BLOOM

ECONOMIC EMPOWERMENT THROUGH BLOCKCHAIN

Written by: Michael Kitchener Website: www.hellobloom.io

A prominent trend in the various applications of Blockchain that have flourished through the emerging ICO market is in ‘banking the unbanked.’ Blockchain technology has found a noble use-case in providing credit and banking services to those who, due to living in developing economies, could not otherwise access them contributing to economic empowerment of such people and thus fighting global inequity. (Schmidt & Sandner, 2017)

The past few years have boasted several impressive projects undertaking such missions, many of which have thus far seen success. Most of these projects are geographically localised in their target market – for example: OmiseGo is aimed towards those in South East Asia and The Ripio Credit Network targets those in Latin America.

One project with a broader scope in its sights is Bloom who have created a credit lending platform with a protocol that is capable of identity attestation, risk assessment and credit scoring. The team consists of various computer science graduates and researchers from Stanford University with prestigious backgrounds and successful past endeavours.

Bloom’s niche within the credit lending sector of Blockchain technology lies in the solutions they aim to provide to several key issues they have identified with the status quo of the credit system.

Firstly, the current system is plagued by the risk of credit theft – anyone who wishes to borrow is required to reveal private information about themselves thus leaving them exposed to identity theft in that such data allows an attacker to open new lines of credit. (MacBean, 2014) When individuals relocate geographically they must also re-establish credit scores due to the fact that, currently, credit scores cannot be brought across borders. Additionally – with respect to the unfair difficulty same face in accessing credit – the fact that credit systems rely upon historical debt repayment information is an obstacle for new users who have no history.

Due to this limited identity and repayment data – borrowers in markets suffering from underdeveloped financial infrastructure struggle to gain access to credit.

Finally, there is a distinct lack of competition in credit scoring since credit data is scored by a single provider.

What Bloom does is allow for any lender who is authorised by a borrower to securely issue credit to said borrower – this system is facilitated by three features. The BloomID is a feature that allows users to create an identity with third parties who can verify identity information. The BloomIQ is a system that reports and keeps a record of debt obligations associated with a BloomID, and the BloomScore is an indicator of an individual’s reliability and likelihood of paying off debt.

This should provide globally accessible, reliable credit scores and thus facilitate access to credit to those who are unfairly barred via the current systems. As such, Bloom, and many similar projects illustrate the potential of Blockchain applications to contribute to economic empowerment through the removal of systematic barriers that are restricting growth and economic development in developing nations.