The Dutch Auction system helps establish an equilibrium interest rate that is beneficial to both parties. The company has partnered with Jumio, a document verification provider. The loans made on the site have totaled to over 3.500 BTC.
Also read: How To Save and Protect Your Bitcoins
BitLendingClub’s CEO Kiril Gantchev told CoinDesk: “The funding is an extremely important milestone for BitLendingClub. It has allowed us to validate our idea and to increase our efforts in the development of our platform.” Other Peer lending platforms such as BTCJam have also raised funding from investors.
Bitcoin, as a currency, is ideal for peer-to-peer loans. The decentralized nature makes it easy for lenders to be matched with borrowers. While there is increased risk with lending in Bitcoin, lenders can take matters into their hands and involve the authorities should a borrower not follow through with the agreed terms. If the loan falls through, the identity and location of the borrower is disclosed to all of the lenders that decided to lend Bitcoin to that borrower.
Bitcoin makes it possible for peer-to-peer lending platforms like BitLendingClub to offer good opportunities for both lenders and borrowers. While BitLendingClub is beneficial for people looking to get small loans without putting their credit on the line, the interest rates are typically much higher and the risk for investors is much greater than a traditional loan that is backed by the law.
What do you think about Peer-to-Peer lending platforms? Comment Below!
Images from Shutterstock and BitLendingClub.
This post was last modified on (Eastern Time): 25/10/2014 11:06