Typically, when we think of taking a loan, we think of going to a bank, filling out a ton of paperwork and then getting denied the loan unless a guarantor or cosigner signs as well. However, blockchain banking startups like Salt and Coinloan aim to change this by creating a peer to peer lending platform on the blockchain. These platforms allow users to leverage their bitcoin and other cryptocurrencies as collateral for fiat loans. Lenders will post the terms that they are willing to lend, and borrowers will select the loan terms that best suit their needs.
The Teams Behind Salt and Coinloan
Salt hails from the land of the free, a.k.a Denver, Colorado, USA. Their CEO Shawn Owen, has a LinkedIn profile detailing his journey as a serial entrepreneur with F&B and the hospitality industry. It also shows Shawn to be an early adopter of bitcoin, since early 2011. Other members of the Salt founding team have a background in fintech as well as banking. One notable adviser in Salt is Erik Vorhees, a prominent member of the bitcoin community and the CEO & Founder of ShapeShift.
On the other hand, Coinloan has Baltic roots and is headquartered in Estonia. Their CEO Alex is an entrepreneur with 7-years experience in Finances and IT. He has a very strong technical background and even graduated with a Masters in Applied Mathematics and Informatics. Prior to founding Coinloan he was the Founder of IT Security group, a company that specializes in developing security solutions for payment processing and blockchain technologies. Most of the founding team from Coinloan used to work in IT Security group as well.
How Peer to Peer Lending Works
Lenders commit cash fund to the loan and at the same time, the borrowers will post their collateral blockchain asset in a multi signature smart contract. Borrowers can post bitcoin, litecoin, ethereum and many other kinds of cryptocurrencies. The borrowed funds are deposited directly into the borrower’s account. After that, the collateral assets are stored and the borrower will make monthly payments on the loan. Once the loan is paid back, then the collateralized asset will be paid back to the borrower…