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If the goal is to automate loans then why do we need cryptocurrency? Couldn't we automate loans using business data in the current world of centralized finance
by ALittleLight 5y ago
If the goal is to automate loans then why do we need cryptocurrency? Couldn't we automate loans using business data in the current world of centralized finance?
The benefit you're suggesting, that all the restaurant's transactions would be on the blockchain and so lenders could automatically evaluate the risk, is at odds with my understanding that bitcoin has high transaction costs and slow speeds and it is therefore unlikely that all of a restaurant's patrons would ever be paying with on-chain transactions. Maybe they could pay with something like a Coinbase credit card, and Coinbase could make transaction histories available to lenders - but I have to imagine something like that exists in current finance with our current credit card companies.
- spiderfarmer 5y agoRight now it’s not very easy to loan money from an entity that doesn’t have a domestic presence. Defi could make some financial products more accessible to countries that don’t have that infrastructure yet.
- Daishiman 5y agoThere is no way countries will allow these sort of cute workarounds to local regulations in finance.
- arbol 5y agoObviously bitcoin wouldn't be used for this kind of operation. Again, we're at proof of concept stage. The reason Blockchain would be preferred over traditional finance for proving transactions is because traditional finance would have difficultly integrating disparate systems and potential for histories to be manipulated. If everything is on-chain and verifiable then it makes this process a lot easier.