On-blockchain credit system Ideas

[starspirit]

Is it possible, at least in the early phase, to eliminate the need for legal documents with a voluntary reputation-based system?

This is not a complete description, but to give some rough idea...For example, suppose credit limits began very small per user (on the requirement they submit unique id and address to a trusted third party), and only increased over time with successful interest payments actually made on debts, and with proof of work done within the Bitshares environment (e.g. number of posts, brownies, github contributions etc). [In principle those that have already built a proof or work could begin with a higher limit than new users]. Because of the work and expenses required, there is no incentive to enter the system with the intention of absconding with funds.

At some later date, this work is of course a sunk cost, and a borrower/user may then choose to change their mind and not repay funds. But in doing so, they would be sacrificing the potential future benefits of the reputation and capital they have built within the system, as well as the impact that may have on any future endeavours they enter given that that it is permissible for the identity attached to the defaulted debt to then be made public by the administering third party.

Such a system may also encourage users to at least borrow something, and contribute in other ways, to steadily increase their credit limit over time.

[luckybit]

I have thought long and hard about this particular issue and have identified the following requirements:

1.  Every account needs to verify their identity and sign a legal document that converts on-chain debt tracking into legal obligations.
2.  Every user needs to extend credit to their friends / family
3.  Every debt needs to be marked 'for sale' to a debt collector
4.  Allow ripple style payments.
5.  Charge interest on all debts.
6.  Allow on-chain settlement of debt with bitassets.

Once you have that system in place you have almost everything except my secret sauce for making it all go viral

Is it possible to integrate or duplicate the functionality of Docusign? Some sort of automated process where a person can sign documents using their digital signature and legal name?
https://www.docusign.com

[santaclause102]

I have thought long and hard about this particular issue and have identified the following requirements:

1.  Every account needs to verify their identity and sign a legal document that converts on-chain debt tracking into legal obligations.
2.  Every user needs to extend credit to their friends / family
3.  Every debt needs to be marked 'for sale' to a debt collector
4.  Allow ripple style payments.
5.  Charge interest on all debts.
6.  Allow on-chain settlement of debt with bitassets.

Once you have that system in place you have almost everything except my secret sauce for making it all go viral

What do you mean by "ripple style payments"?

[Ben Mason]

Intreaguing!!

Just an idea but could we use smart contract functionality so that if someone wants to borrow for rent or a bill, the money gets routed directly to the cause of debt, thereby decreasing the temptation to miss-spend the loan which can compound the problem?  Is that overly intrusive?

[bytemaster]

I have thought long and hard about this particular issue and have identified the following requirements:

1.  Every account needs to verify their identity and sign a legal document that converts on-chain debt tracking into legal obligations.
2.  Every user needs to extend credit to their friends / family
3.  Every debt needs to be marked 'for sale' to a debt collector
4.  Allow ripple style payments.
5.  Charge interest on all debts.
6.  Allow on-chain settlement of debt with bitassets.

Once you have that system in place you have almost everything except my secret sauce for making it all go viral

[Ben Mason]

Welcome Hunter_S!  I think there are plans to build a bond market once 2.0 has been released and is stable. I'm not sure if that functionality is  requiredin order to implement the great ideas you've raised.

I think anything that can reduce the cost of borrowing via p2p would be brilliant. The main people need interest or to take risks with their Capitol is to keep up with inflation/theft. If we can deal with that issue, perhaps we'll be able to lend securely at any scale, p2p or part of a credit union or bond system.

[SpiritofJefferson]

I don't really post anything but I like to read the posts on here every day. So, for my first post I have a few thoughts I'd like to share on what new features we could create proposals for when DPOS 2.0 comes out.  I came across these businesses who's concepts I thought would be perfect for bitshares. The first seems relatively simple to do because everyone personally knows each other. This is puddle, a microcredit system based entirely on trust between friends.  If we could create a proposal for some sort of on-blockchain p2p credit system like this, it would be great for bitshares adoption.  To go along with the "uber for everything" trend in journalism, we would no doubt become the uber of finance.
https://www.puddle.com

This one seems to be using ripple as a platform with bitcoin as an option.  They are trying to create a decentralized credit union which is an interesting concept I'm going to be following.  It seems similar to the way puddle works but with integration of existing institutions (with ripple) and credit scores so it would be much larger than a group of friends. Harder to integrate but they are creating it for blockchains so I thought I would mention it.
http://moneycircles.com

Just some thoughts on what we might want to propose when DPOS 2.0 comes out.  I realize we probably have many other aspects that are more in need of immediate attention, but I would love to see a similar feature implemented into bitshares.  It would allow the community to open up capital to each other, borrowing and lending to fund more development of businesses in our ecosystem and much more. I think we can do much better than ripple in this area for obvious reasons (collateralized assets, profitability, paying workers via blockchain, etc. etc.). Any thoughts?