah, that was my best article. I found a series of articles on How to Explain Bitcoin to Your Grandfather, and I was like, “This is perfect. I’ll use this on Ian.” And so, yeah, there we go.

Ian: Okay.

Beon: Saddle up, grandpa. We’re going to learn about Bitcoin.

Ian: I’m ready. I got my CD ROM open, so I can set my coffee on it, and we’re good to go.

Beon: Alright.

Ian: What is Bitcoin? We know it’s a currency, but what is it?

Beon: Yeah. So, basically, yeah, it is a digital currency. So, paper money is printed, well, on paper. And this is just a currency that exists in a digital form. So, it works very much the same way as any other currency you may use. It can be risky at times with big jumps up and down in the value of Bitcoin. But ultimately, that’s what it is. It’s a digital form of currency.

Ian: But okay, so who oversees it though? So, like the US dollar is overseen by the US. Chinese money is overseen by the Chinese. The RAND is overseen by the South African government. Who oversees Bitcoin?

Beon: Yeah, that’s a good question. And the answer actually, is one of the reasons that the founders… and it’s also kind of mystical who actually founded the idea of Bitcoin, but that’s a whole other podcast. But basically, the idea is decentralized currency, so that there isn’t one specific authority that controls or administers the currency. How the currency works, how much of it is available, how it gets mined, how the transactions happen, it’s all been predetermined in basically programming language that is distributed across millions of computers around the world. And that sets the standard for the currency. So, the concept is decentralized. It’s not attached to any bank or any institution or any government. It’s a global decentralized currency. That’s the idea.

Ian: Okay. So, that kind of makes sense to me, because most currency nowadays is basically an IOU. Like, the US dollars isn’t based on the gold standard, hasn’t been for many, many decades. It’s basically, “I will give you one dollars’ worth of goods and services for that $1 bill,” and that kind of keeps it at its value. And I imagine is probably the same with… is it the same with Bitcoin, value was perceived?

Beon: It is. I mean, Bitcoin is very actively traded, as is all currency. I mean, if you listen to your morning news, they’ll always give you an update of how the dollars trading against the other major currencies. A lot of that is determined by trades that happened during the day where those currencies are bought and sold. And, like anything, I mean, you sit in at an auction, for example, and you’re looking at a vase that you think is worth 5 bucks, but the next person knows it’s worth $1,000. So, if he bids $1,000, guess what? That vase is now worth $1,000 plus. So, very much the same with Bitcoin as it gets traded on different platforms around the world, whatever the current trading value is, what people are buying and selling Bitcoin for, that is generally the market value of the day.

Ian: Okay. So, in my head, I came into this with almost no research, except looking up some funny Bitcoin jokes. So, I wanted to make this as raw as possible so I can figure it out. In my mind, I feel like that’s a dangerous web that they weave. Because if I decided I’m in the US and I decide, “I don’t want to use the US dollar anymore,” kind of hard to get around that. It’s not like I can just go and start using Canadian currency in the US and everybody’s like, “Oh, yeah, that’s fine.” Bitcoin seems like it’s based on just people who want to use it. And if people are like, “Oh, okay, I’m not going to use this anymore,” it just disappears. Is that it?

Beon: Yeah. Look, Bitcoin is not the only cryptocurrency that exists. There are hundreds, thousands of cryptocurrencies. But looking at your major cryptocurrencies, a lot of it, I mean, like anything it’s, a case of supply and demand. If demand is down or supply is down or too far up. But that’s the thing about Bitcoin though, is it was designed to only have I think it’s 21 million Bitcoin ever to exist. Right now, we’re still in the process of mining Bitcoin. So, we’re up at, I think, somewhere over 18 million Bitcoin. So, as far as there will eventually be a finite amount of Bitcoin around. So, it’s not like we talk about printing money sometimes when there needs to be an injection in the economy or something like that. That eventually won’t be able to happen with Bitcoin.

