The credit industry was invented back in the day and its history can be traced back a long way at the commencement of civilization. It can be confirmed with a 3,000-year-old written loan contract from Mesopotamia. This demonstrates the practical activity of such a paid economic activity. The question arises: What would happen to the progress of human civilization without credit’s help? Definitely, the massive expansion of human civilization would be hindered and very little or no progress would have occurred by now. For example, let us consider Spain which has recently explored into the new world. It is borrowed loans that aided Spain to explore the New World and propelling the Industrial revolution. These loans provide a huge progress to developing countries and have also enabled these countries to establish and run the greatest projects from time memorial.
History reveals that before the 18th century, collaterals was used by lenders and the key type of loans was known as the contractual loan. After that, now in the early 19th century, a new type of loans was established on a more equitable platform. One of the first savings and loans associations to be invented in December 1816 was the Philadelphia Saving Fund. Its initial aim was to enable Americans to access loans and savings resources.
During these era, when gathering mortgages, most of the lenders use FICO scores. This began in 1959 and is going on to date. Most lenders use FICO scores because it helps them make sound and proper decisions involving credit decisions.
The credit industry has grown into a billion dollar industry because of the fact that almost everyone needs to borrow money at one point in their lives. The advancements in technology has led to the development of mobile internet, these causes the emergent of big data whose main function is to make credit decisions. There are three methods by which these big data can use to obtain market share: The first is data mining, monitoring, comparison and differentiated competition; the second involves analysis and decisions based on the experiments and data; lastly is marketing and adjustment based on the big data.
Main challenges in Credit which DCC seeks to address
Research reveals that credit enterprises that have integrated data-driven credit platforms in their systems have a very efficient credit system and this reason motivates the participants of those networks. However, many credit businesses are bogus and have loopholes at every stage. The traditional financial industry comprises of a highly centralized system. Financial transactions in these old traditional credit industries rely entirely on endorsement plus support from large commercial institutions and in the long run i,ts users are compelled to pay expensive transaction fees to these institutions. Other challenges faced by these credit business include; unclear rights and interests, expensive operating costs, inefficient operations, fake credentials and privacy leaks.
The above-mentioned challenges compel everyone to find a solution through the underlying public chain that is built on the features of blockchain which include decentralization, openness, autonomy, irreversibility and privacy protection. These problems arise during the provision of services by fragmented parties through different types of centralized systems. These centralized systems create an enormous instability and increase the risk of counterfeiting. Fragmentation, on the other hand, increases mutual benefit and rises trust costs by a huge margin. Privacy is also not guaranteed since the data is not properly encrypted during delivery. Failure of users to authorize utilization of their data compromises privacy of that data.
Distributed Credit Chain (DCC) is a distributed community banking blockchain whose aim is to develop an underlying public chain that will assist financial service providers all around the globe. Of course one may wonder how the company intends to achieve this. D C C integrates credit with the newest technology (blockchain technology) and returns data ownership to people. This will make D C C able to make transformation of various financial scenarios and realize proper comprehensive finance.
How Distributed Credit Chain resolves issues
- Borrowers
Users who have a specific borrowing demand are permitted to create blockchain account to authorize service provider and start enjoying the comfort of making borrowing requests. - Data Service Provider
DCC’s platform integrates the user’s individual data (Both clean and dirty) and stores them on the blockchain and also provides users with data standards. - Algorithm and Computation Service Providers
The company uses exact characteristics from data to make judgments based on policies and quantity judgments are made from the characteristics. - Credit History Feedback
Distributed Credit Chain employs the use of the approved credit history generated by these Blockchains to minimize problems that result from long-term borrowing and repeated test borrowing. - Funding Providers
The company also is involved in using services provided institutions that do not lend money directly but instead provide funding. An example of such an institution is the ABS-Purchasing institutions. - Risk assuming institutions
This feature allows users to run a credit business by earning income by doing specific tasks and also manage loans that are due or loans that are in progress and also collect an after loan.
Why DCC is likely to be a success
- Break the Monopoly
The DCC’s vision is to break the monopoly of old traditional financial institutions that are associated with outdated procedures. But how exactly will DCC achieve this? With the help of global distributed banking ecosystem, DCC plans to return earnings from financial institutions to all users and providers that participate in such services in a plan that sees to it that every user benefits fully from the return of ecological growth. Clearly, DCC will ultimately change the way things are done in the financial system and also achieve an inclusive system of finance in the long-run. - Decentralized thinking
The Distributed Credit Chain’s platform will be able to change the co-operation model in old traditional financial services by the aid of distributed banking through decentralized thinking. In addition to this, the company will build a new peer to peer and all communications model of co-operation through all areas, sectors, regions and accounts. - Transform Business Culture
In relation to business, the DCC’S platform is the key to a whole new transformation for the traditional banking’s debt, asset, and intermediary business structure. The old tree like management structure will be faced out and replaced by flat structure of a decentralized bank that will also create distributed standards for different businesses and at the same time improve greatly the general business efficiency. - Government regulation
Concerning regulation, DCC safeguards users’ data and it is their policy to register all records in the blockchain to ensure that they are not altered. These enable regulators to penetrate the underlying assets in real time. Big data analysis companies will also use this huge window to help the regulatory institutions analyze and respond to industry risks faster on the basis of blockchain data analysis.
Please visit this links for more information about this project
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Article by Isaac Kimutai
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Ether Address: 0x3DBee667aD2c494a42f7A1CCE4594Fb4d8cF6580