Can Blockchain Automate The Middleman For Freelancers

More than a force of change on the business world, freelancers are becoming a competitive advantage because they:

1. are highly flexible,
2. get paid by the task; and,
3. have a high degree of autonomy.

Strategically, freelancers also give employers: the ability to tap into talent outside the local geographic area, the flexibility to cover short-term skill gaps, the luxury of lower overhead and the myriad benefits that go along with increased operational agility.

 

The Middleman

The advantages of hiring freelancers are clear, but the process of finding freelancers can be tedious, frustrating and expensive. Enter the middleman or third-party. Platforms like Upwork and Fiverr are popular, but tend to struggle with a common set of problems to include inconsistent work quality and payment issues.

In addition to these challenges, third-parties also charge fees. Some charge a flat rate fee on all transactions, while others charge variable rates. For example, Upwork charges 20% for up to $500, 10% for up to $10,000, and 5% for over $10,000 per client. Fiverr charges 20% flat. This doesn't include fees on payment options like credit cards, PayPal or bank transfers.

Is it possible to automate this middleman and payment function? Yes, and the name of the technology helping companies do so is called blockchain.

 

Blockchain Automates the Middleman 

Blockchain is the new middleman. It  helps to facilitate the connection between you and the freelancer by serving as a dual-staking system or escrow service. The technology offers companies and freelancers the ability to trust and verify without the need for intermediaries. Once the contractual conditions have been fulfilled, payment is automatically authorized. The set of conditions surrounding the agreement is referred to as a 'smart contract'. No middleman or trust agent is needed because the blockchain is the broker.

Blockchain applications also provide benefits for the freelancer including faster payments,  lower fees, easier access, and contractual incentives like staking. Staking helps freelancers solve the age old "chicken or the egg problem" when starting on a  new platform. A reputation is required to get new gigs, but you need gigs to establish a reputation. With Serve, Instead of having to build a reputation, you can buy your reputation by purchasing a "stake". This form of tokenized reputation encourages  everyone to act ethically because everyone has some "skin in the game".

Most third party platforms are flawed since the middleman charges fees and controls how the connections are made. Blockchain powered with technology has the ability to automate the middleman function giving you all the benefits of hiring a freelancer without the headache.

The future is powered by blockchain.

How Is Silicon Valley Preparing For Mass Automation?

"Most humans won't have any saleable labor in the future", said one ex-techie in the video below.

"Techies can see that the future is coming and they are reacting to that future".

What is that future: automation.

The result is a big rise in unemployment and it has some folks in Silicon Valley "terrified", especially people with money and/or resources to lose. One venture capitalist in the video below refers to what's coming as the new French Revolution.

 

This is an enlightening video about how some ex-Silicon Valleyers, the coders of automation, are preparing for the next 20 years.

What do they fear: biological weapons, nuclear war, economic collapse.

What are Silicon Valleyers collecting: guns, renewable energy, food, generators, masks, health supplies

Silicon Vs Doomsday Prepper

Even though techies are buying $500k bunkers and guns like the stereotypical "doomsday prepper", they are also doggedly focused on "quality of life". Many of them view what's coming as the "new economy" rather than "the coming apocalypse".

Perhaps the most persuasive aspect of the "techie prepper's" argument is that unlike the typical "doomsday prepper", these are the men and women that were hired to create a program for the average American job, which is to say they know what they're talking about. In other words, if the guy sitting next to me on the plane is scared, I'm ordering a drink. If the flight attendant is scared, I'm ordering two drinks, reading the emergency manual and saying my prayers.

Translation: A techie warning about the impact of automation is far more reliable than the average guy sitting next to you on the plane, even if that guy claims to have biblical proof (prophesies always tend to be off by a few years).

So who's the pilot of the tech world and what's s/he got to say about flight status?

There are many noteworthy pilots in the tech world, but Elon Musk is among the best. Here's a quick clip on what he thinks about the impact of automation.

This is a data driven response to a fair question about the impact of automation around the world. His directness is both refreshing and startling in its implication.

What I like about the tech version of the coming "apocalypse" is that it is surprisingly optimistic. Instead of scripture, prophecy or fake news, techies are basing their prediction on data. They know that what's on the other side of the hump is a time period when people are not valued for their work. For some this is a terrifying prospect, even for the techie, but for others it is a kind of Eden. To gain value from your own self-betterment and the betterment of mankind is both noble and obtainable when much of the work is being done for you by machines. Now, we just just need to reclaim the stolen wealth accumulated by central banks -- enter crypto -- and use that as the basis for universal income.

