The Future “Gig Economy”
A study by PwC predicted that by 2030, the number
of U.S. workers in “full-time” employment will drop to 9 percent, meaning that
the other 91 percent of U.S. workers will be searching for independent
contractor employment in what has become known as the “gig economy.”
contracting includes any temporary or impermanent arrangement between two
parties that doesn’t involve the traditional full-workday commitment, like
driving for Uber or freelancing on UpWork. As of this year, 35 percent of the U.S. workforce, or roughly 55 million people,
already participate in the gig economy as independent contractors.
as an incumbent social network for the professional world, is well positioned
to serve this economy. LinkedIn already serves as a portal for a network of 500
employers and employees and boasts more than 10 million active job posts.
People already “LinkedIn” each other. Similar to Uber or Google, LinkedIn has
achieved verb status with business professionals worldwide.
as U.S. workers transition from full-time employment to the gig economy,
blockchain-based startups will vie for the lucrative chance to serve as the
base layer of the economy.
Gig Economy Requirements
the gig economy requires an underlying layer of trust, it is a fantastic place
for decentralized startups to innovate and create “trustless” (trust enforced
through code) environments. After all, contractors and clients will be in a
constant search for one another.
context of the gig economy, there are two key features that contractors
(employees) and the clients (employers) will look for:
work history: To stand out from their competition, contractors need
to highlight prior relevant working experience, showcase their education
and highlight relevant awards and achievements.
- Fair compensation:
If contractors use a service such as LinkedIn ProFinder, Freelancer.com or
UpWork to match with a client, they need to be certain that the client
will pay upon the work’s successful completion.
work history: Clients must validate their prospective contractor’s
work history, educational background and awards. If the contractor boasts
an impressive 4.0 GPA from Harvard, a Ph.D. from Stanford and five years of
work at Google, the client still needs to verify these claims before
hiring the candidate for a computer science role.
- Fair compensation:
Clients pay contractors to deliver the excellent product or service
the contractor advertised. Thus, they only want to pay when contractors
successfully execute on their deliverables. Regardless of whether these
deliverables are paid with key milestones or in one lump sum, clients
don’t want to get scammed by fraudulent contractors.
utilizing blockchain-based protocols, startups will help connect gig economy
contractors with clients while verifying workers’ resumes, protecting personal
data and utilizing smart contracts for fair compensation.
Verified Work History
utilizing a blockchain-based data storage solution, employees could store
verified employment history, resumes, references and educational background in
an unchangeable, transparent ledger.
example, consider Karen, a recent computer science graduate from the University
of Pennsylvania working as an independent contractor, and Martha, a client from
London looking to hire Karen to develop a website.
blockchain-based jobs database profile, Karen lists her degree and 3.8 GPA from
the University of Pennsylvania, a recommendation submitted by her boss during a
Facebook internship, a national award for student leadership and three five-star
reviews from other clients Karen has built websites for.
allowing Karen to submit her profile, the blockchain-based jobs database
compared Karen’s submissions to certify authenticity (for this example, assume
that there are other mechanisms in place to ensure the validity of data entered
onto the blockchain and that all information added into the blockchain is 100
percent accurate). Once the blockchain-based jobs database authenticates
Karen’s profile, her information is permanently added to the blockchain.
Martha opens Karen’s profile, she can be sure of Karen’s claims because they
are guaranteed to be unchangeable due to blockchain technology’s immutability.
Martha saves the cumbersome time it would take her to do a deep-dive background
search on Karen because she trusts that all information uploaded to the blockchain
is preverified and cannot be tampered with. Therefore, she is able to trust the
five-star recommendations and recommendation by Karen’s boss at Facebook.
“smart contracts” (contracts converted to computer code) enable contractors and
clients to engage in “trustless” agreements, meaning that no mutual trust is
required because computer code automatically enforces their agreement.
the Karen and Martha engagement from the previous example. After reviewing
Karen’s verified, immutable profile on the blockchain-based jobs database,
Martha decides to hire her to develop a website for $900.
and Karen agree to break the engagement down into three key milestones. At each
milestone, Martha is required to pay Karen for her work only if she
successfully completes it to Martha’s specifications. This agreement is translated
into a “smart contract” and entered into the blockchain. Once entered, both
parties can rest assured knowing that it cannot be changed (unless there is a mutual
agreement to end the current smart contract and agree on a new one).
the base-layer infrastructure of the gig economy, LinkedIn can
pre-decentralize, leveraging already existing blockchain projects tied to an
internal API. LinkedIn can develop this blockchain-based infrastructure for the
“gig economy” in a secret R&D spinout that is compliant with Microsoft
shareholders’ regimes and only reveals the database if the company is challenged by decentralized startups in the
an individual’s work history on LinkedIn, blockchain-based protocols already in
the works can be leveraged, such as the Civic identity protocol to verify
self-sovereign identity and the Factom blockchain to secure immutable
digital copies of transcripts or employment verifications.
(assuming scalability issues are solved) LinkedIn can build its smart contract
compensation system on top of Ethereum, instead of creating its own private
LinkedIn choose to optimize its aforementioned services for the gig economy
with blockchain technology, it could successfully address the needs of both
contractors and clients and position its portal as the bedrock of the future
gig economy. In other words, the company has the potential to resist startups
and capture 91 percent of future U.S. labor transactions, as well as
Companies such as LinkedIn that might pre-decentralize and create
blockchain-based R&D spinoffs of their product for future use (if
necessary) have an advantage over current blockchain-based startups and could
use this tactic to survive in a future in which consumers value