A crypto-based scheme that pays workers in real-time just went live in Australia
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Imagine watching your pay drop into your account live, as you work, by the hour. Then spending it on the way home, every day.
“I’d never have any money,” you’re probably thinking.
And yes, you’d probably need to quickly employ some new savings strategies. But what if your hourly pay was something else that hasn’t been seen in Australia for nearly a decade – more than it used to be?
Sergei Sergienko thinks he has found a way to make it happen, starting today, with the launch of a revolutionary global job platform called LaborX.
But first, a warning – this article contains references to “the blockchain”, “tokens” and “cryptocurrency”.
Don’t switch off your sets. Sergienko actually has runs on the board. In 2007, at the age of 25, he launched a labour hire, staffing and training company called the Edway Group that provides certified workers, and offers training, licensing, and certifications to individuals.
Within three years, it was turning over $6 million, putting Sergienko on the Anthill “30 under 30” and BRW “Fast Starters” lists.
He’s represented Australia at G20 summits, and through Edway, Sergienko has teams of app developers around the world and a database of hundreds of thousands of Australians who have been trained or hired out through the services Edway offers.
And now, armed with a hugely successful, but largely unheralded ICO under his belt, Sergienko is pulling it all together to make a change workforces around the world have been waiting 150 years for.
“The way for people to be remunerated is based on pre-Industrial Revolution kind of wages – you spend the time in the factory, and you get paid,” he says.
“If you look around, everything else has changed. And it’s really, really weird that the way people get paid for their services, for their time, for their work, has not gone through any revolution of sorts.”
The revolution, Sergienko hopes, comes in the form of “Labor Hours”, and a hiring ecosystem called LaborX, which launched a beta version today.
Through LaborX, companies can hire and pay anyone from top experts from around the world, to local fruitpickers, with cryptocurrency – instantly. A fair hour’s pay for a fair hour’s work.
“From a person’s point of view, they are bargaining, when they ask for remuneration,” Sergienko says. “They are bargaining in yearly intervals.
“In your working life, you have 35 of those, 45 if you go to 65. That why (employers) can place a person on salary under the pretence of a false security where they get, say, holiday pay of 4 weeks or 6 weeks.
“People will actually get exploited because when you multiply by the number of hours they work and everything, the hourly rate isn’t great.
“What we’re trying to do is we’re trying to give people an opportunity to work on an hourly basis as opposed to yearly.”
Because it’s based on blockchain, LaborX also features a tokenised reputation system. As in, a reputation system that factors in dozens of candidate data points stored on an immutable ledger.
It’s the key feature that Sergienko is counting on to ensure job seekers earn their best market rate, while eliminating payment delays and disputes.
“Look at LinkedIn,” he says. “The LinkedIn system is really stuffed up in the sense that everyone gives each other all the pluses and you can’t really believe that.
“But if you want to see how important the review system is, just look at Uber drivers and how scared they are of losing any points on their profile.”
If your reviews are consistently good, you can charge more per hour for your services. And the person who hires you knows you’re worth it.
Just a verifiable review system alone has the potential to change a businesses’ bottom line in ways they may not have thought of, Sergienko says.
Worker’s comp in particular, he says, is “way, way overpriced in Australia”.
“For example, if you have a guy on a construction site, the premium for his workers’ comp insurance, would be in the region of 10%. So that’s for everyone in construction.
“What that implies is that for every 10 years, each person in construction will have an accident that will put them out of work for a year. If you think about it that way, it sounds absurd.
“What this system does, because of reputation you’ll be able to tell who’s a careful worker and who’s a sloppy worker. Sloppy workers would attract higher premiums and careful workers, their premiums would decrease.
“Just by that, people can save a shitload of money.”
Being blockchain-based also means companies and job seekers using the service can dramatically lower their platform fees. A 1% fee to use LaborX compared to an industry average of 10-20% for other online labor hire services equates to a saving of up to $45 million per month for 100,000 job seekers and employers.
For the immediate future after the rollout, the value of a Labour Hour is pegged to the national average hourly wage. Eventually, Sergienko hopes it becomes big enough to “derive its own national average”.
“The thing is if you’re talking an apple picker and an electrician, you’be hiring the electrician in say, 1.5 Labour Hours per hour and paying an apple picker say 0.1 Labour Hour per hour,” he says.
“The backpacker would use it because it would offer them quick payments, it would offer them what you might call continuous payment. As they work, they would be able to check their balance and actually see the tokens fall in their wallet as they work.”
Almost anyone reading this will have heard is “tokens”. You get paid in tokens. And for most of anyone, that means: “Why would I work for tokens instead of $50 an hour?”
Because those coins could be exchanged immediately on the LaborX exchange, and could be spent immediately, Sergei says, with an affiliate that allows users to spend or cash out crypto directly as fiat currency, with or without a debit card.
“A lot of what blockchain offers – and a lot of people misunderstand – is it offers quick moneys flows, or quick property flows, or quick valuables flows,” he says.
“So instead of a transaction taking three days or a week, it’s now possible to transact something within a second.”
That’s important when you consider recent PayPal survey showed 58% of freelancers have experienced non-payment in the past. And here’s a bonus — the money goes straight from employer to worker. No banks involved.
And besides, Sergienko says, there’s no reason for anyone to trouble themselves with how it all works.
“High technology is… depends on how simple you make it, right? I mean, high technology is pinging your bank every time you do a transaction. Every time you process a credit card transaction. It’s done and you don’t even think about it, you just tap the card and go.
“So if it’s just a matter of seeing a balance on your account and you tap it and go, you’re not even concerned with the technology.”
Sergienko clearly isn’t a fan of the traditional working life. He says “it’s a lot more interesting to dream big and try to do big things that just sit there and take a wage.
“Let’s call it a life-taker, rather than a life-maker.”
Supporting the whole enterprise is Sergienko’s HR startup Chronobank. It got bankrolled last year in Australia’s “other ICO”.
“I’m happy to go with the fact Power Ledger is the first ICO, which in fact it isn’t,” Sergienko says (and he’s a great admirer of that project). He’s also happy to go with “a figure of $5 million” raised in his ICO – for TIME tokens – when in fact, soaring crypto prices since then mean he’s probably a lot flusher with cash than the raise suggests.
His “$5 million” at the time included:
The bitcoin alone is today worth $32 million.
Sergienko has spent the past year travelling the world a speaking to various governments. He has “an understanding” to start working with Estonia, and visited Samoa and Armenia last month. He admits it’s all “moving rather slow”, but has the platform, wallet and internal exchange working. Hence today’s launch, right on schedule, which is actually a rarity right now in ICO world.
If all goes well, he’s hoping the first person in Australia to be employed and paid in Labour Hour tokens will be “realistically, probably this time next year”.
“It’s one thing to build it, it’s another thing to get people to use it,” he says.
“I want to work with governments and industries and unions and arrive at the best possible way for people to get renumerated.
“At the end of the day, we’re trying to make things more effective.”