But you see, one of the things, the criticism, because it’s designed, as I said, as a decentralized currency, but there’s a lot of controversy as to whether it is actually as decentralized as one thinks. Because to be able to make Bitcoin or mine Bitcoin, which is one of the things that needs to happen to use the currency, you need to have a lot of processing power, like raw computer power to be able to do that. So, a lot of that is done by very large mining outfits that literally own warehouses full of miners that mine Bitcoin. And the argument that’s being made is that it’s maybe not as decentralized as one may think, because of all these big mining houses. And also, because of early miners, there’s a lot of guys who do own a lot of Bitcoins. So, that makes it potentially a bit of an unstable currency, and that’s why you do sometimes see the big fluctuations.

 

Ian Okay. And I think me and maybe some others, we kind of… it’s like calling wiring Romex. Romex is a brand or gypsum board, we call it Sheetrock. I think we all… at least I do anyways, I consider all cryptocurrency, I just call Bitcoin. I think is that a lot of people, or is it just me?

Beon: Yeah. Look, Bitcoin is the big… it’s kind of like calling ketchup ketchup. It’s tomato sauce, but we call it ketchup because that was the leading brand. So, with Bitcoin, same thing. Not all cryptocurrency is Bitcoin or related to Bitcoin. They’re completely separate currencies with completely separate wallets and chains and all the rest of you want to… not to get too technical. But, yet, Bitcoin is just simply, it is the largest, most widely mined, and also the largest market capital of all the cryptocurrency coins. So, you have Bitcoin, and you may have heard of Ethereum is number 2. I don’t know who is at number 3.

Ian: What’s that one with the dog on it? How do you pronounce that?

Beon: Oh, Dogecoin.

Ian: Doge. It’s not doggy?

Beon: Well, some people say doggy. Other people will say Dogecoin. But however you want to read it out in somebody’s Twitter feed, Dogecoin.

Ian: Okay, because I’ve been calling a doggy coin for a while. Now, I feel like a big idiot.

Beon: Well, hey, I could be the big idiot. I don’t know. We’ll find out after this, I guess.

Ian: I remember many years ago, when people started making memes. I’m like, “What’s a me-me?”

Beon: Yeah. You can have your me-mes of your doggy coin.

Ian: Exactly. Okay, so we don’t need to get into Bitcoin mining. It just sounds like Bitcoin mining is, “This is how you make Bitcoin.” I imagine it’s probably so that you can’t duplicate it like a US dollar. There’s ways to figure out if it’s counterfeit. And it’s just you just have to make it. That’s pretty much it?

Beon: Yeah. For transactions to happen in the Bitcoin network, mining is the thing that needs to happen. So, it’s basically just a bunch of computers working really, really hard to crunch massive numbers. And at the end of that, if they get the right answer, so to speak, they get rewarded with Bitcoin. And they mint new Bitcoin, as well as any fees that were attached to those transactions. But that will end at some point when we hit 21 million Bitcoin, that’s the end of mining new Bitcoin, and then miners will basically just be competing for getting the transaction fees. But yeah, it has to happen to have the currency exist.

Ian: Okay. So, I’m just going to blow right past that then. I don’t…

Beon: Yeah, that’s fine.

Ian: That’s not my gig. I love hydrostatic pressure and temperature differentials. But so, now I’m a home inspector, one of my clients says, “Hey, do you take Bitcoin?” And a real client, not somebody that says, “Hey, send me this much Bitcoin. I’ll send you this much Bitcoin back.” No, we’re not talking about scammers. If you get those emails, by the way, just dump them. Ignore them. Don’t answer them. If you have a legitimate client that says, “Hey, do you accept Bitcoin?” should a home inspector accept Bitcoin, do you think, Beon?

Beon: Yeah. Look, Bitcoin and cryptocurrency continue to make big strides into front and center. For example, did you know the Staples Center is not the Staples Center anymore?

Ian: No.

Beon: It is the Crypto.com Center now.

Ian: Ooh.

Beon: So, it’s just an example of how you know crypto is making it into mainstream. So, we’re going to see it more and more. And there’s more and more apps, respectable apps, that are including crypto as an option to pay and receive services. So, it will be the future. You are going to run into it more and more. Maybe the question is not so much as should you accept it, but it’s how you accept it. Because obviously, as home inspectors, your prices you’re charging are based and pegged in US dollar, or whatever the fiat currency is of the country that you live in. And that’s ultimately the value you want to see out of the work that you’re doing.

