Bitcoin & Freelancing: How Cryptocurrency Can Fuel the Gig Economy

The shape of the global workplace has changed drastically since the turn of the millennium. The rise of automated machines has replaced millions of workers worldwide, while the constant push by corporations to cut costs has seen many jobs go to the lowest bidder; usually ending up in developing regions in East Asia.

To a millennial, the idea of staying at a single workplace your entire life probably seems unthinkable. The world has changed a lot since their parents’ days, and the process doesn’t look to be slowing. Today’s young people have already gotten used to the idea of moving from job to job for the rest of their lives.

Now, the gig economy is fast becoming the main source of employment for people all over the world; facilitated in no small part by the Internet’s ability to connect remote workers with prospective employers.

At the time of writing, over a third of Europeans and Americans are working as independent contractors in the gig economy. That number is set to rise to 50% by 2020, and there is now growing pressure on the existing economic infrastructure to keep pace with that rise.

With the rise of Bitcoin and other cryptocurrencies, can the blockchain help facilitate a new form of employment and help workers around the world earn a fair living from their efforts?

Payment Services

As things stand, the main way that freelancers get paid is through online digital payment providers like PayPal.

PayPal made a huge impact when it first arrived on the scene, but that was before people relied on it for their weekly or monthly pay check.

The excessive fees inherent to PayPal – with some equating to around 4% – render it impractical for constant large scale use. Many useful digital payment alternatives have appeared in recent years, but all of them charge fees far beyond what a typical freelancer would find reasonable.

Crypto Steps In

This is where cryptocurrency could help ease the transition. Typical crypto transactions fees amount to mere pennies, and when combined with the rapid confirmation speed of a blockchain transaction, this makes cryptocurrency a possibly ideal source of payment for a growing number of freelancers.

Read our Guide to Payment Cryptocurrencies

At the same time, the rise of blockchain-powered platforms for the posting and finding of freelance jobs offers a major challenge to existing content farm websites, where freelancers must pay a hefty fee as high as 25% on every payment received.

Such content farms have proved invaluable for freelancers in the past, and are still regularly used by numerous Fortune 500 companies.

However, the gig economy has grown so much in recent years that sites like Upwork have stopped accepting registrations for freelance writers, due to unmanageable market saturation.

The sheer abundance of writers, coupled with the exorbitant fees inherent to the site, has resulted in a ‘race to the bottom’ mentality – where everyone lowers their fees as far as possible in order to undercut the their competition. Quality writers have a hard time getting noticed amidst the sea of cut price contractors, who often come from areas of the world where the U.S dollar is worth more, and so can afford to set low prices.

Blockchain Freelance Platforms

The rise of the gig economy has not gone unnoticed by the crypto community, and now a range of blockchain-based platforms are popping up which seek to decentralize the freelance bidding process.

Sites like Ethlance offer a job marketplace where workers and clients can connect directly, without requiring any opportunistic middle-men. Ethlance is a platform built on the Ethereum blockchain, and offers freelancers the chance to find work with ZERO fees. An initial small GAS payment is required to open an account, but that’s the only fee involved. Payments are made directly in ETH, which can then be cashed out for fiat or your choice of digital currency.

Ethlance is a district under the District0x Project

Similarly, CanYa is a recently launched startup which targets the same area of the market as Ethlance, and comes in the form of a mobile app. Users receive payment in CAN tokens, or CanYa Coins, and the market is self-regulated by an automatic reputation system which ranks clients and freelancers based on their past performance.

The Developing World

While the slow but steady spread of the gig economy may still be a novelty to many Westerners, it has already been a regular part of life in the emerging world for some time.

In 2015, African nations collectively created over 3.1 million new jobs. In the same year, however, over 12 million young people entered the workplace for the first time. These numbers speak for themselves, and go some way to explaining why Africa is fast becoming a home for the gig economy, as well the crypto services which accompany it.

Read how Cryptocurrencies are helping Developing countries

The infrastructure may not be there to prop up a regular Western-style economy, but anyone within reach of an internet cafe, with a phone or laptop, can conceivably make a good living as a remote freelance contractor.

Another major benefit of introducing cryptocurrency into this equation is the security it offers in unstable regions of the world.

In some countries, cryptocurrency is more stable than the standard fiat currency. Even with regular market fluctuations of 10-15%, this still presents a better option than unstable fiat currencies which are prone to hyper-inflation; as evidenced in recent years in Zimbabwe where a hyper-inflation rate of 79 billion percent meant that a loaf of bread could only be bought with literally a suitcase full of banknotes.

Dash

The popular cryptocurrency payment platform, Dash, has identified Africa as a ripe market for the rollout of digital payment services, and has expanded their project into several African nations.

With recent PR campaign pushes in countries like Nigeria, Cameroon and Zimbabwe, Dash are seeking to become the standard cryptocurrency for remote workers in those regions. The company plan to continue their rollout across Africa, and in theory, there is no reason why Dash couldn’t be the cryptocurrency which unites a continent.

Several obstacles stand in the way, of course, like possible interference from hostile governments; the growing web of scammers that inevitably accompanies any economic growth, as well as the possibility of collective pools of freelance middle-men taking all the work and then farming it out at a profit.

One suggestion as to how to solve this last problem involves the creation of a cooperative platform made by workers and for the workers. If workers could control their own hiring platform, then they would be free of centralized authorities attempting to exploit their freelance earnings.

So far, no platform has adopted this philosophy, although crypto services like Ethlance and CanYa come very close.

Conclusion

The gig economy is often predicted as something that’s going to come in the future, but the truth is it’s already here.

The rise of the gig economy has serendipitously come at the same time as the rise of cryptocurrency – the two almost seem made for each other, and look to be joined at the hip from here on out.

Ultimately, when independent contractors become the norm, sites like PayPal and Upwork will have to adapt, or else risk losing out to their low-cost, decentralized, blockchain counterparts.

Blockchain technology has found multiple unexpected uses since its inception almost a decade ago, and now it could also end up being the tool that allows us to transition from the old world, into the modern one.