Creditcoin: Why it’s a big deal
Everything from student loans to cross-border bond transactions relies on credit loans. But today, these financial infrastructures are increasingly expensive, inaccessible, and even unavailable in developing countries.
Creditcoin aims to solve these issues and make credit loan/repayment services available to people around the world without restrictions.
Creditcoin’s cryptoeconomic incentives help people in developing countries receive unsecured credit loans and create objective credit history data. The Creditcoin Credit Network helps network participants make rational investments and financing based on objective credit history data. Creditcoin network miners provide stability to their credit history network. A resilient infrastructure provides an alternative to credit lending services that large financial institutions previously could not provide due to cost concerns.
This article provides a brief overview of the history of credit lending services, then explains how Creditcoin is implemented and what you can do with Creditcoin.
Let’s begin with the history of credit loan services.
A brief history of credit loan service innovation
Credit loan services have been available to everyone since the days of King Hammurabi around 1800 BC, but always had to be done with a trusted middleman. No matter how trustworthy the middleman was, a fundraiser even took a family member or slave as collateral for certain credit.
As time passed and through the ancient and medieval eras, personal collateral disappeared, but due to the lack of objective credit history, interest rates increased volatility, and events affecting the financial industry were repeated. Various attempts have been made to solve this problem, and eventually, authoritative institutions such as financial authorities and large banks have emerged. While these banks play a role as trusted middlemen, they have increased the basic cost of accessing financial services and has been a source of financial disaster due to excessive pursuit of profits.
In addition, financial services have been difficult in developing countries due to cost issues. To solve this problem, Muhammad Yunus started the Grameen Bank project in 1976, and then incorporated it in 1983 to establish the world’s first unsecured micro-credit bank called Grameen Bank. The bank has achieved an average recovery rate of over 95% through microcredit loans and has grown into a huge bank with 100% financial independence. At least 4 million poor people have been rescued through Graminbank, and Muhammad Yunus won the 2006 Nobel Peace Prize.
However, these innovative service was also flawed. Grameen Bank relies 100% on Grameen Bank’s deposits for loans. In order to provide services like Grameen Bank globally, high interest rates, financial infrastructure to support them, and most important investors are required. These issues are making it difficult for Grameen Bank to expand its services around the world.
Credit loan services today are a pillar of humanity. It provides an economic flow based on credit, but it can lead to polarization and risk. At present, almost all credit lending services are controlled by large banks with a centralized credit history. Banks invest and manage based on customer deposits. Unlike credit cooperatives, banks prioritize their interests over investor safety. If the Lehman Brothers incident occurs due to these problems, depositors suffer a great loss. The system may crash.](https://en.wikipedia.org/wiki/Great_Depression)
Creditcoin: The Future of Credit Loan Services
Creditcoin is a decentralized credit network that can connect investors and financiers around the world through P2P.
I believe that Creditcoin’s credit network can provide a solution to the problems of the traditional credit lending services described above while maintaining objectivity and scalability.
Creditcoin’s credit network is basically composed of investors and fundraisers, and additionally has collectors. It forms the core of the market, where each participant places orders and pays for Creditcoins when processing subscriptions and contracts. The paid Creditcoins will be locked for one year. All of these activities are marked as “CTC”, which is the basic asset of the Creditcoin ecosystem.
Creditcoin’s infrastructure and economic model create an easily accessible market, dramatically lowering the cost of finding each other for investors and fundraisers. As a result, credit networks can become a competitive marketplace accessible to everyone. The cost of your credit history drops, attracting new customers.
At the same time, the base coin CTC economically encourages honest behavior between these parties. When an order is matched, the investor can query the financier’s credit history to determine if they have a sound credit history, and set the interest rate and repayment period. You can take advantage of these features to mitigate the risk of losing money and increase your recovery rate.
Anyone can invest and raise funds by utilizing a decentralized credit network in the Creditcoin model. In addition, a market for financing and investment is created with numerous types of cryptocurrencies as collateral. Numerous partners will use the Creditcoin credit network, and although it is difficult for individuals to access, various financial products provided at the institutional level will be available. In addition, you can easily proceed through the lending process through cryptocurrency, which was difficult due to security requirements.
I believe that Creditcoin can succeed thanks to:
The number of real users of Creditcoin is 1 million. The team of Creditcoin, Gluwa, has collaborated with Aella to enter the Nigerian financial market since several years ago, and as of the first quarter of 2020, the number of actual users is 1 million. Considering that other DeFi users are limited to cryptocurrency traders, this is a best practice that is widely used in real business.
Compliance with cryptocurrency and financial laws and regulations. Unauthorized financial products are highly likely to be subject to sanctions by financial authorities. For all future projects related to Creditcoin, we have reviewed all legal regulations from several years ago, and also reviewed the possibility of legal regulations in the future.
Properly designed network. The Creditcoin network has been thoroughly prepared for Oracle issues and objectivity issues of credit records. Ready to rebalance and recover in response to disruptive events in your network.
