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The world of borrowing has undeniably changed in recent years and so has the world of technology.

Blockchain has proven to be one of the biggest differences and alterations in the way money works and it is still in the relatively early stages of existence.

People are expecting this technology to become more closely intertwined with the way we live in the coming years.

Some people are still a little bit confused by blockchain and how it works. Though it isn’t necessary to know exactly the ins and outs of the technology, it is a good idea to be aware of how it impacts things.

It definitely has the power to transform personal finances and lending is one of the areas that it may cover.

Other Industries Impacted by Blockchain

We are already seeing the effects of blockchain as it has been embedded in certain industries. We have seen some big retailers accepting cryptocurrency as a form of payment. Crypto is the main way that blockchain has made its mark so far.

The technology allows for peer-to-peer finance with no need for people to use a middleman such as a bank.

One of the prime uses of this has been in the casino industry and some studies even suggest that there are more Blockchain transactions in casino games than in any other industry.

The way that the high-tech payments work and give players a fast and anonymous payment method has worked well with some of the other aspects of gambling.

Some people assume that the newer games are the ones that have embraced blockchain but we also see games that are hundreds of years old entering a new chapter due to the fact that blockchain exists. People play blackjack using blockchain technology regularly.

This is a way for them to play an old game that has been popular for centuries but to do so in a way that provides the quickest payments and some other protections for players.

Playing blackjack has been through a number of different developments including when people were finally able to play blackjack on the go thanks to mobile tech. Blockchain is another step in its evolution.

We’re also seeing other industries take note. The real estate industry is using blockchain more for things like smart contracts and we also see blockchain’s ability to streamline processes and boost trust as exactly what makes it so promising for personal lending.

Decentralized Lending Platforms May Change Things

People have traditionally had to go to big banks and other lenders for financing in the form of personal loans. But there is now the option of blockchain which could provide a decentralized alternative to traditional lending.

By using smart contracts the blockchain-based platforms could automate much of the lending process. People like the fact that this could cut out intermediaries and lower costs.

Smart contracts are self-executing agreements with terms directly written into code. For personal lending, they could automatically match borrowers with lenders or set repayment terms.

They even have the power to distribute funds without human involvement. Once the loan is repaid then the smart contract could release collateral or provides proof of completion.

These contracts operate on decentralized networks which means there’s no single authority controlling the process. This decentralization increases trust as the system’s integrity doesn’t rely on any one party.

 

Financial organizations are already making big changes and stablecoin development such as the 1money network’s massive investment has proven to be a big talking point in the industry as people understand the benefits of modern and DeFi methods.

What The Benefits Could Be

Do we really need this type of lending? One of the biggest drawbacks of traditional lending is the cost. Banks and financial institutions charge high fees to cover their operational expenses and these costs are passed down to borrowers through interest rates.

 

Blockchain could eliminate much of this overhead. Automated smart contracts handle many of the tasks currently performed by bank employees with things like checking a lender’s creditworthiness and managing repayments.

Without intermediaries taking a cut then both lenders and borrowers could benefit from lower fees and better rates.

 

And then there’s speed. Traditional loans can take days or even weeks to process but blockchain transactions happen almost instantly (and are also increasing in speed all the time).

This could make personal lending a far more efficient process – particularly for people who need quick access to funds.

Conclusion

This is an industry that is going to take time to change. Even though the technology is in place with blockchain, adaption and adoption are both relevant and can take a lot of time.

P2P lending already exists in a number of ways but it is thought that blockchain could help with security and other elements to keep everybody involved in the transaction safe.

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