So, if somebody is paying you in crypto, the biggest question you have to ask is, are you wanting to receive that and keep it in crypto? Or are you just wanting to see the equivalent value in dollars? Probably most will just want to see the equivalent dollar value and be done with it. And there are more and more payment apps that are making that possible, where you probably are using a payment solution right now. For example, if you’re using Square, you have a Square account, and you have the Square point-of-sale app, they can use the Cash App to be able to pay you in crypto. You receive dollars, but they pay in crypto. So, it’s an instant conversion that is done. And that sort of solution makes it very easy to accept crypto as a payment option, but you don’t have to worry about the crypto part of it, you’re just seeing US dollars in your account.

Ian: Yeah. So, I kind of like that, because I love Square, and we integrate with Square. Square is a great way to handle a lot of things, and that’s great to know that it handles cryptocurrency. But now, what if you say, “I don’t want the cash value?” Because in my mind, the US dollar kind of is going down and down and down. They keep printing more money, kind of like cryptocurrency. It’s not hitting a head where there’s a limit. So, if you’re a guy like me, and you’re like, “Hey, something’s going to give me cryptocurrency,” that has the potential to go up, how do I accept cryptocurrency? How do I accept Bitcoin?

Beon: If you want to keep it in crypto, you are now crossing over into sort of investment territory. And that’s really how you need to look at it. And it is still considered a very speculative market, because it’s volatile. So, if you want to keep it in Bitcoin or in Ethereum, or in whatever the currency you’re receiving, that’s fine. That’s up to you. But point number 1, you got to realize this could go up, yes, that’s what you’re hoping. But it could also go very, very far down. So, that home inspection that you got 400 bucks for it last week, it was worth 400 bucks when you got it, but it may be worth 300 or 200 a week or 2 later. But it could go the other way too. So, that’s just the first thing to keep in mind. But second to that, if you do want to keep it in crypto, you’re going to have to sort of dip into the whole crypto market a bit more. You need to have a digital wallet where you can keep that currency.

Ian: That’s just a term for an account? I just want…

Beon: That’s right. Yeah, it’s an account. So, it’s basically all the transactions in a digital currency happened on a thing called the blockchain. And the blockchain has a record of every wallet and every transaction that ever has ever happened on the blockchain. So, basically, you would just then get a wallet, which is sort of it looks like a… I forget how many digits there are. Basically, like a 20 to 30-digit address, which is that your wallet. And somebody would send that currency to that wallet, and then you will see the balance increase in your wallet.

Ian: Alright, this is turning more and more into Soylent Green.

Beon: Yeah.

Ian: Okay. So, somebody pays me in cryptocurrency, and if I want to keep it in my wallet or a Bitcoin crypto account, rather, how would they get it…? They would just go from wallet to wallet? Who could handle that transaction? Who would we use? Like, doesn’t seem like Square would do it, or would they?

Beon: Now, yeah, that’s an interesting question. There’s a few different approaches. If you go sort of raw blockchain wallet-to-wallet transaction, you’re going to need… there’s a lot of different crypto wallets out there. But that’s maybe a bit technical for this podcast. What the guys that… and we’re not affiliated with Square or Cash App or anything like that, but the guys have taken a very interesting approach, because with Cash App, for example, you can, if you register as a Cash App business account, you can also accept crypto payments from people and not have it converted. You can keep it right in crypto.

But the interesting thing about that is they actually invested in a ton of Bitcoin. So, they own like, I think it’s like 400 and something million dollars’ worth of Bitcoin. And what that enables them to do is, when you transact, so a business accepting Bitcoin from somebody else, it doesn’t actually happen on the blockchain. It’s sort of just an internal transaction to Square in Cash App. And the cool part about that is it’s a zero-fee transaction. You can send cryptocurrency to another address with like zero fees. It just exchanges. Where they end up making their money is, if you then want to convert that to fiat currency, you get whatever spot rate they give you, and that’s where they make their money, converting that back and forth.

