April 10th, 2020- With the COVID-19 epidemic causing the global financial markets to show bearish movements; Unseen since 2008, both the global financial markets and systems are once again coming into question by the masses.
More than 22% of adults(Approx. 1.7 billion) globally are still unbanked. The global financial markets have repeatedly gone into turmoil every 10~20 or so years, even with modern technology advancements improving so fast that most people struggle to keep up. Why is it that we can make what a few years back considered science fiction into reality but, the systems put in place to keep capitalism afloat seem to fail the majority of the global population? Well, to be honest, none of us really have a clue but we continue to blame the regulators and corporations that make up the 1%.
During the 2008 financial crisis, Satoshi Nakamoto(Anonymous alias) created the first blockchain and cryptocurrency in hopes of creating a better currency and financial system that could be governed by the 99% in a decentralized manner. In 2009, Satoshi disappeared from the world and left the world with one gift. The idea, that a new financial system could be put into place, that may not be able to fix everything, but would create a transparent financial ecosystem run by the people and not by corporations, governments, or banks. 11 years later, an entire industry gathered behind this vision and started what was possibly as big a movement as when the internet first came about. Although, cryptocurrency markets have arguably been riddled with ponzi schemes and securities fraud; Not to mention that unregulated developing industries have many other flaws and the age old argument of intrinsic value comes about, it was that very idea that led to 2 companies that would try to bank the unbanked and provide a new financial system for the people.
Gluwa is a blockchain technology company located in San Francisco who is trying to break the boundaries of time, geography and economic disparity to reshape the financial services landscape(Source:Gluwa.com).
Aella Credit is a Nigerian fintech company, founded in 2015, based out of Nigeria and its primary business model is a micro-lending platform which focuses on poor and low-income households, entrepreneurs, and nascent businesses.
Both companies are collectively backed by several notable investors from the globally, including Y Combinator, 500 Startups, Steve Chen (co-founder of YouTube), Brian Armstrong (co-founder and CEO of Coinbase), Bill Paladino(former head of Naspers eCommerce), Michael Siebel (CEO of Y Combinator), VY Capital, Zeno Ventures, and more.
They have jointly built and designed Creditcoin, a credit investment blockchain. The blockchain enables anyone to build credit by performing and recording credit transactions on the tamper-proof immutable network.
“We build products to help you live better and do better,” says Akin, co-founder and CEO of Aella Credit. “We hope to empower people with tools to build the financial independence they rightfully deserve,” added Tae, founder and CEO of Gluwa.”
After designing Creditcoin, they first built Creditcoin with an ERC-20 standard smart contract of Ethereum to make a proof-of-concept of Creditcoin. Something had happened by the time they finished building the smart contract.
“At that time, Cryptokitty on Ethereum was becoming popular, and transactions began to accumulate without being processed, which caused the cost of using Ethereum to increase considerably, making it economically impossible for the unbanked to use the smart contract. Our partner, Aella Credit, gets over 1,000 loan requests per hour. We concluded that we could not operate Creditcoin as an Ethereum smart contact.
We finally decided to develop a proprietary blockchain.
We decided to develop a blockchain with a single purpose. Creditcoin is only intended for recording credit transactions. Blockchains with a single purpose will not interfere with each other’s traffic since they are in different markets. User behaviors will determine the cost and the traffic of each blockchain.
During the design process, we were confronted with endless questions (and answers).
At first, we started by defining what a loan is. A loan is essentially a conditional transaction. There are usually dozens of conditions you can set for a loan, and that means there are thousands of possible types of loans. As Creditcoin is not a smart contract platform, it should not support every kind of loan. Then, what is the most basic loan? It is borrowing money and paying it back with more money. In short, it is a contract saying, “I will repay $110 if you lend me $100.” You will pay interest even if you pay back earlier then the expiry date. More specifically, it is a non-collateralized bullet loan with a prepayment penalty” – Gluwa CEO and founder – Taelim Oh
With this concept and idea, a few years into their journey, Aella and Gluwa currently offer their services through the Creditcoin blockchain to millions of people globally.
Today, Creditcoin(Ticker:CTC) lists onto OKEX, a top-tier global cryptocurrency exchange with more than $5 billion(USD) in daily trading volume.