The traditional credit score and risk assessment system that financial institutions use to verify whether someone is credit-worthy, leaves a lot to be desired. In the United States, credit scoring is controlled by one single organization (FICO) and it requires borrowers to first take on debt before they can receive a credit score, leaving millions of people unscorable.
Other countries either work with similar scoring systems or they require potential borrowers to submit proof of credit-worthiness through other means. There is no such thing as a global credit score system, meaning that credit scores from one country are not transferable if you move to a country that uses a different system.
Bloom is a decentralized end-to-end credit score protocol built on the Ethereum blockchain, that provides both traditional and cryptocurrency lenders with identity verification, risk assessment and credit scoring of potential borrowers. In simpler terms, this means that you can receive a credit score via Bloom, not by going into debt, but by providing other types of information to prove your credit-worthiness. This information is securely stored on the blockchain, in a way that keeps you in control of your data & protects you against identity theft.
Compare Bloom against other financial DApps on State of the Dapps!
Building Your BloomID Reputation
After you've registered and logged in (requires Metamask), you will be greeted by your Bloom identity and reputation overview. You will have to gain 'Strength' in order to build your reputation on Bloom. You can easily do this by providing Bloom with identifying information through various means. You'll also notice a BLT token balance on your profile, these tokens are currently mainly used as a proposal mechanism on Bloom. You can purchase these tokens on various exchanges.
At a later stage you can also provide Bloom with proof of your finances. Keep in mind that this info is only available to you and as soon as you submit this info, it will be encrypted. You always remain in control of your data, you choose with which institutions or services to share this information with.
As you can see, it's easy to start building your profile strength. Completing the Starter & Social Set only takes around 10 minutes, as soon as you submit these bits of data, you will be prompted by MetaMask to encrypt them. The higher your profile strength, the more access you will have to various financial service providers that make use of Bloom's credit score protocol.
Real-World Applications
By having control over both your credit scores and your personal identifying information, you can easily submit this info to services that make use of the BloomID protocol. This may remove the need to provide companies with KYC through different services in the future, thus protecting you against possible data-breaches.
Currently, there's already one loan service that makes use of BloomID, you can already apply for a loan through Monevo with your existing BloomID. More banking services are ready to implement BloomID soon, as you can see on the Bloom Marketplace.
Bloom enables people who currently do not have access to traditional banking services, to potentially receive loans or other services from financial institutions. It is completely border-less and if it manages to get adopted by enough businesses, we might start seeing a shift from traditional credit ratings, to this new form of decentralized credit-risk-assessment on the blockchain.
What Bloom Could Improve Upon
Currently, much of the technical information is laid out in the whitepaper and various blogs scattered on their website. especially information regarding the security of personal data, is often explained in a very technical manner. In my opinion, the information regarding the security aspects of Bloom should be explained by making use of laymen's terms & it should have a more prominent place on their website.
Bloom does not have an FAQ page on their website, which is something I really missed when writing this review of their DApp.
It also wasn't immediately clear what the BLT tokens intended purpose was, while they did have a prominent place on my Bloom profile dashboard. Again, users should not have to read the entire whitepaper to find that information.
How Does Bloom Stack Up Against Top Ethereum Finance DApps of 2019?
Conclusion
When I first heard about Bloom, I thought that it was going to be yet another project that had made wild promises, without being able to deliver on them. My opinion completely changed when I actually went to their website and saw what they had already accomplished.
I was surprised to see that they had already made connections with existing banking service providers and that their BloomID system was already working as well as it did.
Sure, there is still room for improvement, but I have to commend them for having created such a great protocol to offer decentralized credit scores, identity verification & risk assessment for financial service providers to make use of.
That's why I have absolutely no problem giving them 4 out of 5 stars!
Links
Bloom's profile on State of the DApps
Bloom Website
Disclaimer
This is not financial advice. Please do you own research before investing in cryptocurrencies or any digital asset. This blog post is done for entertainment and knowledge purposes only.
Images are screenshots from the respective website, using them consists of fair-use.