The number of people and businesses using Peer to Peer (P2P) lending ballooned during the global recession, as banks withheld loans to small businesses and individuals with less than perfect credit scores. But would you lend money to a complete stranger, even with collateral? How can you be sure they will pay you back? How can you even be sure that the person is who they say they are?
Credito Network hopes to ease these concerns by creating a “financial decisioning platform” that uses an algorithm to generate a credit score. This “Credito Analytic Engine” promises to revolutionize global finance (You can never accuse ICOs of modest ambitions) by decentralising the system of credit scoring and making it transparent. The Ethereum blockchain is a huge ledger system and all of the transactions are there to see, so argues the whitepaper, and the more a person uses the Credito Network the more accurate their credit score will become.
Furthermore, billions are being lost each year to credit card fraud and other financial malfeasance. Credito promises enhanced KYC procedures and anti-money laundering checks to secure the Credito Network.
Structure
Credito will offer three services:
Credito Score-the credit rating side of the platform
Credito Transaction Score-a real-time indicator of the likelihood that the transaction is fraudulent and
CreDApp-the P2P cryto collateralized crypto lending platform
Currency: Credits
Before you tear up your bank account book, I must report that this is all theoretical at present. There is no date listed for a crowd-sale, where half of the one billion tokens available will be up for sale. There is no beta site to explore. The whitepaper is a good read, but leaves one with the feeling that these guys have all the answers on paper, but delivering this service is going to be very challenging.
Science fiction fans will be amused to know that the currency that will underpin this project is the Credit, very much the currency of the future if my memory of old episodes of The Twilight Zone can be trusted.
The Team:
So far, only the three founding members are listed on the Credito website, which is another indication that this is a project that is some months or years away from going live. Sikar Govindarajula , Narenda Allam and Harandah Gavara are experienced tech entrepreneur, although they have set themselves quite a monumental task with this project. Just as this article was about to be published Credito announced the addition of Raja Sekhar Kaliki, the Director of Google Technical Services.
If you missed the news yesterday, we have added a new advisor to our team, RajaSekhar Kaliki!https://t.co/hvWlDaQdmO
Check out his LinkedIn!https://t.co/uBNfXkqK3w
Under RajaSekhar’s guidance we will be developing the core of Credito — The Analytic Engine.#ICO #ICOs #Crypto
— Credito Network (@CreditoNetwork) January 17, 2018
Social Media Presence
Facebook-492 followers
Twitter-578 followers
Linkedin-13 followers
Medium-56
Telegram- 239
It is clear that social media presence is still a work in progress for the Credito team.
Website and Whitepaper.
Credito’s website only function is to link to social media channels and the company’s whitepaper. It must be assumed that once the crowdsale is on the horizon, the website will serve a more meaningful function.
As mentioned, the whitepaper is readable, which is more than can be said for many whitepapers out there. However, for such a complex and ambitious project it might be surprising to learn that the whitepaper is only 20 pages long. It is high on aspiration but not always satisfying in detailing how these aspirations will become reality.
The problem that Credito claims to address is the unfairness of the current credit scoring system and the prevalence of fraud in the credit industry. It’s this latter claim that particularly fails to convince. There is nothing to indicate that Credito’s procedures will be any more robust than the average high street bank.
Competition:
There have been many ICO’s over the past twelve months offering peer to peer lending, or other forms of financial credit services. Bloom, a new startup being run out of Stanford is targeting the same problems as Credito (although it will not operate a lending platform itself) is far ahead in terms of social media presence and has already raised more than $40 million in its token sale. There are many other ICOs offering loan services: Inc, Celsius, SALT to name just three.
Last year, Reuters reported that US credit agencies Equifax and TransUnion had joined trials of a Canadian identity network that uses blockchain technology to combat identity fraud. So, Credito and other new platforms like it, may find that the mainstream credit reference agencies that they hope to depose are well aware of the benefits of blockchain.
Conclusion
Nobody likes credit rating agencies and, let’s face it, nobody particularly likes banks, so it is tempting to dream of a world where everything is decentralised and the ordinary folks finally get their moment in the sun. New tech companies presenting themselves as benign entities whose mission it is to break the status quo and overthrow the big fish must be viewed with scepticism. After all, everyone is hoping to make their fortune and where there are winners, there are usually losers.
The credit scoring system as it stands is unfair to migrants, young people and low earners, and there is strong evidence that very few companies hold a disproportionate amount of power, but even with advanced technology, data can only be collected once the borrower starts to build a credit history, and this is unlikely to change with blockchain.
Perhaps the future of credit is on the blockchain, but the mainstream banks are already seeing this potential and other ICO’s as well as Credito are making fast progress to reach the market. This is a challenge they will need to address if they are going to succeed.
