Planet Debt: Is Blockchain Microlending the Future?

No industry becomes toxic of its own accord.

Even narcotics peddlers seek to fill a need with a minimum of violence. (Just look at Walgreen’s et cetera.)

Payday lending and other forms of microlending have become a parasitic industry, locking some workers into a continuous cycle of debt. This is the natural outcome of all the factors, and the lenders should probably not be demonized for trying to help people with loans.

Nevertheless.

Finance being blockchain’s first and constant use case, the era of blockchain lending approaches.

Companies like BitBond have created a new and competitive market for microlending. Applicants who’re willing to try a blockchain-based product get the benefit of express-lane, Kickstarter-style funding.

In our industry, some companies have failed to properly facilitate peer-to-peer lending. BTCJam.com, for example, was plagued with delinquent borrowers, leaving many lenders with no choice but to sue.

Why Blockchain Lending?

To be true, it probably doesn’t matter at this point.

But a day will come when the silent majority thirst for more financial freedom.

On its face, the latest wave of Bitcoin and cryptocurrency assets, in the news cycle and elsewhere, appears to be the same old. Millionaires like the Winklevoss Twins do not necessarily best represent those who hold the purse strings in blockchain finance.

The bottom line is that, however often derided, the storied “hodler” class have created a rock solid and constant source of liquidity. This is done by essentially locking a massive swath of Bitcoin — from whom all other cryptocurrencies derive their “peg” and value — away from the general public.

Yet, the value of the cryptocurrencies themselves is only a secondary benefit to the blockchain banking sector.

Traditional financial products like bonds, stocks, and working capital loans are possible through the blockchain with automated accounting.

It’s therefore not a stretch to imagine that those with traditional assets but little understanding of cryptocurrency will look to purchase crypto for the explicit purpose of investing in regular products or otherwise leveraging the crypto without selling it.

Nexo, for example, allows people to realize the value of their crypto assets without selling them.

Is Bitcoin a Bank?

From the days of Satoshi Nakamoto, people have claimed that owning Bitcoin is the equivalent of “being your own bank.” Yet, lending and other services offered by the traditional banking establishment have yet to be mirrored en masse. The rhetoric will begin to lose its appeal when an actual market price for BTC is eventually found.

The volatility and absurdity of contemporary markets serves only the exchanges that host the bloodshed, while honest businesspeople struggle to even understand the concept of a blockchain.

Companies who are serious about mass adoption, firms like Coinbase and Aximetria, will soon learn that as much as people enjoy enrichment from holding crypto assets, they may also like to get some usage out of the things from time to time.

After all, when money is not at work, it’s usually at play.

For now, people can simply go through the regular process of converting assets to fiat dollars and buying into traditional business enterprises.

However, over the long run, firms that would like to pioneer the fickle American consumer market might consider virtually anything that’s currently made difficult by things such as government intrusion and/or ineffective management at banking establishments.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of BitStarz News. BitStarz News employees may also have an active investment in any profiled products and/or companies.

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