So, in that way, it’s a quick free transaction that is done just on a single app. And you can actually receive and maintain a Bitcoin balance. But what you need to understand is you’re not maintaining a Bitcoin balance with a wallet on the blockchain, it’s sort of like just an internal account at Cash App or Square that you now have a Bitcoin balance in.

Ian: Okay. And so, there’s easier ways to do it than being a programmer like you and knowing how blockchains work and all that stuff.

Beon: Yeah, they making it more mainstream. Now, some may argue that, well, if you’re just maintaining a Bitcoin balance in an app that, that it’s getting away from the actual, whole core principle of cryptocurrency and blockchain. And that is true, but unfortunately, that remains a hurdle between mass adoption. Because most people don’t, like you just say, want to get into knowing how to set up a wallet and send crypto exchange currency. And if you’re sending an unchained transaction, it’s always going to have fees. And depending on how busy the network is, at that point in time, the fees may add up over time.

Ian: Yeah. So, for a guy like me, it sounds like there’s options that may be a little bit better, but kind of kills the purity of the coin, or however you guys put it.

Beon: Yeah. It’s not as… yeah, it’s not a purist blockchain currency approach, but it’ll work. That’s what most people are going to be doing. PayPal, for example, is doing something very simple. Like it’s similar. They’re not as far along as the Cash App. They’re working on a very similar concept to be able to accept crypto payment. But, again, it just gets converted to fiat currency. They don’t have the crypto option where you can get paid in raw crypto.

Ian: Yeah, and we need to give that disclaimer just one more time. We’re not affiliated with those apps or anything like that. And we’re also not giving financial advice. This is we’re not financial experts. So, you should do your own research on it. So, there’s our little scrolling disclaimer.

Beon: Yeah.

Ian: But this is good for me. It helps me. Because we’ve been asked by people, “Do you accept Bitcoin?” And to some people, it’s funny, they’re like, “What you don’t accept Bitcoin?” Like, that’s their whole life. They’re like, “You crazy, archaic old man. You’re using paper dollars?”

Beon: Yeah.

Ian: I don’t use paper dollars, but I use a representation of them. I had a 20 in my wallet for like 6 months.

Beon: Yeah, exactly. I mean, you think of even using a credit card, we use credit cards every day, and you don’t handle paper currency. And we don’t think about it, because we hardly ever see cash. Everything, we take it for granted that it’s there somewhere. But digital currency is taking it another step forward. I was thinking, it’s also kind of like at the point where we transition from paper to PDFs or Word documents or something like that. It had some resistance. It felt weird maybe not printing something. But this is a very similar idea when it comes to currency.

Ian: Okay. So, and that’s exactly it, it’s just a new idea. And eventually, those new ideas become standard. So, now, I decide, “Hey, people are asking me if I accept Bitcoin, I’m going to start accepting it.” I kind of set some stuff up to be able to accept it, whichever form I see fit. What are some warnings, additional info, things that I should know? Because Bitcoin also seems to be… cryptocurrency in general seems to be used as like one of the big scam things. Like, the deposed Prince of Nigeria contacts you, he always wants Bitcoin. He doesn’t want money anymore. He wants a Bitcoin. What are some things that we should be aware of and be very clear on?

Beon: Yeah, yeah. Look, because it is a distributed currency that doesn’t have any central control, a lot of the headlines we hear about it is when there’s shady stuff going on. And yeah, for the record, there is a lot of shady stuff that goes on. Criminal networks prefer using cryptocurrencies for payment, because a lot of the networks are privacy coins that are untraceable. So, you do have to watch out. I think what you said at the beginning was a good point. If you’re transacting with somebody who’s verified, who you know, they’re just basically asking for an alternative form of payment. That’s the first important thing.

The second important thing is to make sure that you use a reputable app, we’ve mentioned Cash App, Pay Pal app, to be able to receive that cryptocurrency. Or if you’re going to make the delve into maintaining a crypto balance and doing crypto-to-crypto transactions, making sure you’re using a good exchange. Like, for example, in the US, Coinbase is one of the most well-known and reputable crypto exchanges that you can use to be able to exchange currency. So, yeah, there are a lot of scam guys out there. But just like any financial transaction, make sure that you have all your bases covered.

