(Blokt) Cryptocurrency Could Make the Gig Economy Safer
By Ali Raza - March 22, 2018
Companies are offering payment guarantees via smart contracts and hedging funds upon the completion of work.
The times are changing. This sentiment is true in every facet of the economy. As technology creeps more steadily into every aspect of our lives, it enables an increasing number of workers to enter the workforce either remotely, or in the gig economy. Freelancers have been in existence forever, but now enterprising individuals can do almost anything they want from home, be it code development, customer service, design, writing, or virtual assistants.
Millenials are even further connected to the internet, and that means members of that generation are more likely than any other to enter the freelance space. The freedom offered by the gig economy, to work when, where and how you want to, is incredibly enticing. Working from home has become a common goal.
Problems with working gigs, crypto solutions
One of the major downsides to this work, however, is getting paid. Or, not getting paid, as it were. Some clients just don’t pony up the cash, as agreed. Others are not willing to pay a fair wage to their freelancer. The blockchain could solve some of these problems.
Startup companies are targeting this market niche. Companies are offering payment guarantees upon the completion of work via smart contracts and funds. Two examples of upstarts looking to help the gig economy thrive are Latium and Bitwage.
Latium will be released sometime this year and will allow workers to get paid directly through the Latium app via start contracts. Services eligible to sign up with Latium run the gamut from dog walking to delivery services, and presumably beyond. Larger employers are already using cryptocurrency to pay workers that wish to opt in.
Bitwage has already attracted the likes of employees from Google, Facebook, Netflix, Airbnb, Uber and even the US Navy, who are using the Bitwage system to receive their wages.
Problems with crypto, gig solutions
Where these types of solutions might ensure that workers get paid, they present another problem. The crypto market is intensely volatile, so while workers get a wage, there is no guarantee as to what that wage is worth in fiat cash. Also, setting prices would be difficult, as freelancers would either have to do so in fiat cash or keep up with the continually changing crypto exchange rates.
Furthermore, being paid in Bitcoin or Ether, et al., presents difficulties in reporting taxable income. Taxes paid on crypto holdings are somewhat the same as any holding, but in the US at least, crypto assets are treated as property, not money.
Some say that the gig economy is the perfect place to weather the storm of fluctuating currency though. Freelancers are used to having ups and downs in their income, as client contracts end and there are often gaps between jobs. A freelancer living this sort of lifestyle, which already accounts for unstable income, may do quite well being paid in crypto.
Additionally, gig workers have already shed most of the constructs of traditional work, so having a currency that is non-traditional, and flexible to their situation, might be just what is needed. Consider the freelancer that also travels a lot, funds in cryptocurrency would always be available in a way that funds in a traditional bank may not be.
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Image taken from Blokt.