The freelancing eco-system has come of age over the past decade. Originally, the users of these global contractor job sites were considered “misfits” or outcasts from the corporate mainstream, but the “digital nomad rocketship” has taken flight. In the U.S. alone, recent studies peg 36% of the U.S. workforce, some 57 million people, as freelancers, earning a few extra bucks on the side and adding $1.4 trillion to the economy. The phenomena, however, is global, which is where cryptos can play a role.
Yes, cryptos and blockchain technology have much to offer this fellow “nascent” industry. From smart contracts to more secure and lower cost payment methodologies, cryptos and freelancing portals seem to be a match made in heaven, not to mention that many of these sites are searching for blockchain programming talent, as well.
This growing eco-system seems to match the nature of a globally inter-connected economy, as well. According to CoinCentral:
63% of freelancers stated they freelance by choice, an 18% jump from 2014 to 2017. Additionally, 63% of freelancers noted that they prefer the security of a diversified portfolio of clients rather than a single employer.
Who are these specialized websites?
The rise of this economy has spawned the growth of a host of intermediaries that connect freelancers with potential clients. Whereas the early entrants may have been Guru and Freelancer, the market has broadened significantly. Newer names like Upwork, Toptal, Fiverr, and PeopleperHour now proliferate the space. Upwork is a merger of two older systems, but it has over 9 million registered users in 180 countries with annual turnover of $1 billion in user billings.
These “find-a-job-and-bid” websites are highly competitive, not cheap, and not without risk, but blockchain technology and cryptos can make the experience better. Smart contracts offer an easy way to set up payment agreements between parties and allow the “escrow agent” to quickly approve items for payment, but what about getting paid in Bitcoin?
What does a freelancer need to know, i.e., the Pros and the Cons?
- Low Cost Cross-border Payments: Bitcoin and its blockchain platform were made for the cross-border payment market. Banks are out of the picture. No conversion fees, markups, etc., just a small transaction fee;
- More Efficient and Secure: The blockchain is secure, and transfers are instantaneous, although confirmations can take minutes or sometimes an hour or two, but it runs circles around waiting two days or more with banks;
- Expanded Access to Jobs: Freelance job websites are shifting to newer technologies for similar reasons. There are also a number of blockchain startups that are entering the fray, as well. As this shift occurs, it behooves everyone to get on board the train and broaden their access horizons.
- Bitcoin Volatility: Bitcoin and its altcoin brethren are known for their volatility in the marketplace. As the eco-system matures, however, volatility will moderate. You may need to understand investments and when the best times are to close a position, since your payments could go up or down in value over time;
- Converting to Fiat: Eventually you will want to convert your payments to your domestic fiat currency. If your exchange is located in your country, then the cost will be minimal, but if your exchange is overseas, you may incur banking fees;
- Tax Liabilities: Depending on your taxing jurisdiction, being paid in Bitcoin can require more recordkeeping, if the payments are taxable. You will need to have the date, amount, and conversion rate to fiat currency on payment date in order to report and determine your ultimate tax liability.
Will blockchain driven freelancer-platforms dominate the future?
This technology has the potential to make the process more efficient and, thereby, cheaper, but the status quo might resist too much innovation too quickly. In any event, disruptive technologies have a way of making the world a better place. It just takes time.