georgebtalk
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December 09, 2016, 10:38:12 PM
Last edit: December 10, 2016, 09:05:01 AM by georgebtalk |
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@Patatas, thank you for your questions. I'll try my best to address them, but please do not hesitate to follow up if I have misunderstood the spirit of your questions!
Q: Almost 90% of the platforms claim to do the same things, which you're doing with an excuse that Bitcoin isn't capable of doing them. Take decentralization for example.
The initial product we are building is an app with smart contracts that replicate the way in which Rotating Savings and Credit groups (ROSCAs) operate offline. A ROSCA is simply a group of people (typically friends, co-workers, alumni, relatives) who agree to contribute a fixed amount of money every fixed period of time (say, monthly). They also agree on how the money will be distributed/ invested. For example, it could be distributed via an auction (based on interest), or distributed if someone has a family emergency, or invested into farmland when the total funds hit a threshold. You can imagine many scenarios where the group saves and decides on usage of funds jointly.
The most common is an auction-based system, which is also a very structured mechanism for close associates to build savings together effectively - akin to group exercise. One can also view ROSCAs as a simple form of mutual insurance, where you would bid higher interest for the pool when you need the money, and you refrain from bidding until the rainy day (and accumulate interest while doing so).
The reason we start with a ROSCA is because they operate among circles of friends, and each ROSCA is invite only. This addresses case where incentives don't align between lender/ borrower in p2p networks. Personal reputation among friends and professional networks creates a drastically reduced incentive to default, relative to the decision making process used when defaulting against a faceless bank or group of strangers that have lent you money on the internet.
After groups of individuals establish ROSCAs and circles of trust that are proven via transactions and tethered social profiles, we will also build ways to connect the different groups. This will then enable creation of larger, more capable and better-resourced ROSCAs - with additional features such as organization management tools, insurance frameworks, etc...
Note that we deliberately want to start with ROSCAs because they are by nature, used among groups of individuals that know each other offline, and these groups have hundreds of years of operational history and these learnings can be built into the design. In fact, these ROSCAs are used in almost all countries and have an operational history starting near 200BC. They're called tandas (Latin America), chit funds (India), cundinas (Mexico), susu (West Africa and the Caribbean), hui (Asia), Game'ya (Middle East), kye (계) (South Korea), tanomosiko (頼母子講) (Japan), pandeiros (Brazil), juntas (Peru), etc.
Q: You know [by] making lending P2P [it] has always resulted in something terrible as seen in the past. A new platform for scams I'd rather say.
One of the biggest challenges of P2P lending is that individuals are lending to strangers, and that there are few avenues for recourse when there is a default.
What we are building is a structure to enable the activities of Rotating Savings and Credit groups, which are used among individuals that know each other. Our platform is a way to codify, track, and grow existing trust based networks, and facilitate growth of existing networks with 'nearby' networks when there is a desire to amplify the organization's capabilities to save, invest, etc... We want to start with something well known and anchor our initial community with folks who know each other personally. There will no lending between people who do not know each other until our platform is secure, is able to detect potential fraud, and has the correct incentives to deter fraud.
Q: Why do you we should trust a third party with our savings? Bitfinex said that too and we know how it ended.
Our platform creates the smart contracts that govern the savings and credit framework. We will design the platform such that we are not an attractive target. In addition, each individual and ROSCA group holds their own private keys to their accounts and there is no 3rd party that would have access. Security is a core concern of ours, and there have been too many cases like the Bitfinex example, where even the best precautions may not ever be sufficient.
Q: Do you comply with standard insurance polices or everything will be controlled by your developers?
We choose ROSCA as entry point (simple and doable given unstable platform environment) and will build out insurance products as this platform grows and become stable. Insurance isn't quite ready yet for the blockchain, but the ROSCA will be a stepping-stone that facilitates the creation of trust networks, which is the foundation for mutual insurance. Rest assured, the insurance product will not be built unless we see a clear path for it to be successful. The underlying blockchain network must be stable and there has to be a simple way claims to be paid out. At this time, we want to focus on building a stepping-stone and community that will allow us to transition when the perfect time comes.
In regards to compliance, we are working with a reputable US law firm with over a hundred years of history and ample experience in FinTech. The two lead attorneys have over 20 years experience with SEC compliance and securities litigation and General Counsel experience serving prominent crypto-currency/ FinTech startups (>$70m raised from top VCs, leading a successful acquisition for >$500m).
Q: In case I die, who is the next person my kids would ask for my coins? A lot of complications I see.
If we make a wallet in the future, and you hold a wallet and private keys, we will provide recommendations on how to store your private keys such that one's loved ones do not lose access to your funds in the event of death.
Regarding our initial ROSCA product, we will also list out all the potential edge case scenarios that may occur, and the resolution path for how to deal with them when they do occur. The team is hard at work debating edge cases and designing solutions to resolve. We will share these with the community and fill any gaps that are raised. When new edge cases occur, individual ROSCA groups will be able to resolve through their internal vote, and we can adopt best practices from ROSCAs as the corpus grows.
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