Creating Safer Working Environment For Freelancers Using Blockchain
Blockchain: Nowadays freelancers are everywhere completing more than half of the work compared to high-level multinational companies. From developing software and designing sites and also with ethical hacking freelancers are earning more than a regular employee. With the advent of freelancing sites like Fiverr, UrbanPro and many other freelancing sites more work is being dumped with them.
But the problem arises in the last stage of the work and that is in the payment stage. All the major freelancing sites will take a cut in the project according to their payment strategies and send the remaining amount to the freelancer. If the work is from outside also the payment systems like PayPal, Payoneer, Stripe they also take a minimum cut and pay them. So here comes the blockchain technology to solve all these problems.
How Blockchain Solves the Freelancer’s Problem:
As said above, to solve this blockchain has the perfect solution. Blockchain itself is the well-ordered list of transaction blocks that can be well kept in a simple database. Every block within the blockchain is termed as hash and with this hashes, it creates the algorithm. With this algorithm, working will process all the money transactions and the freelancer can get the money on their account.
This is possible with Smart contract software in the blockchain technology and it plays a major role in performing the transactions.
What is Smart Contract:
A smart contract is a piece of software in which a computer code is running on a top of blockchains containing a set of rules between two parties. If two parties come to an agreement and agree with all set of predefined rules then the agreement is automatically enforced. It will automatically verify and starts the negotiation of an agreement or transaction. It has a simple mechanism involving digital assets and one or more parties will deposit assets in the smart contracts and they are equally redistributed among the parties with the formula which is initiated at the time of starting the contract.
Image Source: Code Brahma
A smart contract radically decreases the transactional costs. Whether it is at the time of enforcing the agreement or formalization or in the stage of creating the agreement. A smart contract is between the persons, institutes and also between the assets they own. A transaction or agreement have the set of predefined rules which are in digital form and in a machine-readable language and they are executed by a computer or a set of computers in a network as soon as both the parties come to an agreement.
Smart contracts are self-verifying, Self-executing and tamper-proof also. It will turn all legal obligations are executed automatically as they turn them into self-executing processes. They are more secured and reduce the operating costs also. For example, if A wants to hire B for a specific work they need to agree on the set of pre-defined rules in the smart contract and transaction is started immediately. They need not rely on third parties for the trust factor. With Blockchain’s and smart contracts, you don’t need trusted intermediaries for clearing or settling the transactions.
The payment is done when the other party reaches a milestone or at the end of the project as agreed on the contract. On a blockchain, all involved parties are on a blockchain a smart contract with the set of all predefined set of rules will take place. If A has hired B using a smart contract on blockchain the transaction would be verified by each node in the network to see whether if A is the owner and he has required amount in his account. If all the conditions are true and B gets the access code for the smart lock and blockchain identifies A as the owner and B will get the transactional amount from A through this transaction and here no more middlemen are involved.
On blockchain, it will check who is the rightful owner of an account and also sees whether the set of pre-defined rules are accepted then the transaction is carried out in a transparent way. This will give more safety to the transaction as there are smart keys involved for granting access control verified on the blockchain to unlock it.
Smart Contracts are explained simply in the below video
Freelancers can also store their work and portfolio on blockchain so that they can have a solid proof of what they have done and what they are doing. All owners are credited with the copyright issues and there is no chance for disputes. When a dispute arises it will be solved easily as all the data is stored securely.
Money transfers will become cheaper between two parties. According to world trade bank, the transactional charges are averaged around 45% globally. This will be reduced radically if blockchain enters. As there are no third parties included in the transactions the transactional fees become zero and it will be transferred with maximum security.
Freelancers will have Profile portability and authenticity. Blockchain will give them the full control and governance of their profile data, credentials and reviews. This will give them a facility to share them across all platforms easily throughout all marketplaces saving their time and money.
Through blockchain, an app could be developed which aggregates the reputation of a business or a freelancer. If the negative score is more in the project delivery for a freelancer or if an institution has a negative score based on how they treat their employees, it would be a significant factor in deciding the projects. If a freelancer or an institution has more positive reviews then they will be more benefitted through this.
So in the end blockchain will have more benefits and provide a safer environment for the freelancers. As it is in early developing stages more features will be added and it becomes safer and easier by using blockchain.