I agree with you, assets should only be what is accountable and liquid on the block-chain to protect its value, on the other hand, I don't see where the obligation of the loan-bearer is assured. Were btc payments not built around anonymous transactions from day 1? Can somebody explain how and what collateral is established in these products?
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Assurance of repayment doesn't need to be a feature of a credit system. Reputation is the important feature, where lenders can see a borrower's history of repaying small loans in consideration of offering terms on a larger loan. If repayment was assured, there would be officially zero risk to the lender, making loan issuance a job for a bot instead of a judgement call for a human.