The Future of Lending is Blockchain

I invest in everything. I hold stocks, bonds, mutual funds, and cryptocurrency. I copy trade. I hold microloans, real estate, cryptocurrency miners, cash, fiat currency, gold, silver, you name it, I hold it. The variety of my holdings goes beyond diversification. I’m interested in testing every form of investment, if nothing more than for pure curiosity of the financial instrument. It’s one thing to read a book about the subject, it’s entirely different to have some skin in the game. It’s often that you don’t get a full picture of where you want you finances until you’ve tested the waters in a concrete way.
In a sense, many of these holdings are different forms of lending. In the case of cryptocurrency you’re often supplying value to a decentralized ecosystem in exchange for some kind of utility, or return, in the case of proof of stake. In the case of bonds, you’re supplying capital to an entity at some agreed upon interest rate. However, in all my dealings with traditional financial instruments, there is one thing that separates them from blockchain based financial instruments: their opacity.

Let’s take as a comparison a centralized lending platform, and it’s decentralized counterpart.
As previously stated, I hold microloans on the prosper platform. I initially invested because it seemed to me a novel idea. I remember when I was younger googling “how to start your own bank”. I graduated high school during the 2008 financial crisis, and it seemed to me, the banks had it made. They give you money, do nothing, and profit. If you don’t pay them back, they take your collateral. Nearly no risk, and a guaranteed return. Obviously things aren’t that simple, but this desire to be a moneylender stayed with me. This desire led to me invest some bitcoin profits into prosper microloans.
The prosper system offers a number of metrics to a would be lender. Among these are the borrowers state, their FICO score range, their income, and their Debt/Income ratio. Another metric is the proprietary “Prosper rating”.

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