Upgrading the Gig Economy Through Blockchain Tech

Freelancing has seen strong growth over the past year. A survey made by freelancing service Upwork and the Freelancers Union revealed that there are currently more than 57 million American freelancers in 2017, which is a 30 percent increase from the previous year. This upward trend is expected to continue and it is estimated that half of America’s workforce will be made up of freelancers by 2027.

Millennials are leaders in this shift towards freelance work with many drawn to freelancing by the flexibility and mobility provided by such arrangements. There is also an appeal in “being your own boss” and having the ability to choose what projects to work on and when and where to do so. However, beyond these perks, many budding freelancers are often hit hard by certain freelancing realities. There is intense competition in the freelance job market and clients can be a source of frustration. It takes skill, expertise, business and financial savvy, and plenty of grit to thrive.

Job marketplaces and freelancing platforms have improved the situation somewhat by serving as intermediaries to facilitate transactions between parties. However, even with these services, freelancing concerns abound. Freelancers continue to complain about the distortion of rates brought about by cheap but substandard competition and clients who micromanage, low ball, and even skip out on payments.

Many verticals are now turning to blockchain to bring back trust to their respective industries. Fortunately, a number of blockchain initiatives have focused on creating solutions for the freelance community.

Here are five ways these initiatives are leveraging blockchain to help make freelancing a viable means to make a living for professionals:

1. Being Visible

Freelancers typically compete for a limited set of jobs. Just like any business, marketing plays a crucial role in success. Visibility is key but maintaining a presence on freelancing platforms and social networks is tough and tedious work in itself. Dock is trying to change this by offering means for professionals to effectively manage their online profiles. As a data exchange platform, Dock enables users to keep all of their profiles up-to-date and control who can access their information. Recruiters and headhunters constantly trawl these online profiles to identify potential recruits so having consistent and up-to-date profiles is important.

2. Standing Out

Trying to stand out also has its challenges. Because of competition, many freelancers have resorted to embellishing their profiles with exaggerated and falsified credentials. To help combat this, blockchain is now being explored for use to validate credentials. Several academic institutions have launched pilot programs to use blockchain to keep records of their graduates.

Dock CEO Nick Macario says that: “Inaccurate and unverified work experiences plague the world of resumes and CVs, forcing recruiters to seek validity, wasting time and resources. Blockchain will provide truthful and verified experiences, improving the odds of a successful hire dramatically”.Services like Blockcerts and BCDiploma also enable organizations to issue and verify certifications and credentials using blockchain. With these measures in place, freelancers will be encouraged to be honest about their qualifications so those with truly superior profiles will easily stand out.

3. Landing Jobs

Blockchain-based job marketplaces like Coinlancer and Ethlance are emerging to become viable alternatives to established freelancing platforms. Blockchain provides transparency to transactions done on these marketplaces. Decentralization helps overcome problems such as unexplained awarding of projects and unreliable arbitration and dispute resolution that have plagued some of these centralized services. These new platforms also challenge the need for intermediaries to facilitate transactions. Freelancing platforms take cuts from transactions conducted using the platform. Through these new decentralized services, freelancers would be able to enjoy their full earnings from successful projects.

4. Establishing Scope of Work

Another problem freelancers often face is scope creep. Clients sometimes abuse freelancers by having them work on additional deliverables that are outside the initial scope. Often, these clients will even withhold payment until freelancers are forced to deliver these extra requirements. Blockchain smart contracts will help parties define details such as scope, deadlines, and payment. This will allow freelancers to decline these adjustments or at least get paid extra for any new work. Given recent developments in the admissibility of blockchain records, smart contracts are likely to become enforceable in the near future.

5. Guaranteeing Payment

Through the use of smart contracts and blockchain-based jobs platforms, it is possible for payments to be put in escrow at the start of an assignment. If parties elect for payments to be in cryptocurrencies, smart contracts can even be used to automate the release of payments upon completion of work or submission of a deliverable. Of course, the practicality of receiving cryptocurrencies as payments may still be up for discussion due to volatility concerns. However, cryptocurrencies could make payments more favorable for cross-border freelancers since crypto transfers are often cheaper and faster compared to conventional fiat fund transfers and digital payment services.

Making Freelancing Viable

These efforts should come as welcome developments for the freelance community. Professionals can now leverage the strength of their credentials as blockchain helps weed out fraudulent competitors. The emergence of decentralized marketplaces also provides fresh alternatives to established platforms.

The transparency provided by blockchain can also help create a fairer market. Employers and freelancers will be able to establish rates commensurate with the work involved or expertise needed. Smart contracts will also help parties establish clear-cut expectations and guaranteed payments upon successful completion of work. All this innovation will help bolster freelancing as a legitimate livelihood for professionals which will lead to a better experience for both freelancers and clients as well.