We all know that when one person borrows money, someone else is usually making money. This is what banks do when they make loans and charge interest, and it’s what investors do when they purchase corporate or municipal bonds.
But there is a more direct way to earn income by people money without the use of financial institutions. Peer-to-peer lending (often shortened to P2P lending) is growing in popularity, and many investors are finding that it’s a great supplement to their broader portfolio. P2P lending is also helpful to people who, either by preference or necessity, won’t borrow from a bank.
In simple terms, P2P lending happens when an online platform matches lenders with people or companies looking to borrow money. People use P2P lending services for many different reasons, from debt consolidation, home improvements, auto loans, and more. Imagine you are an individual who needs to borrow money to purchase a car but aren’t happy with the rates offered by a bank. By using a P2P lending platform, you may be able to find someone to lend you funds at an acceptable rate.
Cryptocurrency P2P Lending
There is a rising number of cryptocurrency lending applications representing an alternative to traditional loans/lending. Banks have long been the ultimate source for lending capital and borrowing to the public but that may be changing with the development of Blockchain enabled peer to peer (P2P) lending applications across the world.
Technology is emerging exponentially over any other development in human history. With the internet opportunities to connect and interact and decentralize are exploiting new business models, and disrupt legacy systems.
Currently, banks require a number of documents from borrowers such as a good credit score, previous bank statements, verification and some form of collateral to receive the loan. Even after producing all these forms of documentation, borrowers still need to wait for 30-45 days to receive the money in their accounts accepting heavy processing fees. Lenders also struggle through the current banking systems with very low rates and possible negative interest rates across the globe.
Blockchain technology allows borrowers and lenders to exchange funds without the need of an intermediary. Users "crowdsource" funds/ loans. A smart contract records the agreement on the blockchain. Borrowers are then able to receive the funds within 2 hours to max 7 days pending verification with very low transaction fees once they fulfill the conditions to execute the contract.
Some Examples of Crypto P2P Lending Platforms
- ETHLend (LEND) is a decentralized P2P lending platform that allows people all over the world to get a loan or become a lender. As a decentralized platform, using the Blockchain technology we enable you to get or fund a loan within minutes in a secure way.
- Maker (MKR) is comprised of a decentralized stablecoin, collateral loans, and community governance.
- Salt Lending (SALT) is the original blockchain-based loan, collateralizing your blockchain assets, keeping you invested while providing cash.
- Dharma is a platform for building globally-accessible lending products using programmable, tokenized debt.
- Unchained Capital is a blockchain financial services company offering cash loans to long-term cryptocurrency holders in a secure, fast, and transparent manner.
- BTCCredit is a global lending platform deploying a smart contract on Ethereum Blockchain as an intermediate. It is providing a unique reward system feature for the Lender and the borrower with its native token, BTCC Token, when a contract is deployed between them. Moreover, BTCCredit is not just crypto lending platform. It is an all-in-one decentralized crypto ecosystem which is powered by decentralised multi-currency wallet, and decentralised p2p Exchange aside of decentralised p2p lending.
Who is the best?
With the rising popularity of cryptocurrency peer-to-peer lending platforms, competition and products have increased as well. While these marketplaces operate on the same basic principle, they vary in terms of eligibility criteria, loan rates, amounts, and tenures as well as offerings.
Finally, BTCCredit has a pretty complete feature when it comes to the services offered.
- P2P Lending and Borrowing
- P2P Crypto Exchange
- Handpicked ICO Investments
- Interests through Staking
If you have interested on BTCCredit, you can apply for a loan with BTCCredit or read BTCCredit Technical Document for detail information, and follow their social media for information update.
Author's Forum Username: binar234
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