Resumen
Peer-to-peer (P2P) lending allows primarily unsecured personal loans to be made between any two or more parties rather than requesting a loan strictly through a financial institution. In a decentralized P2P lending system, using digital blockchain technology and the global reach of the Internet, lending can be done between any interested users without any financial institution involved, and provide better terms for borrowers and lenders. The use of Smart Contracts, unique self-executing archives of transactions, is supported by decentralized blockchain authentication, reducing overhead to operate a lending platform. One such platform, Lendoit, exemplifies this system. On its website, a borrower can enter their information, upload verifiable documents, and enter their requested loan amount. Lendoit uses multiple verification sources to assign a quality score, a form of credit rating, to that request. Lenders offer bids for interest and repayment, spreading the risk rather than concentrating it, and reducing the overall interest rate in a reverse auction. Once the requested amount is gathered and accepted, the Lendoit Smart Contract then issues payment notices, collects, updates itself, or if a payment is missed, can add penalties or report default for collection. P2P lending also allows cash-out and secondary market sales, creating other markets for profit-seeking. Growth in P2P lending has already been explosive, especially in the U.K. and China, but the industry is expected to grow even faster as more platforms and potential users take advantage of the decentralization that simplifies the entire process.