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The gig economy is growing at a very fast pace, and the trend towards remote work and job flexibility is further strengthening it. By 2024, freelancers will make up more than a third of the global workforce, and this growth is promising. Companies like Upwork and Fiverr have grown by nearly 20% over five years in recent years.
Growth is always followed by some challenges, such as high transaction fees, payment delays, and intermediaries in general. These are the problems that blockchain technology has to solve, and decentralized solutions enable greater transparency, security, and efficiency in the freelance market.
At the heart of blockchain’s functionality is a distributed ledger that allows transactions to be recorded in a secure and transparent manner, with less need for intermediaries such as banks or freelance platforms. The decentralized nature of blockchain makes it especially valuable for freelancers who operate across borders and face hurdles related to payment and currency conversion systems.
Eliminate intermediaries: direct transactions and lower fees
Most traditional freelance platforms charge a 10-20% service fee, leaving less money in freelancers’ pockets. Other new blockchain-based platforms such as CryptoTask and Uwerx are also on the path with significantly lower fees. These platforms connect freelancers and clients directly through a decentralized network, bypassing expensive middlemen and saving costs for both parties. A 2024 study reviewed by bestcryptowallet.com shows that blockchain can actually reduce transaction fees by as much as 80%, depending on the application.
For example, freelancers using Ethereum or Stellar-based freelance platforms have smart contracts to send and receive payments for their work, and the fees typically associated with traditional payment gateways and freelance marketplaces are notorious. Less than 3% compared to the price. This significant reduction can be very helpful for small projects, as high service fees can unduly squeeze profits.
Smart contracts: Automate payments and ensure trust
A smart contract is a self-executing contract with terms and conditions written directly into the code. Smart contracts independently execute transactions whenever certain preset conditions are met, such as completing a project or meeting a set deadline. Such automation ensures that the payment process is free of risks due to late payments or doubts about contractual obligations.
In the gig economy, where payment issues are one of the most common friction points, smart contracts can help freelancers build trust with clients. Data from 2024 shows that disputes over payment processes were reported to be less severe on platforms that implemented smart contracts, with some platforms locking payments in escrow, similar to DeeLance. , which introduces the ability to be released only once the completed work has been verified. It occurred. This secure automatic payment system gives freelancers even more confidence when taking on projects, especially from overseas clients.
Decentralized Marketplace: Expanding Opportunities for Freelancers
Decentralized freelance marketplaces not only remove the middleman, but also create opportunities for freelancers to tap into a global pool of customers without facing geographic or regulatory barriers. These blockchain-based marketplaces offer a fairer system where freelancers can showcase their work, build a reputation through verifiable ratings, and receive payments in digital currencies.
Platforms like Ethlance and CryptoTask enable secure transactions and job reputation management on the blockchain, avoiding data manipulation and fake reviews by freelancers that are common on centralized platforms. In 2024, the use of blockchain for reputation verification is said to increase the number of freelancers who value transparency and permanence of their work records.
The use of NFTs is also gaining momentum in the areas of intellectual property and licensing.
This allows freelancers to tokenize their work through a secure and verifiable digital ownership mark. The system helps protect intellectual property while simplifying royalty payments to some extent, and provides an innovative way for creators and artists to securely monetize the content they produce.
Challenges and future prospects
Although blockchain offers some promising solutions, it is not without its challenges. For example, some freelancers may be deterred by the volatility of cryptocurrencies, the technical learning curve, and even the regulatory uncertainty associated with this technology. But on the other hand, the potential benefits, from increased efficiency to lower costs, improved payment security, and expanded global reach, are very attractive and are driving interest in blockchain-based freelancing solutions. and continues to promote development. With this in mind, blockchain technology is increasing the efficiency and transparency of the freelance economy. Therefore, the application of blockchain in the gig economy to reshape freelance work is likely to continue to grow in the near future, as the use of decentralized platforms by freelancers and clients to conduct their work increases. There is.
