By Peter Dendis
The Internet has completely changed the nature of freelance work. Nowadays, freelance workers in all fields, from web design to search engine optimization, are able to travel the world, sign up for job boards and gig websites like Fiverr and Pro Blogger to find opportunities. that fit their strengths. And all this can be done using their laptops.
The simple influx of coworking spaces testifies to the number of people who are progressively moving towards independent work, choosing to live in cheaper cities all over the world while remaining in contact with their employers. However, the physical distance between the contractor and the employer often results in cheated contracts and payment waste after the freelancer has completed a project.
Nobody wants to work hard on a project just to be phantom or denied payment later. Some types of scams include the partial payment scam, the single job sample scam and the revenue sharing scam. Through the blockchain, freelancers are able to create smart contracts, consolidate their reputation and use micropayments and smart transactions to create a more equitable work environment. Let's take a look at how the blockchain facilitates these solutions.
Creation of smart contracts
An intelligent contract is software that contains all the terms of the agreement between two parties. Check the contract automatically and then execute the terms of the contract. Instead of putting trust in a centralized system that empowers one party, all parties involved can feel secure knowing that they are doing transactions on the decentralized blockchain system, which provides equity and equality.
In the case of a freelancer who uses the blockchain, the contract would be paid in a cryptocurrency designated upon completion of the project. This also means that both parties will be able to access the smart contract, as it will be stored on the blockchain. Just like traditional centralized systems, the smart contract can automatically issue payments when authorized. This can be done when milestones are reached or when the project is completed.
In addition, the blockchain can archive events in each contract in chronological order, which means that past contracts can be consulted and reviewed and provide proof that the contract has been completed. Furthermore, the system continues to function properly if a party abandons the contract (in the case of multiple parties involved).
Solidifying Reputation of freelancers
Any freelancer will testify the importance of building a good reputation in their field. In fact, as a freelancer, reaching the point where your reputation is known in the industry could take years. That's why it's a blow when freelancers realize that their reputation can be hacked and manipulated in the form of identity theft.
The beauty of blockchain comes from the fact that it stores information on multiple systems in various locations, instead of having everything in one centralized location. With the addition of public and private keys, the information stored on the blockchain is practically unattainable.
Through the blockchain, you can develop an app that aggregates the reputation of a company or freelancer. If one side has a negative score based on the timely delivery of the project or how it treats its employees, this could be a significant factor in deciding whether the freelancer decides to work with the company or vice versa.
Glassdoor, for example, provides information on the work environment in specific companies, from salary to management. If such an app were developed, where reputation was aggregated to both the employer and the employee, this would provide a much more transparent recruitment process for everyone. A website similar to Upwork, for example, with the ability to review freelancers and employers, but on the blockchain. Freelancers should not worry about the "scam champion job", in which candidates are invited to submit a sample article in their application and subsequently rejected – giving the company a free piece on which freelance has worked hard. Companies would also be aware of the numerous scams to which freelancers are subject.
Micropayment Systems and Smart Transactions
The standard model for online monetary transactions requires that payments go through another group of hands between the employer and the employee. The blockchain aims to change this with intelligent transactions and micropayments.
With the involvement of third parties, there are almost always commissions commissioned to any transaction. This is why, when dealing with small amounts, online transactions become expensive. Meanwhile, cryptocurrencies like Bitcoin have the potential to be used in immediate micropayments. For example, if the employer is based in the United States and the freelancer is working outside Australia, the transaction may take days to complete. However, payment via blockchain allows you to complete the transaction in seconds.
In 2016, the Commonwealth Bank of Australia and Wells Fargo used the blockchain to transport cotton from Texas to China. This was considered the first global transaction on the blockchain and consolidated its potential worldwide. The blockchain is able to record any exchange, whether it be money, property ownership or a domain name, and much more. Monetary transactions are recorded securely, which is why major organizations have already started using blockchain for these purposes.
Since its invention in 2008, the blockchain has been consistently introduced as a solution to many problems in our modern world, such as applications in healthcare, transportation and smart cities. If properly implemented, it could also help the freelance sector, providing a safer environment for all parties involved. One thing is certain, companies and freelancers are realizing that the blockchain could solve many of the current disadvantages of long-distance trade agreements.
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