How One Blockchain Startup Is Combatting Centralization of the Credit Industry

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This is the first article in a series on breakout applications of blockchain technology. Cryptocurrencies were the first major application of cryptography enabled value storage and transfer, of which blockchains are at the core. There will be other breakout applications following this. Decentralized credit management and credit scoring will be a major disruptive one. And the blockchain credit rating agency are already being sown. There is truly one most valuable resource that belongs to every person.

That resource is time. The time resource is what every person converts into every other thing of value. This we do in the form of labor, where we give our time to do some work in exchange for payment.

Or we put time into our relationships to obtain a better quality of life. Credit represents an exchange of our future time for value and is a very important factor in personal, corporate, and organizational resource management. Societies that have seen the greatest economic development have also coincided with those that have done the best at developing structures for managing credit.

Specifically, many of the developed countries developed a system of recording and assessing reputation of individuals and institutions based on their credit history, in addition to their wealth. This spawned growth in the form of individuals that were able to gain home ownership earlier than without a credit system, and businesses that are able to access credit to develop products and provide services and thus create jobs.

However, even for the developed countries, the current credit system, which has been put together nearly a century ago is showing its limits.

The credit rating blockchain credit rating agency that we have provided authority to maintain credit records have formula and procedures that are no longer optimal in determining credit worthiness. An individual or business with a good rating essentially can not carry that rating along when they move to a different country.

Even though their ability to manage credit did not change with the move, their access to credit essentially blockchain credit rating agency. That state of things can not be acceptable in a world where we have so much technological abilities and tools. The recent hacking of credit agencies such Equifax also demonstrates that the old system, and the system keeper are due for innovation. While blockchains are not a cure all for every challenge, they are particularly well suited to recording blockchain credit rating agency securing data in a manner that makes them transparent and immutable.

They also know no boundary, are impartial, and are color blind. A trustless implementation of our credit rating system in a deterministic manner is one that would be well suited to the blockchain.

I was pleased blockchain credit rating agency note that an new blockchain company already came up with this idea and has implemented a credit scoring system on the blockchain. The company is Bloom https: Im following you now. Liked your post blockchain solutions for real world is the future begining now.

You have completed some achievement on Steemit and have blockchain credit rating agency rewarded with new badge s:. Award for the number of upvotes. Click on any badge to view your own Board of Honor on SteemitBoard. For more information about SteemitBoard, click blockchain credit rating agency.

If you no longer want blockchain credit rating agency receive notifications, reply to this comment with the word STOP. By upvoting this notification, you blockchain credit rating agency help all Steemit users. Richter This is the first article in a series on breakout applications of blockchain technology. The Importance of Credit There is truly one most valuable resource that belongs to every person. Problems with the Current Credit System However, even for the developed countries, the current credit system, which has been put together nearly a century ago is showing its limits.

Enter Blockchain Solutions While blockchains are not a cure all for every challenge, they are particularly well suited to recording and securing data in a manner that makes them transparent and immutable. Authors get paid when people like you upvote their post. You have completed some achievement on Steemit and have been rewarded with new badge s: For more information about SteemitBoard, click here If you no longer want to receive notifications, reply to this comment with the blockchain credit rating agency STOP By upvoting this notification, you can help all Steemit users.

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The Equifax breach has driven Congress and others to rethink two major parts of the current credit system: But figuring out a new system is challenging.

One intriguing idea is adapting distributed ledger technology, a shared database with security and access controls built in, for identities. Bloom, the Decentralized Identity Foundation, and Open Identity Exchange are all working on protocols and standards that could be used by any entity to create a distributed ledger ID system.

When a user creates a new identity in a distributed ledger based on Bloom, a blockchain identity protocol, the user submits information to the network: The system sends queries to parties that already have that information to look for matches.

A second might be a utility company verifying the address. LexisNexis and the credit bureaus already do such verifications. This is a project we feel passionate about. More than financial firms around the world — mostly alternative lenders — intend to use the Bloom protocol, he said. Credit bureaus are also reaching out to Bloom, which Leimgruber refers to as a decentralized credit bureau, largely because of nervousness about security.

Leimgruber acknowledged the drawbacks of blockchain technology: But he addresses those weaknesses by using IPFS, a protocol for decentralized, distributed content hosting. Most of the tough computation elements, the things that would typically be bogged down by blockchain, are stored on IPFS.

IPFS could become an attractive target for hackers, Leimgruber concedes. Instead of a blockchain run by a startup, however, some foresee the credit bureaus building a blockchain of their own.

Getting everyone in the U. But what if several interoperable blockchains could be stringed together? Editor at Large Penny Crosman welcomes feedback at penny. Article Underwriting self-employed borrowers Freddie Mac helps lenders to better serve this expanding market segment. Partner Insights Sponsor Content From: Posted by kallingham dkl. I'm not sure how this would go in the western economies.

Are the big banks going to give up their private ledgers for a shared ledger? What would be the point of having two ledgers? I'm having trouble imagining how it would get started for real, as opposed to experimentation. How big would the shared ledger be, and how long would it take to update?

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