Freelancing has become a significant part of the global job market in recent years. As traditional job roles evolve, more people are choosing freelance work to have flexible schedules and diverse income streams.
One pressing issue that freelancers face is the hassle associated with receiving payments, however. Traditional banking methods and online payment platforms often involve high fees and may not be accessible to freelancers in all parts of the world. That’s where cryptocurrencies like Bitcoin and Ethereum are stepping in to offer an alternative that addresses some of these limitations.
The Rise of Freelancing Globally
The digital age has made freelancing easier and more accessible. From graphic designers in the United States to software developers in India, freelance work is no longer confined by geographic boundaries.
According to World Bank nearly 1.57 billion people worldwide are engaged in freelance work. This isn’t surprising, especially when you consider that in the Asia Pacific alone, nearly 85% of hiring managers are choosing to outsource to freelancers.
The market for freelance platforms has grown accordingly, now valued at around $3.39 billion globally.
Interestingly, the freelance workforce skews young, with nearly 70% of freelancers being 35 years old or younger, according to Payoneer data. This could suggest that younger generations are more open to non-traditional forms of employment, further emphasizing how freelancing is becoming a mainstay in today’s work environment.
However, this vast global reach also brings its own set of challenges, particularly when it comes to receiving payments.
The Limitations and Fees Associated With Traditional Banking and Payment Platforms
Freelancers often have to deal with expensive international fees when using traditional banking systems. For instance, wire transfer fees can be quite high, not to mention the currency exchange rates that often favor the banks rather than the individual.
On top of that, online payment platforms like PayPal also take a cut, which can add up quite significantly over time.
For freelancers in economically disadvantaged areas, these fees can take a significant portion of their income. Cryptocurrencies offer a way to circumvent these high costs, making it easier for freelancers to get paid no matter where they are located.
Financial Advantages of Crypto over Traditional Banking
One of the main financial benefits of using cryptocurrencies for payments is the relatively low transaction fees. Unlike traditional banks that may charge a high percentage for international transfers, cryptocurrency transactions can be much cheaper.
Additionally, when converting cryptocurrencies to local currency, freelancers often find that the exchange rates are more favorable compared to those offered by traditional banks.
“International transfers are a pain in the head. High fees and bad conversion rates cause a lot of losses as a freelancer,” said Yasser Berrehail, a full-time freelancer from Algeria, in an interview with CryptoNews.com
Speed and Global Reach
Traditional bank transactions, particularly international ones, can take up to several days to process. This delay can be inconvenient and can even impact the cash flow of a freelancer.
In contrast, cryptocurrency transactions can be completed in a matter of minutes regardless of the geographical location of the parties involved. This speed can be a significant advantage for freelancers who work with clients globally.
Inci Ozgur, a part-time freelance video editor emphasized the importance of transaction speed in an interview with CryptoNews.com
I could either wait for almost 5 working days, just to lose 10% of my money to transaction fees, or I could pay less than a dollar and receive it almost instantly. The choice seems pretty obvious to me,” she said.
This is just a glimpse into how cryptocurrencies are offering advantages over traditional banking methods, particularly for freelancers.
Empowerment and Control: No Middlemen, Full Ownership
One of the standout features of cryptocurrencies is their peer-to-peer transaction model.
This sense of direct control is particularly appealing for freelancers. In traditional systems, the bank or payment service holds your funds and processes transactions on your behalf, essentially acting as a gatekeeper.
With cryptocurrencies, you have complete ownership of your assets as they are stored in your digital wallet, not a bank account managed by a third party.
Transparency and No Account Freezes
Another benefit is the transparency afforded by blockchain technology. Each transaction is recorded on a public ledger that anyone can view, bringing a level of openness that is usually not possible with conventional financial systems.
Additionally, there’s a lower risk of having your account frozen when you deal in cryptocurrencies. In traditional systems, your funds are subject to the policies and whims of the financial institution.
