{"id":7291,"date":"2024-10-22T14:41:42","date_gmt":"2024-10-22T18:41:42","guid":{"rendered":"https:\/\/coincentral.com\/?p=7291"},"modified":"2024-11-10T22:07:42","modified_gmt":"2024-11-11T03:07:42","slug":"blockchain-freelancing","status":"publish","type":"post","link":"https:\/\/coincentral.com\/blockchain-freelancing\/","title":{"rendered":"A Brief History of Modern Blockchain-Based Freelance"},"content":{"rendered":"

Freelancing was once perceived as island of misfit toys – people who were otherwise barred from the larger corporate workforce either by job qualifications, geographic location, or discriminations such as tattoo sleeves, or those crazy few that decided to start their own business.<\/span><\/p>\n

Today, the blossomed freelancing ecosystem has shaken up the traditional professional itinerary. <\/span><\/p>\n

Instead of working at the local restaurant or bar, college students are opting to monetize their nascent professional skills by programming or writing web content for $20-$45 an hour. It\u2019s no shocker that many in their early 20s are jumping on the <\/span>digital nomad rocketship<\/span><\/a> and traveling the world and making a full year\u2019s salary at their own pace and hours. <\/span><\/p>\n

A 2017 study by <\/span>Upwork<\/span><\/a> and <\/span>Freelancers Union<\/span><\/a> estimates that 57.3 million Americans (roughly 36% of the U.S. workforce) are freelancing in some capacity, and add $1.4 trillion to the economy every year, a jump of nearly 30% since 2016. Freelancing now encompasses 64 million Americans, making up 38% of the U.S. workforce\u2014a substantial increase from earlier estimates.<\/strong><\/span><\/p>\n

Extrapolating this current growth rate puts the majority of the U.S. into the freelance spectrum by 2027. <\/span><\/p>\n

Skilled professionals are entering the freelance economy to soften the blows of of post-gentrified San Francisco and New York City rent, if not to at least make a few extra dollars at $65-$150+\/hour. <\/span><\/p>\n

Internet-savvy labor-seekers all over the world is also able to earn a much higher wage in comparison to their native wages. Take this writer\u2019s motherland of Bulgaria, where the monthly minimum wage is about $290 USD (235.20 EUR). A simple web content gig that averages around $15\/hour at a typical 8-hour workday puts this employee at 12x the minimum wage line at $3,600\/month (2,900 EUR). That\u2019s a lot of <\/span>shkembe chorba <\/span><\/i>and Kamenitza beer. <\/span><\/p>\n

63% of freelancers<\/span><\/a> stated they freelance by choice, an 18% jump from 2014 to 2017. Additionally, 63% freelancers noted that they prefer the security of a diversified portfolio of clients rather than a single employer.<\/span><\/p>\n

\"Upwork
Image from Upwork<\/figcaption><\/figure>\n

The rise of the freelance economy and the seismic shift of talent gave birth to intermediaries that are able to make an absolute killing connecting freelancers and clients. <\/span><\/p>\n

Intermediaries such as Upwork, Toptal, and Fiverr act as talent marketplaces, escrow agents to release payment when the freelancers and clients mutually agree on the completion of work, and as a sort of search engine to place the \u201cTop Rated\u201d freelancers at the top of the new job listing suggestions.<\/span><\/p>\n

Upwork: Target Practice for Blockchain Startups<\/span><\/h2>\n

To put this opportunity in perspective, let\u2019s take a look at Upwork, one of the world’s most popular freelancing platforms.<\/span><\/p>\n

\"Upwork
Upwork’s home page.<\/figcaption><\/figure>\n

Upwork as we know it today was born in 2015 as a rebranding from the merge of Elance (founded 1999) and Odesk (founded 2003). With an estimated over <\/span>9 million registered users<\/span><\/a> (much fewer active) in 180 countries with over $1 billion in annual freelancer billings, Upwork is largely regarded as a pioneer of the freelance economy.<\/span><\/p>\n

Upwork makes for excellent target practice for blockchain startups because it has been able to accomplish what few freelance platforms have failed to do: create a trusted platform with a bustling ecosystem of active and satisfied users.\u00a0For every Upwork, there are dozens of terrible and scammy platforms charging higher fees without offering nearly the same experience as Upwork.<\/span><\/p>\n

Upwork acts as an intermediary and escrow agent and charges freelancers a fee on every transaction (20% up to $500, 10% from $500 to $10,000, 5% $10,000+, and clients a payment processing fee of 2.75%.)<\/strong> Upwork earns an estimated revenue of around <\/span>$68,826,417 per year,<\/span><\/a>\u00a0the majority of which comes from these fees.<\/p>\n

A single user making $65,000\/year from multiple clients on the Upwork is making Upwork anywhere from $3,250 to $13,000 every year with very little upkeep – not too shabby for an algorithm! <\/span><\/p>\n

Whatever human upkeep required for mediation and customer support happens via chat through Upwork\u2019s support staff, which is most likely a network of inexpensive scripted virtual assistants from around the world. <\/span><\/p>\n

Thousands of full-time freelancers with active rosters of clients and steady streams of work will happily express gratitude to Upwork for getting them started on their journey. The platform presents utopia for ambitious skilled talent with a penchant for taking full agency of their livelihood, setting their own hours and contract terms, and working wherever they choose – whether that be on a beach in Thailand or the coffee shop down the street from Mom\u2019s house.<\/span><\/p>\n

