- What if Bitcoin drops sixty percent before the position unlocks?
- It probably will, at least once, between hire and the final unlock milestone. Price drops of that magnitude have happened in every cycle since 2011. The funding approaches here are designed to make that survivable: every award is small, every unlock milestone is years out, and the position is measured in BTC, not USD. The team member acquires bitcoin; the dollar value rides the cycle. If you can't tolerate that framing, this is the wrong instrument.
- How is this taxed?
- In the US, BTC compensation is treated as ordinary income at fair market value on the date of receipt, with capital gains/losses on any subsequent appreciation. You owe tax when each unlock lands, not when the award was first assigned. Other jurisdictions vary considerably. This is not tax advice. Talk to a CPA who has handled crypto compensation before. The schedule export from the calculator includes the data your CPA will ask for.
- Isn't custody a liability for the company?
- It is, if you hold the bitcoin on the team's behalf. The default pattern we recommend is the inverse: awards are paid out to the team member's own wallet at unlock, transferring custody (and the liability) at the same moment as the economic interest. Until unlock, the company holds the BTC in its own treasury or with a professional custodian, the same way it would hold any reserve.
- What happens to unlocked Bitcoin if an employee quits?
- Unlocked BTC is the team member's, full stop: the same legal logic as a vested stock option. Locked BTC reverts to the company per the unlock schedule. The departure doesn't accelerate the unlock unless your employment agreement says so. Configure the schedule in the calculator to model exactly when the cliff and milestones sit.
- What if regulation changes?
- Compensation in BTC is currently legal in every major jurisdiction we're aware of, with reporting requirements that vary. The direction of the rules since 2022 has been toward clarity, not prohibition. That said, this is a multi-year unlock in an asset whose treatment is still evolving. Keep counsel close, particularly if you have international hires or operate in a state with active crypto-specific legislation.
- Why not just pay a salary in dollars and let people buy BTC themselves?
- That's a perfectly valid strategy. Bitcoin-as-benefit is not an argument that everyone should hold BTC. It's an argument that the team members who already want exposure to it should be able to receive their long-term compensation in it directly, without paying the exchange fees, delays, and the income-tax-then-buy hassle of doing it manually each pay period.