Objective and cost reduction. Through a decentralized credit network, financial underprivileged can have a credit record with objectivity that was not available due to existing cost problems.
Strong network effect. Gluwa has long conceived of DeFi, and has established partnerships in all parts of the world, including Africa and Southeast Asia, Europe and America, and reviewing legal matters in each country. Just as Facebook cannot be overtaken by other companies due to the network effect, Creditcoin will also have a dominant position in the market due to the strong network effect.
Creditcoin will reimagine the basic part of the financial infrastructure and enable the credit network to evolve.
I. The number of real users of Creditcoin is 1 million
Creditcoin’s team, Gluwa, was founded in 2012 to promote the fintech business, and has been preparing technology and partnerships for DeFi since 2016. For example, Aella, a partner with Gluwa, who uses Creditcoin, is competing with other financial companies in Nigeria and has 1 million real users as of Q1 2020. Others based on Creditcoin’s decentralized credit network It has an overwhelmingly low insolvency rate compared to Nigerian financial companies. Partners such as Aella are continually being added, and partnerships are underway in Southeast Asia regions such as Vietnam and Myanmar, as well as Europe and the United States. DeFi is not limited to the cryptocurrency industry, and there are no examples of widespread application in real business on Earth except for Creditcoin.
II. Compliance with cryptocurrency and financial laws and regulations
Creditcoin’s distributed credit network was designed from the initial design in anticipation of the blockchain industry being incorporated into the institutional sphere. In addition, Creditcoin is designed for the purpose of implementing real business using blockchain. In order to respond to regulations, we have prepared to comply with current cryptocurrency and financial laws and regulations, as well as to respond to laws and regulations that will be applied in the future through the best legal advice in Korea and the United States for all businesses related to Creditcoin. It. Currently, when extensive cryptocurrency regulations apply, it differentiates itself from other DeFi projects whose future is unclear.
In addition, Gluwacoin, which will be used in conjunction with Creditcoin, is registered as a financial service business in the U.S. Financial Crime Control Network, and complies with the Bank Secret Act, the Federal KYC, and the Anti-Money Laundering Act. In addition, we are regularly audited by Korean and US accounting firms to ensure that the amount of Gluwacoin issued and the fiat currency held is the same.
III. Properly designed network
Even if there is an Oracle issue in the Creditcoin credit network, it can be resolved through due diligence so that the service linked with Creditcoin can be resolved without problems. And, even if there is an omission in the Creditcoin credit record, it is fundamentally designed to solve the entire service using Creditcoin without failure.
There are two cases in which record omissions occur. The first is when the partner does not properly record, and the second is when a problem occurs in the chain. In the first case, this cannot happen because the damage suffered by a partner that has not been properly recorded is greater. Therefore, under any circumstances, there are no fundamental problems with using the Creditcoin network.
IV. Objectivity and cost reduction
With the Creditcoin decentralized credit network, 1.7 billion financial unbanked people who have been unable to access credit loan services due to cost issues and environmental issues that do not have access to banking infrastructure can benefit from unsecured credit loans. In addition, partners using Creditcoin can reduce both the cost of going into the infrastructure required to manage their credit history and the cost of acting as a trusted intermediary through an objective credit history. In addition, the accumulated objective credit records can be used as powerful data in future large and small businesses.
V. Strong network effect
In order to conduct financial business in various markets such as Africa, Southeast Asia, the United States, Europe and Asia, effort and time are the most necessary. It takes tremendous effort and time to meet diverse people from all over the world and establish partnerships. Creditcoin production company Gluwa has started its business in 2012 and has entered into partnerships with numerous countries around the world including Africa, Southeast Asia, the United States, Europe, and Asia until 2020, and other businesses are also ongoing. . In addition, there is data using Creditcoin by Aella, who has been doing business in Nigeria for many years, and other partners and users will flow into the Creditcoin credit network in the future, and the data to be recorded will be a difficult wall for other competitors to overcome. is. In the case of DeFi, which was used only by cryptocurrency users, it will be more difficult to keep up with the competition.
Finishing the article
Credit loan services are an integral part of our lives. However, in the past, there were also people who couldn’t use the service because it was essential to have a trusted middleman to vouch for their credit history. Credit records are a key component of your financial infrastructure.
Although various advances have been made in how to manage credit records, serious economic, political and technical problems remain with the current infrastructure.
I believe that Creditcoin represents the next evolutionary step in how you manage your credit records. Decentralized, objective and mitigate the threat of vulnerabilities. Properly designed incentives allow Creditcoins to operate without a single operator. New market entrants can create new networks and leave credit records. Perhaps most importantly, Creditcoin’s ambitions are being realized by a team with deep expertise and experience in the financial industry and blockchain services, which has long foreshadowed that the blockchain industry will be incorporated into the institutional sphere.
I am proud that Creditcoin entered this early stage quickly and guided the decentralized credit network.