Unfortunately, all that glitters is not gold. Thousands of freelancers that put the full weight of their subsistence on the platform have complained of having the floor pulled from underneath them by unfair account freezes, reputation-shattering negative feedback from bad apple clients, as well as <\/span>notoriously bad<\/span><\/a> customer support. <\/span><\/p>\n

Even a pleasant experience with Upwork doesn\u2019t guarantee loyalty. <\/span>Freelancing is not without its expenses. Rent, food, health insurance, co-working spaces, plane tickets, and the vices that come with an essentially self-ostracizing career path add up. <\/span><\/p>\n

With freelancing also comes the imminent threat of one of your core clients falling through, leaving you staring down mounting fixed expenses and scrambling to make up the difference. <\/span><\/p>\n

At some point, freelancers need to make the business decision of whether having 10% to 20% of their paychecks going to an intermediary is worth it. That 10% to 20% could be the difference between a new car, a down payment on a home, or health insurance.\u00a0<\/span><\/p>\n

High fees are a huge reason why freelancing platforms like Upwork are seeing an exodus of their otherwise loyal users<\/strong> into off-site agreements where trust is hardly a factor with long-term clients they have become familiar with and from whom they can reliably expect work. <\/span><\/p>\n

Without a need for Upwork\u2019s core value proposition of trust, freelancers can shift their entire business to Gmail\/Skype and Paypal or crypto. Clients also don\u2019t mind using their own preferred methods of communication and saving on the 2.75% payment processing fee. <\/span><\/p>\n

What attracts millions of freelancers and clients to the platform is the concept of trust and the enforcement of it, a value proposition that has become existentially threatened by a \u201ctrustless\u201d blockchain. <\/span><\/p>\n

While freelancing platforms are already caught in a vice with their user retention dilemma, dozens of blockchain-based competitors offering a smart-contract solution have come out guns-blazing. <\/span><\/p>\n

The overhanging threat of disruption looms over any intermediary in a post-blockchain world, and the high traffic and easily monetizable freelancing economy is ripe for the taking.<\/span><\/p>\n

Steemit<\/span><\/a><\/h2>\n

Although Steemit wasn’t necessarily a platform for freelancers to connect with clients, it leapfrogged past the need for clients by offering content producers a means of monetizing their content. <\/span><\/p>\n

The typical engagement between web content freelancers and is as follows:\u00a0<\/span><\/p>\n

The traditional content monetization model involves leveraging content for traffic in hopes of generating advertising revenue or affiliate commission. <\/span>Digital marketing savvy entrepreneurs with an understanding of what sorts of content performs well, how it should be written, how it should be optimized for search engines, etc. hire freelancers to create the content.<\/span><\/em><\/p>\n

Freelancers receive a contract for something like \u201c24 Benefits of CBD Oil to Cure Your Hangovers\u201d and submit the article to the client for approval. If approved, the article goes live, and the clients utilize their skills to drive traffic to the content (or they hire someone that can). <\/span>Hundreds or thousands of interested users read the article. The site owner gets paid by the advertising revenue from AdWords, a commission from the affiliate links on the site, or other sorts of partnership deals. <\/span><\/em><\/p>\n

\"Steemit's
Steemit’s home page<\/figcaption><\/figure>\n

Steemit essentially cuts out the need for the intermediary client and allows freelancers to post their content on <\/span>https:\/\/steemit.com\/<\/span><\/a>, where users will read, comment, and engage with the content. <\/span><\/p>\n

The content creators are then rewarded in Steem in proportion to the number of people reading and engaging with it based on the amount of \u201cSteem Power Units\u201d of that particular user. <\/span><\/p>\n

The <\/span>Steemit platform<\/span><\/a> is architected to generate new units of \u201cSteem\u201d in order to keep the network running so that there will never be a need for third-party advertising or affiliate marketing to keep the lights on. <\/span><\/p>\n

Origin Protocol<\/span><\/a>:<\/span><\/h2>\n

The Origin Protocol seeks to decentralize the entire sharing economy and has the likes of Uber, Airbnb, Fiverr, and Getaround in its crosshairs. Although the scope of its mission is broader than the laser-focused freelancer model, it plays an arguably larger role in the conspiracy to undermine the entire sharing economy, which is estimated to grow to <\/span>$335 billion by 2025<\/span><\/a>. <\/span><\/p>\n

\"Origin
Origin Protocol’s home page.<\/figcaption><\/figure>\n

By using the Origin Protocol, businesses or individuals can conduct their operations on the decentralized web. CanYa, for example, is building their marketplace of services for the gig economy on the Origin Protocol. <\/span><\/p>\n

\"Origin<\/p>\n

To learn more, check out the <\/span>Origin Protocol<\/span><\/a> site and <\/span>whitepaper<\/span><\/a>. <\/span><\/p>\n

OpenBazaar<\/span><\/a>: <\/span><\/h2>\n

OpenBazaar is the world\u2019s largest decentralized marketplace and charges no platform fees.<\/span><\/p>\n

Spun out of the winning idea of a darknet marketplace of a Toronto hackathon in 2014, OpenBazaar was made to be completely peer-to-peer with no central controlling organization. <\/span><\/p>\n

\"OpenBazaar's
OpenBazaar’s home page.<\/figcaption><\/figure>\n

The founders then started a company called <\/span>OB1<\/span><\/a> with $1 million of venture capital investments from Union Square Ventures and Andreessen Horowitz. OB1 received a second round of investment for $3 million in the fall of 2016. <\/span><\/p>\n