Distributed credit chain is a banking blockchain that is meant to cause ecosystem to change from being concentrated providers of financial service and become a distributed financial service all over the world. Distributed credit chain work is to change all manner of financial level in other to get true satisfaction from all level of finance.
The main reason of establishing a distributed banking is to put an end the dominance of the conventional financial institutions via financial service that is fair.
Benefits of Distributed Credit Chain
• It gives back earnings from financial services to every individual who contributed to the growth of the ecosystem.
• It will transform the model of cooperation which is found in the conventional financial service.
• It creates a platform which brings about peer to peer.
• There is communication cooperation model which you can get in all regions, subjects, accounts and sectors.
• It has the power to change the conventional banking’s debt, asset and the entire business structure.
Problems found in centralized service
• Cost: I want you to know that the core model of any credit agency is to share the costs (which they bring upon theirselves) by an element which is of no interest. Such elements are data, credit review etc. the loan that was collected is not repaid and this is done by putting the cost on the “good guys” that has the power to pay back the money. You should know that if you are a borrower, it brings an extra charge.
• Efficiency: it may interest you to know that from the view of the credit agency, important time and efforts are wasted in confirming the credit of borrowers who do not meet the risk standard set by the agencies. This leads to the waste of resources and serious run down of efficiency.
• Profiteering: in profiteering, there is a centralised credit model which in a way attracts many financial institutions and makes them change from their initial plans – serving customers. Profitability is the point intended to be hit; they take from lenders while borrowers are squeezed. Here they try to make sure their profit is expanded and at the same time extended the base of their customers.
• Joint Debt: it is noted that the issue of joint debt has massively affect the progress of the industry and has bring about major social concerns. Looking at a borrower’s view, debt information is “hashed” by several credit agencies but nobody should be aware of the history of their loans and repayments. It should just be borrowers themselves. It is very to put up a centralised institution to carry out individual credit reporting.
• Borrower’s Interest: borrower’s does not have the ability to make clear their credit, which makes mediators very important in the underwriting of consumer credit. I want us to wave away information that is false and look at normal operations; I want us to talk about countries where you have underdeveloped credit system. In those countries the size of the loans which is affected much by the already prepared material. Now this makes the borrowers not know their interests and rights. It also stops borrowers from pilling up their credit effectively. We will use China as example, in China; to create a credit profile is the primary aim for more than half of young credit card applicants.
How distributed Credit Chain find answers to their problem
• Providers of Data Service: in this part, they integrate individual data. They try to store them on the chain; clean data is dirty and finally provide data that are standard.
• Borrowers: if you are an individual and you have a specific borrowing demand, try to establish a block chain account. This will authorize providers of data service and bring up borrowing request.
• Providers of Computation Service and Algorithm: this try to draw out characteristics from data, there conclusion is based on policies. Finally they determine the value based on characteristics.
• Funding providers: they do not have a direct involvement in lending but provide funding. Provide funding such as ABS-purchasing institutions.
• Feedback of Credit History: the report of the approved credit history gives rise to block chain stops problem. Such problems are long term borrowing and repeated test borrowing.
Advantages of Distributed Credit Chain
• It breaks the monopoly of conventional financial institutions.
• It changes the structure of business.
• It transforms the cooperation model in conventional financial institution.
• It helps with government regulation.
On this article, I want you to know that distributed banking is not a conventional bank, it is an integrated ecosystem. Distributed credit chain is what you can apply in many circumstances in financial area. Distributed credit chain is currently trading on top exchanges such as kucoin, bibox and just recently on Fcoin. For more information on Distributed credit chain you can chat up any of the telegram admin t.me/DccOfficial or visit their website www.dcc.finance or read the whitepaper http://dcc.finance/file/DCCwhitepaper.pdf
White paper: http://dcc.finance/file/DCCwhitepaper.pdf
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