Re:Ask HN: How to issue credit in crypto without collateral
by salimstartup on Tuesday January 31, 2023 @10:34PM
(#34606000)
Not saying we don’t need to use data. Question is - is there a blockchain solution that would allow to lend, controlling risk, similar to how people do it with digital banks nowadays
In status quo - does the bank really have to know your name and ID? I think no, the banks just need the info about you - how much do you spend, how did you repay previous loans etc? I built some fiat lending scoring engines
For the sake of discussion: - can we use transaction information in blockchain to score? - can we use some kind of credit history on blockchain? - is there a way to make sure a single person doesn’t take too many loans using different addresses? Eg use some identify key, that doesn’t disclose personal info, but makes sure this key unique per user
In the old days before the 1980s for sure, bank loans were done based on relationships - the bank manager knew you and had your business. That worked for some, but many loans that could have been weren't issued due to not having a more industrial process. In this modern era, lending officers can see your credit scores and a bunch of data to evaluate the risk of default. Even though I haven't seen the inside of my bank since 2010, I can easily get a loan based on credit data.
I struggle with why would I want to issue loans without either the data or the relationship. Maybe if you have a way to get a person's collateral and credit data on chain via a proxy, you can use that to issue a loan. But that seems like our existing structure with just extra steps...