I still remember when I got to my friend’s apartment and found him sitting on the sofa. Anger was etched all over his face. When I asked him if he was okay, he raised his head and looked at me with frenzied eyes. He mumbled something that I had already heard several times before: “I haven’t been paid”. My friend is a web designer. He is really good at what he does. Freelancing suits his independent character very well: working autonomously and in a flexible manner. He is one of 50m freelancers worldwide[1].

A changing environment

According to the survey “Freelance in America”[2], the freelance workforce has grown fast and will continue to do so until it constitutes the majority of the US workforce within 10 years. The transformation of the economy, driven by technological innovation, has contributed to the growth of the freelance market. Companies are constantly changing, merging, acquiring. This turbulent environment, couched in uncertainty and fueled by competition, forces companies to continuously readjust and adopt a more flexible approach, especially with regards to human resources management. This trend is also increasing due to changes in behavior, especially that of Millennials, who are more drawn by the promise of a life and work style based on freedom, autonomy and flexibility, where they choose when, how and with whom they work.

Current issues encountered by freelancers

Most freelancers today get their work via well-known freelancer platforms. These platforms have undoubtedly made their own contribution to the world of freelancers, enabling them to quickly and easily find an appropriate job in line with their skills and experience. However, today the use of such platforms brings its own issues.

  • As my friend experienced several times, freelancers run the risk of not being paid or not being paid on time. This is actually pretty common in the freelance industry. 70% of freelancers in the UK have even been asked to work for free[3].
  • Another mind-blowing factor is that most of these platforms charge the freelancers themselves a significant fee of up to 20%. Fees are often not split between clients and freelancers.
  • Freelancers are also poorly protected if any sort of conflict (such as not being paid) arises with a client. Indeed, there is little fair and objective assessment if anything happens. The centralized platform will seldom get involved and protect the freelancer’s stake.
  • Last but not least, the platform owns freelancers’ identity data. The platform can – without warning – close any account they want to. This issue is obviously not specific to freelancer platforms but the difference is that a freelancer’s main source of income comes from these platforms.

A decentralized freelancing platform

In a context where a new business model is shaping the future of work and people are increasingly freelancing by choice, the emergence of a new ecosystem that solves the issues of the current ‘traditional’ model is inevitable – a new model where freelancers are valued, protected and can also make themselves heard.

The future for freelancers will be much brighter. Many projects are currently emerging, building decentralized freelancing platforms based on blockchain technology. A decentralized platform is a peer to peer ecosystem which enables direct contracts between freelancers and clients, removing the third party (the centralized platform).

Most of the current projects are built on the Ethereum blockchain, which is today the most mature ecosystem, created by a worldwide community of developers and forming one of the most open, transparent and trust-free networks. There are already hundreds of decentralized applications that run on the Ethereum protocol. The Ethereum blockchain can fulfill a lot of the technological requirements to build a fully decentralized freelancing platform. Some challenges remain with regards to scalability and storage of data, however. Indeed, a fully decentralized platform requires a huge amount of data to be stored, which the Ethereum blockchain can’t fully handle on its own. Some central database or off-chain solutions are therefore needed, although this factor does not diminish the benefits that such ecosystems offer.

Benefits

An ecosystem based on blockchain technology using smart contracts[4] can definitely create value and solve a number of the issues encountered today.

  • Fees charged by the platform are removed or at least significantly reduced as there is no more centralized platform. The decentralized freelancing platform takes from 1% to 3% of the employment contract’s price in fees. Some platforms do not take any fees but the access to specific features, such as access to a freelancer’s skills or heavy database queries, are charged to the clients.
  • Deposits and payments are secure through a smart contract. The client’s funds are frozen in an escrow deposit. Once the job is completed by the freelancer, the transaction is automatically executed. Thus, freelancers no longer run the risk of not getting paid.
  • The Ethereum blockchain-based smart contracts enable a token to be issued through an ICO. In a decentralized freelancing platform tokens can allow clients to make payments and deposits, or use specific features of the platform. Tokens enable freelancers to be paid, rewarded, incentivized and also to participate in the community and vote.
  • Transactions and data are stored on the blockchain. Some decentralized platforms give freelancers ownership of their data, with exclusive access, and without any risk of censorship or having their account deleted. This increases trust in the ecosystem, giving freelancers more security. Depending on which functionalities are implemented, freelancers can, for example, have the option of selling their data to any future client instead of giving it away for free.
  • A decentralized platform can serve as a freelancer’s tribunal, which will arbitrate any dispute between a client and a freelancer. Eligibility of members is based on the freelancer’s reputation and profile ranking within the platform. This process guarantees a fairer settlement, while also taking into consideration the interests of the freelancer. Freelancers’ work will be assessed more objectively, evaluating all discrepancies in opinions.

