P2P Lending Reinvented: Blockchain’s Impact

While there are plenty of new and promising technologies emerging in the financial service sector every year, blockchain is undoubtedly the one with the most potential. Distributed ledger technology can make local and global transactions a lot quicker, safer, and cheaper. Those same benefits can be easily applied to the peer-to-peer (P2P) lending market, essentially leveling both investors and borrowers alike.

The P2P Market: Where Does it Stand?

The concept behind P2P lending is as basic as it gets — one party lends money or assets to another party. Whether or not interest is involved is entirely up to the contracting parties, though the overwhelming majority of deals do include interest.

Peer-to-peer lending used to be known as social lending and its history dates back to the 1700s. It reached its peak throughout the 18th and 19th centuries, eventually becoming the most widely used method of lending in Europe.

As new technologies and techniques began emerging, however, the market started to diversify and evolve, but the popularity of P2P lending never went away. The very first digital P2P lending platform was launched back in 2005 and by now, 13 years later, the platform has managed to lend more than GBP2.8 billion to UK consumers.