Final Thoughts: "Prepping" for the future brings together two profiles often depicted as being diametrically opposed. This unlikely coalition is starting to form the backbone of a movement. And, this notion that techies are somehow responsible for the downfall of society is as ridiculous as blaming war on the soldiers that fight it. Automation is an inevitable conclusion to market demand.

Jackson's "Hard Money" Panic of 1837, New Fed Group, Automated Investor Tools, DATA Act Phase II, Fraud & What Do Negative Nominal Rates Mean?

• Was the panic of 1837 was caused by Andrew Jackson's "hard money" policies?

• New Group at the Federal Reserve?

• Dudley's in the Bronx

• Beware of Automated Investor Tools

• Phase II of the DATA Act

• What do negative nominal rates mean?

• ClearPath Wealth Management charged with fraud by SEC

Liberty Street Economics, the research leg of the New York Fed, published a paper entitled Crisis Chronicles: The Man on the Twenty-Dollar Bill and the Panic of 1837. Jackson believed that gold and silver were the only "real money" and demanded that all land purchases be made in "hard money". According to the article, "he despised the elites running the banking system, so he embarked on a crusade to abolish the Second Bank of the United States (the Bank). Both of these efforts by Jackson boosted the demand for specie and revealed the soft spots in an economy based on hard money." This article ultimately shows how this move toward "hard money" led to the Panic of 1837. 

The Federal Reserve Bank of New York announced a new group called the Wholesale Product Office (WPO) which will be managed by Richard P. Dzina as executive vice president and Group Head. Prior to this role, Dzina ran the market operations, monitoring and analysis function in the Markets Group. The WPO will manage the "Fedwire Funds, Fedwire Securities and the National Settlement Service."  “The designation of the Wholesale Product Office as a stand-alone group with direct reporting to the president of the Bank reflects the critical nature of these payments and settlement services to our financial system,” said William C. Dudley, president and CEO of the New York Fed. 

William C. Dudley, the same one mentioned in the note above, also gave remarks at the 17th Annual Bronx Bankers Breakfast. Dudley used the time to provide an overview on the benefits of community banking and the need for greater support of small business at the community level.

The SEC issued an "Investor Alert" against automated investment tools. According to the announcement, tools range from "personal financial planning tools (such as online calculators) to portfolio selection or asset optimization services (such as services that provide recommendations on how to allocate your 401(k) or brokerage account) to online investment management programs (such as robo-advisors that select and manage investment portfolios)." In particular, the SEC warns against tools that promise better portfolio performance. 

A year ago Congress passed the Digital Accountability and Transparency Act of 2014, or the DATA Act. The goal of the act was to create a "more data driven government" by making it more available and transparent to those that need it. Yesterday marked the beginning of the next phase of the DATA Act. Over a two-year period the DATA Act will be requiring Federal agencies to streamline the reporting process by reporting funds received from the government into specific pre-determined categories. It will also require agencies to use common government-wide data standards when posting information. 

Today we are beginning the rollout of 57 data standards. Some are final based on public input we have already received, and others will require additional input as we finalize them this summer. As a result of input from our partners in Congress, industry stakeholders, federal agencies, and taxpayers through feedback on our public GitHub collaboration space, 15 final data standards available today will be used by all agencies for all federal spending data posted on USAspending.gov, the Federal Government’s one-stop shop for spending data..

The 2016 budget should allow for $84 million to help agencies make progress in implementing the DATA Act. 

James McAndrews, Executive Vice President and Director of Research gave remarks at the University of Wisconsin. In a speech entitled Negative Nominal Central Bank Policy Rates: Where Is the Lower Bound? Andrews discussed how the Swiss National Bank (SNB), the European Central Bank (ECB), Danmarks Nationalbank (DNB), and the Swedish Riksbank "have pushed short-term interest rates to levels below the “zero lower bound.”" And refers to the depth of the action as unprecedented. The main question is whether or not a "zero lower bound" is even valid -- what does it mean? He uses the speech to suggest that:

...the zero lower bound on policy interest rates is much like the low tide mark on a beach: Standing at that border between the land and the ocean, you can continue to lower your elevation by walking into the water, but with each additional step, you will need to push against the increasing resistance of the water. There is a distinct qualitative difference between positive and negative nominal interest rates, just as there is a distinct qualitative difference between the beach and the ocean.

