Traditional Lending or Blockchain Lending — Which is better?
In this article we are going examine the different ways in which it is possible for someone to take out loan, and given the fact that we live in times of economic hardship money isn’t something that is readily available and we all at some point in our lives may need the services of money lenders. However the distinction between whether traditional lending or blockchain based lending is up for debate, and we are going to see whether traditional methods are still the way to go, or whether loans based on blockchain technology are the way forward.
When someone wants to take out a loan using the traditional methods, he or she will need to apply to a lender and fill out all the necessary forms and applications, and they normally have 3 types of loans that they can apply for which are credit-score based, guaranteed or collateralised loan. Credit-based loans include a few steps so the lender can understand the circumstances of the individual or couple, things like current income, assets, outstanding debt. All of these external factors can influence a lender’s decision about whether the applicant is suitable for loan based on their current financial situation. These types of loan are kind of like a balancing act, because if you have too much of a bad credit rating but you have a steady job and decent income, the score can influence the outcome more than anything else. However if you have a good credit score and a not so good job with a sporadic income the fact that you have all three boxes ticked can mean that the application can go quite smoothly with little interruptions.
Trittium is different from traditional lending companies because they have turned towards blockchain technology to remove some of useless lending practices. What Trittium are ultimately trying to achieve here is provide a new source of money creation through the use of decentralized technology. With blockchain, Trittium can create a system that can deliver value to dormant capital by unlocking the wealth of physical and social assets. What makes blockchain-based loans so attractive is that instead of having a loan that is backed by physical assets like a house or your car, you can have a blockchain loan that is backed by your computer’s processing power. What’s more is that Trittium doesn’t have a strict vetting process where they take a look at your financial history. It is as simple as applying for a low-cost loan and working out your repayment structure, and you won’t get penalized for paying your loan back early, which is what a lot of traditional lenders do.
The distinction is now clear about which type of loan would considered the more attractive in this day and age, and I think I speak on behalf of everyone when I say thank you for blockchain technology. Without this revolutionary piece of software, we wouldn’t have the freedom that we have today when it comes down to this sort of thing. Trittium was designed to help prevent another financial crisis and help alleviate some of the financial worries that a lot of people face in the world today. Too many people are cut off from resources that can aid them in so many ways yet they are judged, but the Trittium platform doesn’t judge, it simply grants people access to financial aid when they need it.
Originally published at medium.com on June 20, 2018.