Image Credit: Pixabay

Bitcoin emerged as the world’s first decentralized cryptocurrency back in 2009. By internet standards, this concept has largely stood the test of time as it is more popular (and valuable) than ever before.

Despite many valuation ups and downs over the years, cryptocurrencies have made a positive impact on the lives of people all over the world; particularly regarding self-employed online freelancers.

The online labor market for jobseekers has been exponentially growing over the past several years; this growth is not expected to slow anytime soon. In fact, it is expected to double in size in the next four years.

The growth of the gig economy – a labor market represented by a succession of short-term contract opportunities as opposed to a traditional, structured job – has largely been fueled by platforms like Upwork, Fiverr, TaskRabbit, and an array of other freelance marketplaces.

The people that choose a freelance lifestyle do so for many increases in their quality of life. The flexibility and freedom is unparalleled. Its dynamic nature eliminates boredom. And one can use a myriad of skills and enjoy a very diverse work experience, all from the comfortable of their own home.

What many don’t realize about the current gig economy, however, is that there are some challenges inherent in the industry. As with any large system, it tends to take better care of itself, rather than the individuals who reflect the sum of the parts, For example, many gig economy workers are beginning to shine a light on the lack of corporate responsibility that is creating longer hours and lower earnings.

In the online realm, however, cryptocurrencies and the blockchain technology that supports them are the keys to rebuilding the gig economy on a level playing field.

Here are 5 reasons that cryptocurrencies and blockchain tech will help freelancers usher in the gig economy 2.0.

#1: Unregulated Transactions

One of the most alluring aspects of utilizing cryptocurrency is the fact that it makes the middleman in financial transactions, such as banks, obsolete.

With these types of unnecessary entities removed from the equation, transactions can be simplified and handled exclusively by the parties involved.

This not only makes the process more streamlined, but it also cuts down on payment delays and minimizes or eliminates conversion rates.

This is what makes blockchain-based cryptocurrency freelance marketplaces particularly appealing to self-employed individuals.

As it currently stands, most freelance marketplaces charge significant fees that can dramatically decrease the amount a contractor receives for their work. For instance, Upwork charges freelancers a 20% fee and employers 3%. Freelancer.com charges a 10% fee, and 3% for clients. On top of these weighty fees, most platforms also charge a withdrawal expense as well.

Using a cryptocurrency-based platform, however, eliminates a significant portion of these fees as many utilize blockchain technology; the core benefit to freelancers as this puts the power into their hands, not the company’s.

#2: Decentralized Freelance Marketplaces

Since cryptocurrency is decentralized, the marketplaces that employ this type of monetary compensation are starting to transform in the same way.

The problem with the current freelance marketplace model is that these platforms are centralized, meaning that users are largely at their mercy. Freelance marketplaces that leverage blockchain technology, however, shift the paradigm by enabling each user to contribute the necessary resources required for running the marketplace; this puts users in control of the platform as opposed to a corporation.

A blockchain is defined as, “. . .a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.”

This decentralization is what allows most of the other cryptocurrency benefits to materialize.

Image Credit: Pixabay

#3: Increased Transaction Safety

Cryptocurrency brings a new level of safety to sending and receiving payments.

While this is something that people are typically averse to due to the volatility of cryptocurrency values, methods such as trustless escrows mitigate any potential risks.

These systems ensure that both parties are paying or receiving exactly what was agreed upon as cryptocurrencies are transferred into decentralized tokens, specific to the platform. These are then placed in escrow where they will remain static throughout the transaction.

Through this system, both parties can always guarantee that $100 in will equal $100 out, and that nobody will be left with the short end of the stick.

#4: No Risk Contractors

While freelancers have become notorious for having to chase down their money from certain parties, companies have also had their fair share of issues hiring freelance talent.

Utilizing the escrow system mentioned above, corporations can ensure that the risks associated with hiring freelancers (such as chargeback fraud) are no longer an issue.

This allows brands of all sizes to open more positions to a larger talent pool of potential prospects capable of meeting their needs.

The lack of risk – paired with the flexibility of cryptocurrencies – enables businesses to work with freelancers that they otherwise might have passed over due to location, a couple of poor reviews, or other determining factors.

#5: Complete Transparency

Freelance marketplaces that employ a blockchain to support its user base create complete transparency on the platform.

The use of this type of foundational technology ensures that each transaction, review, and all other interactions are visible to all users. This makes manipulative or dishonest practices like fake reviews a thing of the past.

Cryptocurrencies and blockchain technology are in the middle of breathing new life into freelancing and revamping the online gig economy. These services provide all parties with a safe, secure, and transparent avenue to conduct business online.

Consider leveraging cryptocurrencies and blockchain-based marketplaces to ensure that you are not overpaying fees, mitigating the risks involved in online labor, and empowering yourself as an independent contractor.