Bitsapphire and Coinality: A Case Study on Online Job Advertisements for Blockchain Freelancers

During the early years of blockchain development, the environment lacked an adequate number of skilled enthusiasts. One main issue was the absence of a website where blockchain developers and enthusiasts could find partnerships and be paid based on their work and qualifications.

Bitsapphire fostered a consulting partnership with Coinality and developed an application to solve this problem within the blockchain sphere.

Preface

The project began in early 2013 when Bitsapphire was contacted by Coinality’s CEO, Dan Roseman, to solve the aforementioned problem. Coinality already had an operating message board, but the development of an online job advertisement board required an entirely new web application.

Upon accepting the project, Bitsaphhire’s brainstorming sessions concluded that four parts were necessary to successfully develop this application:

  1. Vetting the developers
  2. Escrowing payments
  3. Real-time communication
  4. Mediating issues

A Bitcoin for Your Blockchain Thoughts

We predicted that a critical problem regarding the project would be a lack of guaranteed quality among freelancers looking for a job. We wanted to eliminate the possibility of Coinality users wasting their time and money on freelancers that couldn’t get the job done. So, we decided a screening process was necessary before anyone could register with Coinality.

The website was designed as invite-only for developers, so the screening provided a two-step process for authentication. Preliminary steps were taken by the administration to ensure that as little mediating as possible would be needed later on.

The user category was divided between employers and employees.

These two groups had separate requirements. We previously mentioned that employees (devs) would need to go through a manual screening process, but employers were on a different side of the process.

To ensure that employees would maintain their end of the bargain, Bitsapphire developed a two-key wallet. This meant employees would have to create a personal wallet and deposit Bitcoin. These funds would function as the main deposit box that would then be allocated into a project wallet.

The process might seem a bit overly complicated, but working with cryptocurrencies meant that we needed to ensure trust and install a rigid system that had no room for malicious intent. The second wallet was necessary because the funds placed inside are locked, and the system then acts as an escrow.

When a freelancer applied for a project and finished price negotiations, seeing the locked funds would give the freelancer the green light to begin working.

Smart Contract Capabilities

Since Coinality is built on a blockchain, handling funds with smart contracts was a natural choice.

When creating a project, you place it on a smart contract that allows for the following specifics to be decided:

  1. What is the project?
  2. Has payment been agreed upon?
  3. Who is the employer and who is the employee?
  4. Have any milestones been agreed upon?

All of the aforementioned features are fairly self-explanatory. The milestones feature was added to promote a sense of continuity within a given project. Depending on whether the project is short or long-term, milestones allow the employer to deposit a divided amount of the funds when specific requirements are met. The process of transferring funds is done automatically once the milestones are met, and the employer is satisfied.

Arbitration and Trust

While creating Coinality, Bitsapphire knew that at least a few problems would be inevitable. Whether it be a stingy employer or an idle employee, any number of issues could possibly arise. In such a scenario, an arbitrator would act as a mediator. The arbiter’s job is to remain as unbiased as possible and come forth with facts.

How are these facts disputed or confirmed? Bitsapphire developed a built-in chat feature. To ensure proper documentation, Coinality strongly recommends all communication take place inside its proprietary chat. No messages can be deleted.

When a mediator enters the dispute, he contacts both parties, compiles a list of arguments and checks the chat as proof. Once the case is closed, the judge uses his or her ultimate key to unlock the wallet, finalizing the dispute.

Trust is an essential factor in the Coinality environment. Using the power of blockchain technology, Bitsapphire created a token economy that encourages trust. All users, upon registering receive a personalized token. This reputation token is connected to its user throughout their whole Coinality experience. It displays a rating of how trustworthy someone is, tied to two main factors:

  1. Their performance on projects – Whether a job has been successful or unsuccessful and how the job is rated upon completion.
  2. The developers they invited and their performance – Since Coinality is invite-only, when a user invites a developer, that developer is automatically connected to the user’s reputation token, and their performance directly impacts the users stats.

This back and forth rating system acts as an incentive for users to cultivate a healthy environment, creating a successful token economy.

Conclusions

  • Creating an online job platform for blockchain freelancers meant solving a number of issues: trust, handling of funds, and quality assurance.
  • A two-step process for verifying users acted as a ground filter for inappropriate developers.
  • To handle the trust factor we had to create a healthy economy, we achieved this by creating a reputation token.
  • The reputation token was tied to two factors, personal performance & rating, as well as the performance of the developers a user has invited.
  • Issues are handled by the third party (Coinality) that acts as a judge based on the facts presented and closes the dispute by distributing the funds

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