Ozgur told Cryptonews.com about a past real-life experience regarding frozen assets.
“A major bank in Turkey had severe technical difficulties, and their customers weren’t able to withdraw money, or make any purchases. I couldn’t afford to buy a bottle of water for nearly 2 days,” she said.
In contrast, digital wallets are harder to freeze, mainly because users have control over their encryption keys, providing a sense of financial security that freelancers find appealing.
Accessibility and Financial Inclusion
Though they may seem intimidating, cryptocurrencies offer a straightforward approach to transactions as well. Most digital wallets and exchanges feature user-friendly interfaces, making it easier for people to navigate even if they aren’t tech-savvy.
Also, unlike traditional banks, which have set hours and days of operation, crypto transactions can be carried out 24/7—a useful feature for freelancers who may be working with clients in different time zones.
Cryptocurrencies can also extend financial services to people who don’t have access to traditional banks, which is often the case in less developed countries.
This is especially important for freelancers in these regions, who might not have the luxury of a stable banking system but still need to conduct business globally.
“There [are] not many banking solutions, plus the restrictions according to the local laws [make it difficult]. Crypto made it easy to make transfers without any tracking, so it gave freedom to freelancers to receive and send money,” Berrehail explained.
Privacy and Security
While not entirely anonymous, cryptocurrencies do offer a higher degree of privacy compared to traditional payment methods. Transactions can be completed without the need to share sensitive personal information, reducing the risk of data breaches.
Additionally, some cryptocurrencies are designed to have a limited supply, which can mean a lower risk of inflation compared to traditional currencies that can be printed at will by governments. The stability in value is another factor that freelancers find attractive when choosing a method of payment, particularly in areas hit by hyperinflation.
Implications for the Cryptocurrency Industry
As freelancers start to use cryptocurrencies more frequently for transactions, it’s likely that these digital assets will become more commonly accepted and used.
With more people using cryptocurrencies for practical, everyday transactions like getting paid for freelance work, the perception of these digital assets seems to be changing. They can start to look less like speculative investments and more like functional currencies that people can use for everyday activities.
This could make cryptocurrencies more commonly used for other types of transactions as well, not just within the freelance community.
An uptick in cryptocurrency usage for freelance payments could catch the eye of regulatory bodies, however.
While increased scrutiny might lead to more standardized practices in the use of digital assets, there’s also the risk of new rules that could limit how freelancers can use cryptocurrencies. These possible restrictions might create new hurdles for freelancers, affecting how beneficial cryptocurrencies can be for them.
New Payment Solutions
As more freelancers turn to cryptocurrencies, there’s likely to be increased demand for payment platforms that make these transactions easier and more efficient.
Existing crypto wallets and exchanges may evolve to include features specifically useful for freelancers, making the use of cryptocurrencies for freelance work even more practical. Established freelancing platforms may also opt to offer payment solutions to cover cryptocurrencies.
The consistent use of cryptocurrencies for freelance work could have a stabilizing effect on the market. When digital assets are used for regular, everyday transactions rather than speculative investments, it can provide a more stable demand, which could, in turn, influence the market to become less volatile.
Cryptocurrencies clearly offer a range of benefits that can make them appealing for freelancers. Traditional banking and payment platforms often come with fees, slow transaction times, and other limitations that can be particularly burdensome for freelancers, especially those dealing with international clients.
On the other hand, cryptocurrencies often offer lower fees and quicker transactions, not to mention the advantage of being usable anywhere in the world at any time, instantly.
That said, cryptocurrencies are not without their drawbacks. Regulatory uncertainty can make using them a bit risky, and the market’s price volatility could impact the real value of earnings. There’s also the issue of less consumer protection compared to traditional banking systems.
Still, for many freelancers, especially those in areas with less access to traditional banking, the benefits outweigh the risks. Cryptocurrencies offer an alternative that is fast, less costly, and, in many ways, more accessible.