Bloom is a standardized, programmable ecosystem to facilitate on-demand, secure, and global access to credit services. Bloom presents a novel approach to credit risk assessment allowing both traditional fiat lenders and digital asset lenders to issue compliant loans on the blockchain while increasing competition to lower fees and improve borrower experience at every layer of the credit issuance process.
There are many problems with current system that the protocol tries to solve.
Cross-Border Credit Scoring
The credit scoring is not portable to another country if the borrower decides to move.
Backward-Looking Creditworthiness Assessment
With a blockchain based system, past cannot be deleted or altered.
Lenders Have Limited Ability to Expand and Offer Loans Globally
Blockchain is global, so lending is global too.
High Risk of Identity Theft
Because data is on the blockchain, signed with the borrower’s private key, there is no need to have ID data, so the risk lowers.
Uncompetitive Credit Scoring Ecosystem
The credit scoring is on the blockchain, so it is easy to maintained and it is easily accessible.
The Bloom protocol facilitates the broadening and efficient operation of the credit market by allowing both fiat and digital asset lenders to extend credit to individuals and institutions operating in marketswith underdeveloped or immature credit infrastructure, national identities or banking systems, without taking on additional risk.
The foundation of a decentralized credit system is a securely established and verified identity. In order to prevent against common network attacks (such as Sybil attacks), each participant’s identity must be adequately established with a high cost of attempting to create new, false identities that appear authentic.
By publishing all historical identity attestations on the blockchain, organizations can help take part in building a reusable identity that builds up trust over time rather than having to be re-evaluated
for every transaction with a new lender. This can not only save money across the network of lenders, but it can also help significantly reduce on-boarding time by reducing duplicate work by anti-fraud and compliance teams across lending organizations.
In the Bloom protocol, “peer-to-peer staking” is a mechanism for representing real-world relationships between individuals with the goal of establishing both an indicator of creditworthiness and authenticity of identity.
BloomIQ is a system for reporting and tracking current and historical debt obligations that are tied to a user’s BloomID. BloomIQ is designed to bring the wealth of preexisting and comprehensive credit history to the blockchain while maintaining privacy for the user by introducing a user approval-based system of information dissemination, offering a marked improvement over current systems. Bloom’s privacy model puts loan recipients at the center of all transactions involving their private information and credit history.
The Bloom Token (BLT) is both the currency and scoring enhancement mechanism of the Bloom network. The Bloom token allows organizations to participate in evaluating user identities and creditworthiness. It also serves as the proposal and voting token to guide the evolution of the Bloom credit scoring system.
Check out more on the ICO’s website: https://hellobloom.io/