2 Major Problems in the Gig Economy that Blockchain and Smart Contracts Will Solve
Have you ever hired a freelancer through a website such as Fiverr.com or Freelancer.com and the quality of the work was less then you bargained for? You are not alone. While a global marketplace has allowed for cheaper products and services as well as the exchange of ideas and technology, you lose the ability to meet a prospective freelancer before you sign a contract. Blockchain and Smart Contracts could be the solution.Trade will not occur unless there is a fundamental layer of trust between the two parties – the freelancer provides a satisfactory product or service and, in exchange, you give her or him currency with purchasing power. So how has the global marketplace attempted to restore trust between the parties if a relationship cannot be formed beforehand?. Freelancers provide examples of previous work and reviews from prior clients.. Employers provide payment upfront that is released to the Freelancer after successful completion of the task.. A trusted Third-Party connects the freelancer with the employer, facilitates the exchange of funds, and handles minor disputes.
What are the 2 major problems that still exist in the online gig economy? . The Third-Party charges up to 30% to connect the freelancer with the employer, facilitate the exchange of funds, and handle minor disputes.. The Freelancer’s prior work and clients cannot be verified; a lack of trust still exists.How will blockchain solve the problems with the online gig economy? Smart contracts and Blockchain will eliminate the need for a third party to facilitate the exchange of funds and handle minor disputes. Blockchain and smart contracts will surely lower the transaction cost; however, it won’t solve the issue of connecting freelancers with employers.Additionally, Blockchain will keep a verified record of a Freelancer’s past contracts that can be shared with prospective Employers. The Freelancer’s diplomas and other certifications can be verified through the Blockchain. The Blockchain will create a new level of trust in the system where Employers can be sure that they will receive quality work and Freelancers can be sure that they will get paid.
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