The SEC charged Rhode Island investment adviser, ClearPath Wealth Management, LLC, and its president and owner, Patrick Evans Churchville, with fraud "for operating a fraudulent scheme that resulted in at least $11 million in losses to investors." Clearpath and Churchville diverted deposits from new investors into old investors' accounts and stole $2.5 million of investor funds to purchase a waterfront home in Rhode Island. Four other entities are named on the order as relief defendants including: ClearPath Multi-Strategy Fund I, L.P., ClearPath Multi-Strategy Fund II, L.P., ClearPath Multi-Strategy Fund III, L.P., and HCR Value Fund, L.P. The SEC is seeking disgorgement of gains. 

Upcoming Events

Tuesday, May 12, 2015: Andrew Ceresney, Director, Division of Enforcement and Stephanie Avakian, Deputy Director, Division of Enforcement, will participate in the Annual White Collar Crime Institute. 1:30pm. Location: New York City Bar Association, 42 West 44th St., New York, Contact: Darianne Deleon, 212-382-6731, ddeleon@nycbar.org

Wednesday, May 13, 2015: Andrew Cereseny, Division of Enforcement, will give the keynote presentation at the University of Texas School of Law 2015 Government Enforcement Institute @ 10 a.m. (9 a.m. CT), Location: Bello Mansion, 2101 Ross Ave., Dallas. Contact: Sarah Hollingsworth, shollingsworth@law.utexas.edu

Wednesday, May 13, 2015: SEC senior officials and staff will participate in the Securities Enforcement Forum West 2015, including Enforcement Director Andrew Ceresney, San Francisco Regional Director Jina Choi, and Los Angeles Regional Director Michele Wein Layne. @ 11 a.m. (8 a.m. PT) See agenda for details. Location: Four Seasons Hotel, 757 Market St., San Francisco, Contact: Bruce Carton, bcarton@securitiesdocket.com

In Case You Missed It

• Monday, May 4, 2015 Recap: FRB Reports on Credit & Lending Practices, May CRA, Deutsche Bank Maintains WKSI Status, Peer Analysis May Lead To Overvaluation  
• Tuesday, May 5, 2015 Recap: Does Compliance Matter For Bank Performance, Alger Fair Fund Established, FTC Allows $12.4B Merger
• Wednesday, May 6, 2015 Recap: Does Tick Size Matter, Asia Economic Review, FDIC Strategic Plan, Low GDP Blamed on Baby Boomers, and The FRAC Wants You! 
• Thursday, May 7, Recap: CCP's, #MMT Fraud, Census Data Reports, LSAPs & IFRS

Last week 

• Monday, April 27, 2015 Recap: Credit Detail, More CFTC Charges, Puzzling Low T-Yields, and the Fed Testifies Before The Senate 
• Tuesday, April 28, 2015 Recap: Ex-Evercore Banker & Girlfriend Charged, IMF on Islamic Banking, Bank Profitability, and a $600K Payday For Whistleblower 
• Wednesday, April 29, 2015 Recap: Fed Funds, Bernake's Response To Taylor's Rebuke, GDP, China's Looming RE Battle & Pay Vs. Performance 
• Thursday, April 30, 2015 Recap: Algorithmic Trading, Community Banks, Personal Income Report, Another FX Scheme, Banking Applications and Compliance Outreach
  
• Friday, May 1, 2015 Recap: Financial Literacy, 18yrs For Investment Fraud, FCStone Sanctioned, Pan-African Banks, Piwowar's Dissent and Alaska's $51B Fund

Two Weeks Ago 

• Monday, April 20, 2015 Recap: Treasury Auctions, FX Ponzi, BlackRock Fail, Dudley's Fed Speech, and the FFER
• Tuesday, April 21, 2015 Recap: More Regulation For Large Banks, Youth Savings, Piwowar's Speech, Flash Crash Culprit, the OFAC & FNRG Halted
• Wednesday, April 22, 2015 Recap: #EXIM2015, Obama's PPPs, Goldman Sachs In The "Dark", $1.5M Payday, Massad Speaks, and Yellen Stabilizes
• Thursday, April 23, 2015 Recap: GDP, Deutsche Bank, Community Banks, Repos, and the Treasury Gets New Blood
• Friday, April 24, 2015 Recap: New Federal Reserve Auditor, Inventories Up, CEI Same, Insider Trading, Fair Fund Delays & Alizadeh's Grand Jury Indictment