Freelance and the blockchain03.05.2018
The structure and dynamics of the freelance market have changed drastically over the last five years. Previously, job seekers were interested in being employed through an employment contract but globalization, technological development and the increasing popularity of self-education have changed that. Of course, there always were professionals who were against scheduled work but only now this group has grown large enough to form its own layer on the labor market. These people create a demand for platforms where they can offer their services. There are certain advantages to freelance, like being relatively independent of your employers, no fixed office hours, the ability to choose when, where and who to work for.
Freelance work is not affected by borders and timezones and freelancers have no need for regular corporate culture; instead, they are defined by and increasingly dependent on their knowledge and competence. When looking for work, freelancers usually go to specialized platforms to search for tasks and projects. For all their advantages, however, such platforms have a number of disadvantages:
- centralization: rules, commissions and technical parameters can be changed without the consent of the users;
- no guarantee on both sides, the employer and the freelancer can’t be sure that all their requirements will be met;
- control restrictions and lack of a sophisticated milestones system;
- high transaction fees;
- lack of tools for effective communication between participants of the market;
- freelancers are disconnected from their professional communities;
- two-way deals only: teamwork is not supported by any of the platforms.
All of the aforementioned issues pinpoint the general direction that freelance platforms are headed: user-friendliness, transparency, security and financial profit. The need for these implementations is dictated by popular tendencies and the demands of such platforms’ users.
In this age of advanced technology and quality service users have somewhat inflated expectations. They like services to be bundled up in one place, easy to use and free (or very cheap – ideally, so the monetization is not visible to regular users, like in Facebook).
- With the increase in the number of freelancers, there are more cases of fraud or simply low quality work, which forces both sides (employers and freelancers) to seek more control and regulation.
- Technology is developing faster than educational programs, which forces more people to resort to self-education. By making high quality learning materials more accessible we could grow a generation of professional and responsible freelance workers. For this we would need to know what kind of materials are required – this can be done if the freelance platform itself accumulates data describing current market needs.
- There is an increasing number of young talented self-educated people on the market. Existing platforms don’t give them much of a chance since they can’t guarantee the quality of their work. Therefore, there is a need for more sophisticated tests and objective evaluation (something that professional communities should and can develop) that can prove that the contractor has a sufficient degree of knowledge.
- Teamwork: while in the past mostly small tasks were outsourced, nowadays teams of freelancers are given large projects. Existing freelance platforms, sadly, don’t tackle the issue of organizing teamwork.
There’s a new technology that can be put to use in the open freelance market – the blockchain. Blockchain consists of blocks of data that cannot be modified or erased.
Replicated decentralized databases were first introduced by the creators of Bitcoin. Not long afterwards this technology spread beyond cryptocurrency and is now being implemented in various fields. Blockchain’s stability, longevity and transparency are mainly valued in the financial sector. This technology is used by banks, tax agencies and investment firms to automate and speed up transactions and processes and make them cheaper. For example, implementing the distributed registry technology for land cadastres minimizes bureaucracy and the amount of paperwork greatly, while also helping prevent fraud on governmental level.
In 2017 digital technologies have become increasingly popular in the regulatory, copyright and management sectors, used for managing proprietary rights, ownership, operations with goods and raw materials, data, digital identity, authenticity checks, access privileges, e-voting and private and public management.
The freelance community is yet another sector that is soon to experience a wide-scale implementation of the blockchain technology. It should be noted that, along with the more regular platforms for freelancers, which are expensive and limited in functionality, a few decentralized services have emerged recently, that, nevertheless, could not comply with all of the requirements of the growing community. Development of UMKA started in mid-2017. UMKA is a multifunctional decentralized labor market platform that aims to satisfy all of the needs of employers, freelancers and educational institutions. Thanks to its many integrated tools, UMKA creates a comfortable space for employer-contractor interactions:
- Digital passport. The digital passport contains information about user’s skills and proficiencies, their work history and a list of completed courses. The digital passport makes it easy for employers to find freelancers with the desired skill set;
- Secure contracts using the unique AgileSC (Agile Smart Contracts) technology. Secure contracts are useful for making milestone payments, which makes managing difficult long-term projects easier. In case of unforeseen situations both parties can use the arbitration system to solve the issue;
- Arbitration system is a system for disputes’ settlement that arise on the platform. The Arbiter is another user of the system, a disinterested party with a sufficient rating on the platform.
- Project groups are for cooperation with groups of freelancers;
- GNMT – Google’s Neural Machine Translation integrated in UMKA’s chat engine to help users from different countries communicate freely;
- Integrated online courses – a useful bonus for the users of the system that allows them to take online courses from world’s leading universities and learn new skills. The result is recorded in their digital passport;
- Expert communities – communities and disputes that arise in the process of work are moderated by the users of the platform. Users, who have attained a certain rating can become Arbiters to participate in disputes, and also participate in the platform’s development by conveying the opinions of the masses.
The global freelance and remote employment market has been burgeoning in the recent years. More than a half of the US and European workforce will switch to freelance by 2027, not counting specialists from developing countries who make up a sizable portion of the freelancer community. These number only confirms the general idea that freelancers and employers need decentralized regulation on a platform that lets users take courses and learn new skills.