Ian: Gotcha. And one more important question about that. You say reputable?

Beon: Reputable as far as.

Ian: Isn’t it reputable?

Beon: You forget I come from somewhere else, man.

Ian: Oh, it’s the King’s English. Gotcha. Gotcha. You say potato. I say potato. You know what? Nobody says potato, so you’re wrong. I’m just messing with you.

Beon: I was going to say it’s my Florida accent, but [inaudible] pull that one off.

Ian: So, after we find a reputable person to do that, like is there any kind of telltale signs? Not all of our clients are always going to be, unfortunately, trustworthy. We might have a legitimate client, they hire us to inspect their house, is there anything funny that they could pull on us?

Beon: Yeah. Look, the funny thing is, if they’re try to force you to a crypto-only transaction where they don’t want to use the Cash App, they don’t want to use PayPal, they just want to send you crypto to your wallet, and they’re insistent on it, and you don’t feel comfortable with that, you don’t know how to do it, you haven’t done it before, don’t compromise. Because, yeah, there is stuff. If you don’t know how to check the balance and verify the transaction and you don’t know how to convert that or send it to an exchange where you can convert it to US dollars if you want to do that. It’s just a no. Don’t do that because you’re going to get stuck.

The other thing is Bitcoin, Ethereum, they are the big 2 cryptocurrencies. But if somebody is trying to offer you some cryptocurrency you’ve never heard of, “Oh, I’ll send…” Dogecoin, for example, is one that we joke about, but it is a meme coin, but it’s very volatile. If somebody’s offering you to pay in Dogecoin, it’s a bit dodgy.

Ian: That was terrible, but awesome at the same time.

Beon: Or a bit doggy, if you’re Ian.

Ian: Oh, yeah.

Beon: But yeah, if it’s a cryptocurrency you don’t recognize, you can be insistent on, “Hey, look, I accept cryptocurrency, but only Bitcoin, only Ethereum, or I only use the Cash App.” And that at least gives them the option. But if they being hardline with you, I don’t know, it raises some red flags for sure.

Ian: Okay. And I’m really glad you brought that up, because that is exactly the kind of stuff I would want to know. I’d only want to accept reasonable cryptocurrency, nothing funny, nothing weird. Even if it’s in the news, maybe kind of skip on some of the more volatile stuff. They might be trying to dump it on you at that time because they know it’s about to go down or something like that. Who knows?

Beon: Yeah.

Ian: So, that’s good information. Man, I really am glad that you talked with us today about this, because it’s becoming more and more common. It’s getting asked a lot more. And it’s a realm that a lot of us maybe have not even really looked at. And to be honest with you, we might even invest in Bitcoin. We might go online and buy it and have it and not understand any of that stuff or even accept it as payment. But we might get asked, and this is kind of a new realm of that. So, we really appreciate you expressing some of those things and helping us out with that, Beon.

Beon: Yeah, you’re very welcome. I think one final misnomer about cryptocurrency is some folks think that, “Well, if I accept cryptocurrency, then it relieves my tax burden because cryptocurrency is not taxable.” But you just got to watch out there, because it is taxable income, just the same as any currency that you’re earning. So, and if you are using a reputable exchange like Coinbase, they do all the financial reportings to comply to the government regulations. So, just something to bear in mind. You’re not going to be paying less taxes because you use cryptocurrency.

Ian: Awesome. Thank you for that and appreciate it, because we might not have known that either. So, thanks again, Beon. We’re looking forward to our next podcast. And everybody out there, don’t be afraid of Bitcoin. It might be the wave of the future. And if you want to accept it as payment, take some of this information, run it by your accountant and do your own research, but it might be the way to go.

Beon: Alright, yeah, you’re welcome. Anytime.

Outro: On behalf of myself, Ian, and the entire ITB team, thank you for listening to this episode of inspector toolbelt talk. We also love hearing your feedback, so please drop us a line at [email protected].

If you’re enjoying the conversation, don’t forget to hit the subscribe button. Our podcast is available on all major podcast platforms. For more information on our services and our brand-new inspection app, please visit our website at Inspectortoolbelt.com.

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