The gig economy is strong and growing; 53 million freelancers are hard at work in the US, making up over a third of the national workforce. These workers contribute $715 billion to the economy. Freelancers will comprise over 50 percent of the US workforce by 2020 if current growth rates continue.
Technological advancements have been huge growth drivers in the freelance economy. Much as the rise of smartphones and apps have allowed the creation of the Uber contractor-driver system, online platforms currently compete to attract reputable clients and high-quality talent. But while online platforms have provided freelancers with many new opportunities to make connections, they are still riddled with problems that make finding reliable talent difficult for employers.
This is an especially frustrating scenario for talented and diligent freelancers, who have a harder time standing out in crowded and troubled platforms. A freelancing-oriented HR platform called Boon is launching what might just be the first freelancing platform to get it right, and their secret weapon is blockchain.
Boon Coin and Boon Dollars
The Boon platform is founded on the principle that contributors to digital ecosystems create value in that ecosystem, and deserve to be rewarded for it. Some economists already speculate whether Facebook should be paying its users, as they’re the ones generating content that brings Facebook its revenue. In environments such as job platforms, where stakes are even higher for encouraging good behavior, it’s even more important to recognize that contributors, and especially responsible contributors, create value for the entire platform.
This is why the Boon platform runs on Boon Coins. These Ethereum-based dedicated cryptocurrencies are distributed to responsible platform contributors. Following-up on bids and messages promptly, minimizing cancellations and late payments, validating transactions for the platform, and reporting misuse and abuse are all behaviors that are rewarded with Boon Coin.
Entrepreneurs–the Boon term for anyone hiring a freelancer–set their project budgets on the platform in Boon Dollars. Boon Dollars are a separate (but closely related) platform-specific token designed to introduce stability and liquidity into the Boon digital platform. No one wants to receive a payment in a cryptocurrency that’s just dropped in value by 50 percent overnight, especially if that payment represents a major element of their freelance income stream. Boon Dollars and Boon Coins can be converted back and forth, but Boon Dollars will not see the same fluctuations in value as other ICOs and popular cryptocurrencies have experienced over the past six months.
Fighting Scammers and Incentivizing Good Behavior
In the early days of online freelancing, hirers and contractors found each other through referrals, digital classified ads, and placement services. The wider net a freelancer or hirer casts–seeking, for example, international partners who didn’t necessarily have work references that could be verified within their immediate industry network–the fewer protections were in place for each party involved.
There were few ways to ensure that work and payment agreements were carried out by each side, or even to verify that everyone involved was indeed who they said they were. Unfortunately, scammers still thrive on older job platforms such as Craigslist. The Balance recently listed several “fake job” scams that thrive on Craigslist and elsewhere even now.
It seems like newer and more sophisticated freelance job platforms would be immune to this kind of bad behavior, right? Unfortunately, scams thrive on these platforms.
Popular website Fiverr, for example, suffers from an influx of cheap and plagiarized logo designs, while Upwork has been home to identity thieves pretending to be more successful freelancers to attract work. But not everyone acting badly on a freelance platform is a scammer: sometimes they’re paying late, turning in work late, canceling arrangements, or otherwise behaving in ways that devalue the reliability of the entire platform.
When platforms lose this value, they gradually go under as diligent freelancers and employers go elsewhere. But successful freelance platforms sometimes face similar exoduses of talent: if a quality freelancer and hirer form a good working relationship, they may withdraw that relationship from the platform and conduct it privately, which means vital contributions such as ratings and work history that could be building the platform aren’t being inputted.
Boon protects against these behaviors by leveraging the security and immutability of blockchain. Smart contracts help hirers and workers make clear arrangements. Funds are held in escrow whenever arrangements are initiated, and parties have to hold a minimum balance in Boon Coin to participate in the system.
These arrangements further incentivize good behavior, in addition to the promise of Boon Coin rewards that can be transferred to stable and liquefiable Boon Dollars. This ecosystem means that freelancers and hirers alike are encouraged to contribute to the platform in a meaningful way.
Not only is bad behavior punished, but good behavior and strong relationships are rewarded with platform-specific incentives such as Boon Coins and positive work history, encouraging quality freelancers and hirers alike to continue forging relationships on the Boon platform.
How could Boon change your company’s freelance hiring practices?Opinions expressed here by Contributors are their own.