Crowdsourcing occurs when a job intended for one person, or a small group, is opened up to the public via the Internet. Crowdsourcing allows people across the world to collaborate on projects and is very useful for large projects that one person or several people can't handle on their own. Crowdsourcing can also provide multiple perspectives, which is beneficial in that the project is more comprehensive.
Whether or not workers will receive compensation for their work is usually defined as part of the project, so people know before they join.
An example of crowdsourcing is Wikipedia, a website that allows millions of people online to contribute information on thousands of topics.