Blockchain is Helping to Restructure the Freelance Economy

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The last decade has witnessed a generational shift in the nature of work. The 9 to 5 daily grind, and the strain of “working for the man” are all being challenged as people embrace a new understanding of employment and work.

The 2008 global recession and the maturation and accessibly of technology, are the primary causes for this shift. When the global recession pushed unemployment over 10%, people weren’t content with relying on traditional work structures and started looking for alternatives. Powered by near-ubiquitous access to high-speed internet and affordable computing devices, these motivated individuals took matters into their own hands by creating a new understanding of work and income generation

The participants in this shift go by many names: freelancers, gig workers, and independent contractors, and are partaking in virtually every sector of the economy. Even now that the economy has improved and job growth is surging, it’s evident that things will not go back to the way they were. From Uber drivers to creative professionals, the independent lifestyle is on the rise.

The Scope of the Freelance Economy

According to Upwork, a prominent freelance exchange site, “Freelance workforce growth is accelerating and has outpaced overall U.S. workforce growth by 3x since 2014.” In addition, a January survey by NPR and Marist found that 1/5 of jobs in America are occupied by contract workers.

If this prodigious growth continues, freelancers will make up the majority of the workforce within ten years. Currently, there are more than 57 million freelancers in the U.S. alone, impacting virtually every industry.

Of course, that’s not to say that there aren’t drawbacks to freelance work.

The Limitations of Progress

Some worry that careers in freelancing offer less protection than traditional jobs at established companies. If the work dries up, freelancers can have a difficult time reestablishing income. Moreover, financial burdens like expensive independent insurance can sidetrack an independent worker’s growth potential.

However, many of the most pressing issues for freelancers aren’t limitations related to income projections or cost burdens. Freelancers are uniquely adept at deriving a profit from their skills and resources.

Instead, the most restrictive obstacles are mainly technical. Obstacles such as achieving contractual trust in a digital environment, acquiring technological resources, and the lack of compelling markets are hindering freelancers’ success.

Blockchain-Powered Solutions

These technical problems are mainly relating to difficulties in transactions, which means that blockchain is uniquely positioned to provide tangible solutions for freelancers. It’s already demonstrated its prowess in managing the millions of cryptocurrency transactions that take place every day, and it can create trust and certainty in an otherwise uncertain environment.

More specifically, here are three ways that blockchain is making an impact on the freelance economy.

Establishes Trust

Many freelancers find clients online, which means that they don’t have any direct, personal relationship with one another. Without that degree of trust, freelancers fret about payment viability and job posters worry about the quality of the final product. Blockchain’s smart contracts are a natural way to remedy that shortcoming.

With a smart contract, freelancers can set predetermined benchmarks for a project, and those checkpoints can be assigned a payment. In this way, freelancers don’t have worry about being compensated for work performed, and job posters have a level of quality control over the final product. Smart contracts are a working agreement between the two parties that eliminates the prerequisite of trust and allows everyone to operate with confidence.

Enhances Technological Capability

There are some tradeoffs when choosing an independent career. For instance, while freelancers have greater flexibility without the oversight of a big company or manager, they lack many of the resources afforded by a traditional office.

Blockchain can provide some of these capabilities through its decentralized network. For instance, Leonardo Render is a blockchain-based rendering service for creatives. This service offers high-speed rendering services for things like graphic design and video production. Using blockchain, freelance creatives can operate with the resources of a large company but on a budget of an independent worker. With this service, freelance creatives don’t have to invest in expensive GPU rigs to compete with workers with access to those resources from their company.

Provides Community

The freelance market is an increasingly crowded environment, so finding the right fit can be an arduous process. Currently, there are few comprehensive platforms for connecting independent workers with jobs, and none of them have the inherent benefits of blockchain technology.

With blockchain, freelancers can create smart contracts with job posters, automatically receive payment for their work, and store an unchangeable record of a person’s work history without using a middleman— to name just a few of its advantages.

In some ways, a freelancing career can seem less secure than a traditional job. Their schedules are frequently less established, and the prospect of continually finding work and mediating conflicts can be daunting for many. Fortunately, with more people freelancing than ever before, a deluge of services are emerging that connect freelancers with job postings. In addition, digital conflict mediation through services like JUR, a blockchain-based platform for conflict resolution and escrow deposits, can return a level of confidence and equity that surpasses that offered in a tradition work setting.

A Working Definition of Work

It’s clear that our understanding of work will continue to change and adapt. As more freelancers enter the fray, better resources will be required to make them a competitive and compelling option. Blockchain and its accompany decentralized platforms can help independent workers best compete and perform in this new definition of work.