There are currently many competing projects aiming to build a decentralized freelancing ecosystem. They have all recently launched an Initial Coin Offering in 2017 and 2018. However, their business models differ in many ways, targeting different industries and skill sets, and integrating distinctive features and functionalities. It remains to be seen which of them will stand out from the rest. Either way, the outcome will be favorable for freelancers, freeing them from all the present burdens.

In case you are interested in exploring the current projects that are building decentralized freelancing platforms, please feel free to access the following links. This is not an exhaustive list:

·      https://www.talao.io/

·      https://unitalent.io/

·      https://canya.io/

·      https://www.blocklancer.net

·      https://www.coinlancer.io

·      https://ethlance.com/

·      https://indorse.io/

 

 

[1]  https://www.freelancersunion.org/

[2]  https://www.upwork.com/i/freelancing-in-america/2017/

[3]   https://www.independent.co.uk/money/are-we-all-working-for-free-a7544941.html

[4] A smart contract is a computer protocol built on the blockchain and intended to facilitate, verify and then execute the terms of the contract automatically. Smart contracts enable parties to deal with each other on terms that have been specified previously in a digital form without the need for third parties or written documentation.

 

====

This is a guest post/opinion piece and should not be construed as financial advice. 

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What does it take for Bitcoin to achieve mass-adoption?

CryptoCoinPrediction.com is not responsible for the article’s content or accuracy and may not share the author’s views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

What does it take for Bitcoin to achieve Mass-Adoption?

The biggest obstacle for Bitcoin right now is, that so few people use Bitcoin. But why do so few people actually use Bitcoin from a day-to-day basis? Well, the answer is, because so few people use Bitcoin. That might sound a bit confusing right away, but I will explain myself.

Bitcoin has the obstacle to overcome, same as Facebook. Facebook became so valuable, because literally every friend of yours, and their parents where using it. If no one used Facebook, then I really doubt it would be nearly as valuable to humanity as it is today.

The same exact thing also applies to Bitcoin. What makes money valuable, is the fact that you can pay anybody for anything with it. Good luck paying your local supermarket in Bitcoins. It just doesn’t make sense to do so.

This is also called the network effect. It sates, that a system is only so valuable, as the number of people using that system.

So, let’s dive into the 3 deciding factors, that must happen for Bitcoin to fully achieve mass adoption.

First, of course, is the support by a big corporation or even country. For example, if a big company like McDonalds starts to accept Bitcoin, then people would be more inclined to make purchases with Bitcoin. This makes total sense, because why would anybody adopt the usage of Bitcoin, if you couldn’t make any real-world purchases with it? Exactly, it doesn’t make any sense whatsoever.

The first point was pretty obvious, so let’s look at the other deciding factors, that are crucial for Bitcoin to be mass-adopted.

Did you actually know, that a third of the world’s population, 2,5 million adults to be precise, do not have access to the banking system? Yeah, what people in the first-world countries take completely for granted, isn’t all that common all around the world: A bank account. On the other side, many more people in these third-world countries do have mobile phones, but no bank accounts. So, what if all those people start using Cryptocurrencies, like Bitcoin, for their online and day-to-day transactions? They could skip the traditional banking system and directly buy and sell Bitcoin from their smartphones. If one third (or even less) of the world population starts to use Bitcoin, it will gain world-wide recognition and overtake any other currency.

The third scenario that could happen, is that a major economic collapse or abuse occurs. When this happens, lots of people will want to transfer their wealth to something that isn’t dependent on any country or government, but is universally accepted in every country of the world. There aren’t many options for such things. One of these things is, gold. And the other could be Bitcoin, which I see as the digital version of Gold.

I hope we will never have to experience such a catastrophic event in our lifetime, but it sure is a positive thing for Bitcoin, since lots of people will adopt it.

These are all the point I could think of. Thanks a lot for reading and have an awesome day! Visit me at flashipcrypto.com for more Crypto-article?