Sometimes, getting a conventional loan can be very difficult. You might find that any companies that offer personal loans will then charge absolutely huge fees, and require you to jump through hoops, which can make turning to someone for help very difficult indeed.
More and more people, particularly young people are turning to friends and peers for advice on loans, or even for the loan itself, because they simply do not trust banking institutions to help them out. It is more than likely, that these same group of people would actually trust modern blockchain technology and cryptocurrencies like Bitcoins more than they would conventional banks.
Turning to other means
This distinct lack of trust from banks has led to underground lending, which run the risk of having very high interest rates, but, on the flip side, there is no centralised institution to come in and take profits, or drive the regulation.
What is the answer?
According to some experts, there is a simple answer to this, in the form of blockchain technology. Blockchain technology has already changed the way in which we think, especially with regards to the banking and financial sector. Well, it could now be the answer to personal lending problems as well. Alex Mashinsky, CEO of Celsius agrees with this stance, saying;
“The Blockchain is a global phenomenon that cannot be easily stopped or regulated, and it represents a new paradigm shift for the financial industry. We see this as the third wave of the internet which will restructure and force the reinvention of almost every financial process we are used to today.”
Using blockchain technology, it allows the removal of centralised banking institutions and moves lending into the hands of a peer-to-peer network, which replaces the manager with a technological solution, which allows for a far more competitive lending rate.
It is a common assumption that the Blockchain technology is moving towards having a greater role in the banking world. This sentiment is even shared by Jamie Dimon, the Chase CEO, who recently called Bitcoin a ‘fraud’, and Ken Rogoff, who said openly that Bitcoin would collapse. Despite their less than favourable views on Bitcoin, they both champion Blockchain technology, and see a future for it, whether this is with or without Bitcoin.
References and Further Reading:
- The CoinTelegraph; Need Personal Loans? Blockchain is here
- City A.M; When blockchain meets online lending: The business using one to improve the other
- Forbes; Disruptive Blockchain-Backed SALT Loans Platform In Launch To Leverage Bitcoin Assets
- Cryptos R Us; Need Personal Loans? Blockchain Is Here
- SALT; What is a blockchain-backed loan?