Cryptocurrency and the Gig Economy: Benefits, Risks, and Opportunities

Based on a recent report, there are more than 57 million people in the US have been participating in the Gig economy. The Gig economy has widely transformed the way of transactions. Independent contractors, freelancers, gig workers, and many others have widely increased with wide numbers of online marketplaces. 

The rise in the gig economy has led to the popularity of Cryptocurrency as an important payment system. Organisations would hire independent contractors and freelancers in the gig economy. There is no need to go for full-time employees as the work is allotted only temporarily. This does not require any systematic schedule. For example, these arrangements could be seen in companies such as DoorDash, Uber, and Airbnb.

How Cryptocurrency Is Influencing the Gig Economy?

The biggest advantages of cryptocurrency in the Gig Economy are speedy and secure transactions. Cryptocurrency transactions are quite different from traditional payment methods like bank transactions.

These cryptocurrency transactions involve low fees for each process. These are widely used by many freelancers to make transactions quite effective. The process helps resolve the currency conversion along with the international transaction fees.

Use our crypto tax calculator to calculate your taxes easily.

Benefits Of Gig Workers Getting Paid In Cryptocurrency

Anonymity:

Anonymity in cryptocurrency transactions is one of the biggest advantages. Many freelancers also receive the payments even without disclosing their personal information. There is no need to provide the name and address during the crypto transition. These are useful for various industries where security and privacy are quite paramount.

Blockchain-based technology enforces contracts even without the need for a third party. Cryptocurrency plays an important role in the complete Gig economy.

Independence:

In the gig economy, Independent contractors are not required to work the offices. They can work in their own spaces. These could vary from one place to another.

For example,

Gig workers prefer to become their boss as they can enjoy flexible job work, unlimited vacation, and especially a choice of jobs.

Income:

The gig economy has been widely increasing in the modern-day market with sheer flexibility. This allows individuals to easily earn more income. Cryptocurrency transactions are helpful for extensively saving money on lower commission fees.

Gig economy workers such as rideshare drivers, dog walkers, errand runners, and many others have been living in the economy's frontier. Autonomy and flexibility are the most important attribute that is associated with Cryptocurrency.

There are also gig workers who have been using digital finance to get partially or fully paid in Cryptocurrency like Ethereum, Bitcoin, and many more. Cryptocurrency holds a wide range of potential attractions for gig workers:

Ø  Instant payments

Ø  Lowering the fraudulent payments

Ø  Global payments access

Ø  No costly international wire transfer fees

Ø  Payments tied with the project milestones

Ø  Freelancers do not have to chase after late payments

Ø  Fast currency conversion

Cryptocurrency has gained massive growth with public awareness along with its value. In the modern day, the Gig sector has been growing continuously by adopting disbursement aspects. These include payments in the crypto like boosting digital money transactions. 

Potential Crypto Challenges:

In the modern day, there are a wide number of freelance work apps available such as Upwork, TaskRabbit, Uber, and more. These have no cryptocurrency payment modes available. Many emerging upstart apps have been aiming to provide gig workers with crypto transactions. Cryptocurrency payments for the Gig Economy also face more challenges, such as

ü  Volatile values of Cryptocurrencies cause crypto payment amounts to fluctuate.

ü  Tax implications of crypto

ü  Values fluctuate when individuals sell their holdings

Workers who accept Bitcoin or other crypto tokens are required to calculate the difference between the value of Cryptocurrency and the value of selling. This requires the payment of taxes on any gains.

Detailed information on how Cryptocurrency can be a convenient and efficient way for gig workers to receive payments for their work and manage their income and expenses. 

Here are a few examples of how gig workers can use cryptocurrency in their day-to-day work:

• Accepting payments: Gig workers can accept payments in cryptocurrency from their clients or employers. They can provide their cryptocurrency wallet address to receive payments directly, without the need for intermediaries like banks or payment processors. This can help gig workers avoid high transaction fees and delays associated with traditional payment methods.
• Managing income and expenses: Gig workers can track their income and expenses using cryptocurrency wallets and accounting software. They can easily record their cryptocurrency transactions and convert them into their local currency for tax purposes. This can help gig workers save time and money on accounting and bookkeeping services.
• Protecting against currency fluctuations: Gig workers who receive payments in cryptocurrency can protect themselves against currency fluctuations by converting their cryptocurrency into stablecoins or their local currency. This can help them avoid losses due to volatility and ensure that they receive a consistent income.

Risks Associated With Using Cryptocurrency in the Gig Economy

Fraud and theft: Gig workers may be targeted by scammers who offer to pay them in cryptocurrency but then fail to deliver the funds. Additionally, cryptocurrency wallets and exchanges can be vulnerable to hacking and theft, which can result in the loss of funds.

Regulatory uncertainty: Cryptocurrency regulations vary by country and can change rapidly, which can create uncertainty for gig workers who use cryptocurrency. They may be subject to taxes, reporting requirements, and other legal obligations that are not always clear.

To protect themselves from these risks, gig workers can take the following steps:

1. Use reputable wallets and exchanges: Gig workers should only use reputable cryptocurrency wallets and exchanges to store and exchange their funds. They should research the security features and reputation of these platforms before using them.
2. Use two-factor authentication: Gig workers should enable two-factor authentication on their cryptocurrency wallets and exchanges to prevent unauthorized access.
3. Keep funds secure: Gig workers should keep their cryptocurrency funds in a secure location, such as a hardware wallet or offline storage. They should also regularly back up their wallet and keep their private keys secure.
4. Be cautious of scams: Gig workers should be cautious of unsolicited offers to pay them in cryptocurrency and should only accept payments from trusted sources. They should also be wary of phishing scams and other forms of fraud.

Cryptocurrency can be a useful tool for gig workers to receive payments and manage their income and expenses. However, gig workers should be aware of the risks associated with using cryptocurrency and take steps to protect themselves from fraud and theft.

Future Of Cryptocurrency in the Gig Economy

Apart from the risks, Cryptocurrency has the potential to transform Gig Economy. This creates more numbers of opportunities for freelancers. Many businesses also adopt Cryptocurrencies to make quicker transactions from across the world. Freelancers do not require to worry about international transaction fees or even currency conversion.

Cryptocurrency has the potential to disrupt traditional payment systems by eliminating the need for any bank or intermediaries. It especially cuts the fees for transactions. These would enable faster payment processing.

Blockchain technology could create new opportunities for freelancers to earn more income. These would allow significant benefits for freelancers who rely on timely payments.

For example,

Blockchain-based platforms allow freelancers to earn Cryptocurrency by simply contributing unique skills and tasks. These could involve participating in online communities and decentralised projects.

Use our crypto tax calculator to calculate your taxes easily.

Conclusion

The intersection of cryptocurrency and the gig economy represents a new frontier in the world of work. While there are challenges and risks associated with using cryptocurrency in the gig economy, there are also opportunities for innovation and growth.

Cryptocurrency has the potential to provide a more secure, private, and efficient payment system for gig workers while enabling them to access global markets and new opportunities. As the gig economy continues to grow and evolve, it will be important to explore the potential of cryptocurrency and other emerging technologies to support a more equitable and sustainable future of work.