A study shows that nearly 6 out of 10 freelancers have had an experience with runaway clients that don’t pay for their work. And those clients that do pay end up delaying the payment for long such that by the time the freelancer receives the money, the value is less than what it was when the freelancer submitted the task.
These and many other problems are attributed to the centralization of payments. With freelancing payments centralized, issues arise whereby the freelancer loses money to scrupulous clients. This is why many freelancers opt for regulated platforms that assure them of getting paid on time.
This is where cryptocurrency comes in. You might know this as Bitcoin and Ether, which are some of the major types of cryptocurrency on the market. The use of cryptocurrency in trading has grown and continues to grow, but this hasn’t found its way to many freelance platforms. Many of these platforms still prefer to use the centralized payment systems. Today we look at how decentralization can help freelancing platforms to be more efficient.
Eliminate Fraud
The use of cryptocurrency in freelance transactions helps eliminate fraud. You can send and receive payments without the need for an intermediary such as a bank or any other financial institution. The blockchain technology, upon which all the cryptocurrencies are based, is decentralized, meaning that no person or institution can claim its ownership.
The blockchain is akin to a huge database that holds batches of individual transactions. All the batches have a timestamp and a link to a previous block. The blockchain works as a public ledger of transactions that are irreversible.
If you have had chargebacks before, then know that this technology does away with the ability of the client reversing any payment. Once you receive the payment, it is yours.
No Chances of Identity Theft
When you offer your credit card details to a merchant, you grant him full access to your credit line. He can get any amount from your card without your consent. Credit cards work on the “pull” basis, whereby the merchant initiates a payment without your involvement, going ahead to “pull” out the designated amount from your account.
On the other hand, cryptocurrency wallets only allow the owner to send out the amount to another wallet. The holder can only send the amount that he is expected to without divulging any further information.
Freelancers Get Paid Instantly
A few years ago, freelancers had to wait for weeks on end for their online payments to mature. Banks took a whole month to process the cash, and a successful process wasn’t guaranteed at all. This meant that the freelancers didn’t have access to their cash immediately, which led to a fluctuation in the value of the payment.
Banks have to involve a lot of third parties in deciding whether the cash is to be released to the freelancer or not. In many ways, the use of blockchain helps you bypass all the hurdles in payment processing. The process is fast, and as little as 20 minutes after payment, the freelancer has the payment in his wallet.
This is also possible at a fraction of the expense that the freelancer experiences when using traditional methods.
Access to Cryptocurrency is Global
Up to now, when the payment horizon is changing rapidly, some payment providers don’t allow some countries to use their services. They make it hard for freelancers in these countries to make a living just because they don’t provide payment services to the country for one reason or another.
With millions of freelancers spread across different freelancing platforms; the ideal payment system should provide them with a payment solution that allows all of them to get paid wherever they are.
Freelancers are people on the go; they can work anywhere at any time. With the digital age came the smartphones, which have made it easy to access online payment systems. The decentralized system should be able to take into consideration the use of smartphones. Take Content Hourlies, a freelance platform set to release the Content Hourlies Work token soon, listed on its roadmap is the development of a smartphone app that will make it easy for clients to send payment on the go and freelancers to access their payments as long as they have a smartphone with the app installed.
No Holds, No Limitations, No Freezing on Your Account
Do you know that apart from cryptocurrency there is no other payment system where your account is not in the hands of someone else? Some of the companies take it too far and will hold your money for no apparent reason. This is done brazenly without consulting you.
When this happens, it is you to go through the hoops necessary to get access to your funds.
Cryptocurrency works differently. You own a private key and the corresponding public key which makes up the wallet address. No one can take these keys from you unless you expose it to someone or you lose it.
Lowest Transaction Fees So Far
Some financial institutions charge on the upward of 10 percent of the payments, which means that if the freelancer makes $1000, they only get $900, and you haven’t included the exchange fees at the bank.
With lower fees, the freelancer can enjoy more value for his job. Even though transfer from one wallet to another is free, many users enlist the services of a third-party crypto exchange to process their funds to a mode they want. These services are likely to charge some fees for this service.
So, with blockchain, you make sure everyone is honest, and the traditional banking bureaucracy is removed. What you end up with is low costs, making sure that you get nearly all your hard-earned cash.
An Effective Store of Value
Many freelancers are looking for ways to grow their earnings and make it possible to make some side income. One of the ways to do this is to store the cryptocurrency and cash it out at a later date. Cryptocurrency has been referred to as “digital gold” because it appreciates over time.
Additionally, the worldwide acceptance of this currency is in such a way that there is a finite amount of the coins out there. This is part of the reason why the price of some cryptocurrency has hit the $10,000 mark before.
This currency has many advantages over other gold and precious metals in that you don’t need to have physical storage space to keep them — all you need is that wallet on your computer, thumb drive or smartphone. You don’t need to pay for safe deposit boxes in a bank to store your earnings.
The Bottom-line
You are looking at a prospective payment platform that will make it easy for freelancers and clients to transact. With cryptocurrency, you have a platform that allows your clients to pay faster, and your clients to get their payments in full, albeit a small fee. With decentralization comes more power to the clients who seek to pay their freelancers once and move on to another task.
No chargebacks, faster processing, fewer players and above all, a smooth transaction process makes the use of cryptocurrency in freelancing platforms a practice that is way overdue.