Credit-money is created and destroyed today via the lending process by the banks. However, we had credit-money for thousands of years before the central banking emerged. Credit-money was then created decentrally.
These are the key phases of credit-money history:
How did it work in the past? It was all based on the bill of exchange — these are legal documents enforced by the court system. Anyone can issue a bill of exchange, it has only 8 attributes, including the wet signature of the borrower. The borrower has to pay, not to the issuer, but the owner of the bill of exchange. This gives value to every bill of exchange as they are backed by the borrower’s obligation to pay. This allows the use of bills of exchange as a means of payment.
The bill of exchange system is a peer to peer system backed by the court system. Every lender can create new credit-money — the bills become the credit-money, till they are paid back to the holder. One doesn’t need banks to create the credit-money, every person can do this via a bill of exchange.
This system works as well today, even without the blockchain. This system has been the basis of all decentral credit-money systems in the last 5’000 years.
SmartCredit.io thesis is that blockchain enables the implementation of the decentral credit-money again.
SmartCredit.io’s vision is to create a self-reinforcing DeFi lending platform. The first version of our non-custodial crypto lending platform available in the Ethereum main-net: https://app.smartcredit.io.
We wrote lately an analysis in our medium post asking that ”Is the Blockchain-based alternate financial system ready to be used?” Here is the summary
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During presentations about money, we usually hear that money has to be durable, portable, divisible and fungible. We fully agree with this distinction.
In the previous article, we looked at the two dimensions of money — base money and credit money. We also looked at the different kind of monetary systems that existed in the last 5’000 years and possible scenarios for the future.
I was presenting on 28th of November 2018 at the moontec.io conference in Tallinn, Estonia about the monetary systems and about why one will need credit money in the crypto sector.
Here is our pitch from the Swiss Fintech Investor Day in Zurich:
Here is the Youtube video explaining the idea of SmartCredit.io Here is the transcript Hi guys, this is Tarmo speaking. Hi guys, I’m Martin, I’m
In this video, we discuss how everything started with the decentral credit-money, evolved then to our current central credit-money system and how it will go
SmartCredit.io newsletter has a simple mission: “The Bitcoin whitepaper defined the base money for the Internet. SmartCredit.io defines the credit-money for the Internet.” In the
