Transforming the freelance sector with crypto and blockchain
Freelancing is certainly on the rise as many choose to exit the 9-5 for a more flexible work life. COVID-19 helped move this trend along, as people looked to supplement their income from home. UpWork’s Freelance Forward 2020 report reinforced this trend. Here are some of the highlights from the report:
75% of those who left an employer to freelance say they make the same or more income than they did in their traditional job.
There has been a 22% increase in total annual freelance earnings over the previous year, with a total of $1.2 trillion in 2020.
58% of traditional workers who began working remotely after COVID-19 are now considering freelancing.
71% say perceptions of freelancing as a career are becoming more positive.
59 million Americans are now freelancing — that’s 36% of the total workforce.
86% of all freelancers say the best days are ahead for freelancing.
Freelancing is an appealing choice for those looking to escape the monotony of the 9-5. There is certainly also an alignment with freelancing, where one takes control of their own career, and the values of decentralization at the core of many blockchain projects.
However, there are many problems in the way freelancing is currently carried out, with one being that the vast majority of freelancing activity goes through an intermediary, and with these intermediaries comes fees. UpWork, one of the primary freelancing platforms, for example, charges a 20% commission. This takes away income from the freelancer, or passes the cost on to the client, with the commission instead being diverted to a publicly traded company.
Blockchain could solve this problem by decentralizing the freelancing process. Similar to decentralized exchanges (DEXs), blockchain could help take the middle-man out of the transaction, allowing the client and freelancer to set their own terms, ensuring 100% of the cost is going to the freelancer for their work, and not padding the pockets of shareholders. This decentralized freelance platform could have minimal or no fees at all, and similar to a DEX, could have a governance token associated with it, which could also be used to facilitate transactions between the two parties.
One potential pushback to a decentralized freelance platform, is that current freelance platforms, like UpWork, offer a sense of security, as they help moderate the contract process, and offer escrow and other protections to freelancers. This is where smart contracts could come into play.
Smart contracts eliminate the need for a middle man, by allowing two parties to set their own terms written into a self-executing contract. Smart contracts are still in their infancy, and are the subject for a future blog post, but the potential certainly exists for smart contracts to help bridge the gap in the freelance process by offering a safe, secure medium for the parties to transact through.
The potential is there for blockchain technology to transform the way freelancers offer their services, saving them costs in the form of commissions, and offering them more freedom over their own work. The future is bright for freelancing, and I think blockchain should and will be a part of that future!
What do you think of a decentralized freelance platform? Is it realistic? Tweet us at @Crypto_Altruism to help us create a safer crypto community.
