If you work in content creation or online marketing, you’ve probably heard of online freelance marketplaces. However, as new payment methods emerge, even the top online marketplaces will also need to adapt.
Cryptocurrency has been around for a while, but its impact on the freelance marketplace is only now becoming apparent. The freelance landscape is changing to accommodate the growing awareness of the potential of cryptocurrency and blockchain technology.
This also occurred when online payment methods were first introduced to the public. Previously, credit cards were the preferred method, but now most people prefer online payment options, such as PayPal.
With cryptocurrency on the rise, it is only a matter of time before these digital currencies become commonplace.
The Current Freelance Market Landscape
In the United States alone, there are 70.4 million freelancers.
Most freelancers use online marketplaces to find work for various reasons, such as to save money for an emergency fund, pay taxes, consolidate debt, go on vacation, etc.
It’s a massive market that’s only growing and hungry for new ways to connect.
The Difficulties of the Online Freelance Marketplace
The current freelance platforms face several difficulties, including problems with credibility, payment delays, the reliability factor, and sharing earnings with middlemen.
The main issue with online freelance platforms has to be fee splitting with the middleman. Some websites also charge exorbitant withdrawal fees. As a result, freelancers who want to work for a long time and companies that want to use these platforms’ services must pay a large fee that is a portion of their hard-earned money.
However, in blockchain-based marketplaces, control is typically distributed amongst users. There will be fewer and no withdrawal fees, which are currently another major issue in the traditional operation of other marketplaces.
5 Potential Changes Cryptocurrency Could Bring In Freelance Marketplaces
Blockchain technology has already begun to impact money transfers, banking, and other areas. This technology powers cryptocurrencies like bitcoin.
Aside from these, it has begun to affect the freelance market. These are the primary ways in which cryptocurrency will change the freelance marketplace landscape –
1. Cryptocurrency payments will be faster and more efficient
The majority of freelancers desire faster payment for their freelance work. This makes sense because many online freelance marketplaces have the issue of a client approving payment and then waiting a few days for the money to be transferred to the freelancer’s account. At times, the entire process can take weeks.
Payments in cryptocurrency are instant, even when made internationally. Since they won’t have to wait for their money for weeks if cryptocurrency becomes widely used, freelancers will benefit significantly from it. They can withdraw their funds as soon as they are approved.
2. The level of trust between employers and freelancers will increase
Trust has to be one of the most significant issues for employers and freelancers on online marketplaces. The entire system must suffer due to the unfair actions of a few freelancers and employers.
Crypto tokens are digital assets built on an existing blockchain (via smart contracts) that can serve various functions, ranging from representing a physical object to granting access to platform-specific services and features.
Crypto-tokens can be used to incentivize everyone to always act reasonably and professionally as the value of reputation in an online freelance marketplace is significant.
Freelancers can also use blockchain to store their portfolio and profile data, which can be copyrighted.
3. Middleman fees will decrease
Blockchain is likely to be bad news for middlemen across the economy. Because users can contact each other directly, the value of the middleman will diminish.
As a result, the middleman’s fees will simultaneously decrease, saving users significant money in the long run.
This can help with some financial problems that probably led people to start freelancing, like paying off a mortgage, making more money overall, etc.
4. Reduced or no transfer fee
The workflow has no bounds in the online freelance market. However, it does when it comes to money transfer fees.
Because there is no third-party control with blockchain, money can be easily transferred with a lower or no fee.
5. The transactions will be safe
One of the best attributes of blockchain is the ability to store a huge number of transactions and contract data in a secure environment. Agreements between freelancers and their clients can become a permanent record that is difficult to breach or compromise.
Benefits of the shift cryptocurrencies will make in the freelance markets
- Cash in their wallets faster.
- Lower fees mean freelancers can either increase profits or reduce their rates to be more competitive.
- The unbanked billions can begin participating in the freelancer economy.
- Because they have less centralized control, their business and income are safer and cannot be unfairly held.
Benefits for employers
- With lower fees, freelancers will likely lower their rates to remain competitive, resulting in significantly cheaper freelancers.
- Using the blockchain and leveraging smart contracts and tokenized incentives will result in less risk during the hiring process and higher-quality work.
Bitcoin has undoubtedly had an impact on the market, affecting a variety of niches, including the freelance market. Many blockchain-based job marketplaces, such as Ethlance, are gaining popularity, indicating that blockchain technology is here to stay.
Author Bio: Attorney Loretta Kilday has more than 36 years of litigation and transactional experience, specializing in business, collection, and family law. She frequently writes on various financial and legal matters. She is a graduate of DePaul University with a Juris Doctor degree and a spokesperson for Debt Consolidation Care (DebtCC) online debt relief forum. Please connect with her on LinkedIn for further information.
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