The number of unbanked according to the Global Findex Database by the World Bank released in 2017 was estimated at almost 1.7 billion. Credit scores which help people gain loans are based on bank accounts, and so the unbanked have no reach to their credit scores. There are many other issues Credit scoring has come into the light for with regards to disrupting the whole credit market for both lenders and borrowers.
In comes Bloom (BLT) which takes the credit scoring to a more decentralized network of access to credit services thanks to Blockchain technology. Bloom ensures people around the globe have access to both the traditional lending market in fiat and the digital asset market in cryptos while solving numerous problems faced in the current centralized system of credit scoring.
Problems Solved by Bloom
- Worldwide Recognition of Credit History – Many times a person may spend years working hard on achieving phenomenal credit scores in a country, only to have left no impression in a country they relocate to due to work or other reasons. Bloom solves this problem by integrating a person’s credit score so that it can be assessed in any country of the world, instead of the person having to work hard again to ensure his credit line is met.
- Analysing Credit outside Historical Data – Many of the unbanked, and the youth cannot gain credit as quickly as there is no history on debt repayment. Bloom looks at previous records of the person and not just financial statements to analyse if the person has the capabilities of a credit.
- Worldwide Market for Lenders and Borrowers – Both lenders and borrowers can now borrow from beyond their country’s border thanks to the decentralised Blockchain platform of Bloom. It gives scope of people in a country with a less developed financial infrastructure to expand into borrowing and lending taking advantage of another country’s financial resources.
- Privacy of Data – When applying to gain a loan, a person has to declare personal information to the financial institution which can lead to information being exposed. However, Bloom secures this with a Blockchain system which is secure and private, disclosing only the essential details to the necessary parties.
- Reduced Costs – Centralized agencies charge a lot of money on interests and fees. Bloom enables a decentralized approach whereby the lender is able to determine the interest rate they want to charge. A lender will be able to provide competitive rates to people with good credit scores. Since Bloom is decentralized it opens into a worldwide market of peer to peer lending, which leads to competitive interest rates provided by lenders.
Components of Bloom
Bloom is developing three components to ensure the credit system is completely decentralised globally.
- BloomID – Identification of creditworthiness of an individual through third-party relations such as friends, family and organisations they have worked for in the past. The attestations are provided through the Bloom protocol. Data is not stored on the Blockchain and thus there is no room for hackers to steal personal information. BloomID allows individuals to register and authenticate on websites, applications and even when applying for a banking facility. This is done using one-time secure keys through Ethereum Whisper
- BloomIQ – Management of credit history, with features of importing past credit history of another country to the individual’s profile.
- BloomScore – Calculation of risk involved in giving credit to an individual. It takes into account the BloomID and BloomIQ to come to an overall indication if the individual is creditworthy.
The native token of Bloom is BLT which serves as a number of purposes for Bloom’s decentralised credit rating platform.
- Voting Rights – Bloom is not centralised and thus gives the people the right to vote for decision making of the Bloom protocol.
- An incentive for Identity Attestors and Risk Accessors –
BloomID makes use of third-party recognition and so individuals or organisations that help in analysing if an individual is worth giving credit to gains BLT. They are able to set the required BLT that they will charge.
- Application Fee – The Identity Attestors and Risk Assessors have to pay an application fee, and so it is paid in BLT which is given back to the community that votes for them to carry out the eligibility criteria.
There is a total supply of 150,000,000 BLT, with an ICO price of 1 BLT = 1.16 USD (0.00151800 ETH). At the time of writing it is at US $0.159266 (0.00076496 ETH) which shows that the overall confidence of Bloom is not faring well. The total market capitalization is only $7,610,507 USD according to CoinMarketCap.
A steady team lead by 4 serial entrepreneurs which have the right mix of prior experience in customer relationship and the use of technology for verifications help Bloom with their aim in the credit market.
The team consists of Alan Meier who is also the CEO of Cognito, which is a company that automates the identification of customers using API to help in recognizing customers. His experience in the field of identification is crucial for credit scoring in Bloom.
Jesse Leimgruber uses his expertise in influencer intelligence from being the CEO of NeoReach to help Bloom in underlying intelligence to grow it as a decentralized credit rating system.
John Backus is the technological brains who ensures that the identification of customers is done with the help of API. His accomplishments as the recipient of the Thiel Fellowship portrays his extraordinary personality of achieving to build new systems.
Ryan Faber helps in his insights in digital marketing which drives Bloom forward. He is the CEO of Flatiron Collective which is a digital marketing company with over $100 million in ads spending a year.
The partnerships alongside Bloom help the decentralized credit rating project succeed in their overall mission with teams that share the same vision.
Everex – Everex collects data from the Ethereum Blockchain related to the credit scoring system such as money transfers, payments and loans. The data is shared to BloomIQ.
- ETHLend – ETHLend will further expand Bloom’s credit market resulting in more lending partners
- Lendoit – Will use Bloom’s score providers mechanism to boost their platform of connecting borrowers who apply for loans through Smart Loan Contracts.
- Self Lender – Helps people establish credit history and will tie up with Bloom to help Bloom establish sources of borrowers.
- Fundary – A peer to peer lending platform which will help Bloom expand it’s lender market.
- Karma – Karma and Bloom will both help expand their loan markets as Karma is also a global decentralized platform.
- TypingID – A user verification system that helps identify the user who applies for the loan, or is lending. The artificial intelligence used by TypingID is very helpful to distinguish between true profiles and the phonies.
- Gems – A decentralized application for micro tasks which will ensure a reputable customer base thanks to Bloom’s verification of users.
- FintruX – FinxtruX is a global p2p lending ecosystem which will utilize the credit scoring capabilities of Bloom.
- District0x – This partnership will help Bloom prosper to a decentralized lending platform for anyone with internet to either lend or borrow from or to the credit market.
- BMW Group Financial Services – Bloom was selected to join the first BMW Group Financial Services U.S Collaboration Lab, where it was selected in the ‘Building a Blockchain Strategy’ category. Bloom will colloborate with BMW Group Financial Services to lend a hand in enabling Blockchain in the automotive and financial sectors.
- American Express Middle East – The latest partnership helps American Express Middle East’s ACCELERATE ME program be driven by fintech technology. Bloom’s approach to a more secure and data driven credit scoring methodology helps American Express Middle East achieve a more tech-savvy solution to traditional credit scoring data to make it more streamlined.
Future of Bloom
Plans of helping the whole process of credit scores to be as reliable as possible with features such as the BloomCard. It is a credit card built on Blockchain which will further help in establishing a credit score for an individual.
The social media giant, Facebook in the last week of October banned advertisements from Bloom. According to Facebook, Bloom is promoting misleading financial services to which Bloom’s co-founder Jesse Leimbruger claims that the social media is afraid of competition.
Leimgruber highlighted that Bloom’s service known as BloomID which is applied when signing into web services and applications is a competitor to Facebook’s Login service.
One thing is for certain, Facebook banning Bloom may be even better marketing for Bloom than marketing on Facebook itself. Mainstream media has already brought into light Bloom’s extraordinary features to its readers and viewers.
Bloom has an excellent team of Stanford Graduates, with a very important solution to the overall credit market around the world. The partnership’s and efforts taken are in the right direction. This is definitely a project to watch out for.