Getline Whitepaper Article Series: Introduction, Aim, & Our Idea

We’re pleased to introduce the first of a series of articles based on our whitepaper. The purpose of this article series is to run through the whitepaper in layman’s terms, and make it as simple as possible to read and understand the details of what the Getline Network is, how we’ll function, how we’re structured, and how we plan to move ahead. These articles will be shortened & simplified versions of the whitepaper content. See the whitepaper for the full content.

Just as a short intro, Getline is disrupting a $1 trillion market through blockchain technology.

The Getline Network is a peer-to-peer lending market on the Ethereum blockchain. The platform will allow for instant and direct lending in cryptocurrencies. Getline will initiate a unique architecture for a credit risk prediction market to make lending safer for lenders and more accessible for borrowers. We aim to revolutionize the peer-to-peer lending market and fully decentralize it, making it easily accessible, safe, and compliant to serve as an infrastructure for a new kind of global financial system. For those of you who don’t know, peer-to-peer (or P2P) refers to the ability of two individuals or entities, to exchange value with each other directly, without the need of a middleman.

In this first article of the series, we’ll cover sections 1–3, which are:
*1. Introduction
*2. Aim
*3. The Idea
*3.1 History of Getline
*3.2 The problem we aim to solve
*3.3 Reverse ICO

Let’s get started…

1. Introduction:

The 2008 Global Financial Crisis, caused banks and financial institutions to be more strict on who they lent money to. This resulted in many people being turned away, even some with good credit scores (an individual’s ‘score’ of trustworthiness for receiving and handling a loan). This led to the creation of peer-to-peer lending platforms, where individuals could easily borrow from each other, without the need of a bank.

“In 2011, 50 percent of all new mortgage money was loaned by the three biggest banks in the United States: JPMorgan Chase, Bank of America and Wells Fargo. But by September 2016, the share of loans by these three big banks dropped to 21 percent.” ~The Washington Post

Traditionally, P2P lending platforms can give loans to borrowers with lower credit scores than banks would usually allow. This means there’s a greater risk of defaulting (failing to pay off) on a loan. The greater risk is balanced out with higher interest rates, which also means potentially healthy returns for individual investors, like those at the Lending Club have seen.

The P2P lending market was valued at less than $100M in 2006, but grew to a valuation of over $26B in 2015. Morgan Stanley estimated that the loans from marketplace lending will grow to $150-$490B globally by 2020. This includes institutional lenders trying to be more agile.

“In the next 10 years the value of the sector can easily surpass the $1 trillion mark. P2P lenders have leveraged low operating costs, minimal regulations, Big Data and technology streamlined for a mobile generation to mediate terms between everyday borrowers who want quick access to cash and the lender-next-door starved for yield.” ~Morgan Stanley Research

Although P2P lending platforms made a disruption in the market, they have all up to this point been centralized, often unregulated businesses, essentially third parties in their own right; As such, many became victims of human error and outright theft, lying, and manipulation.

Traditional P2P lending platforms, as intermediaries, do practically everything: scoring borrowers’ credit worthiness, collecting and redistributing loans & repayments, etc. They also have nothing of value of their own at risk, accept their reputation, which would stop them from malpractice or charging hefty fees.

Also, these platforms are based on legacy financial systems, preventing them from scaling worldwide, and from serving the world’s unbanked (2.5 billion adults estimated), etc.

Hence the first player in the game to offer a truly decentralized, transparent, trusted solution to today’s P2P platforms’ problems might become the leader in a multi-billion dollar emerging market.

2. Aim:

Getline aims to use blockchain technology to disrupt the P2P lending market, by being safer, decentralized, globally scalable, & truly peer-to-peer. This can be achieved with the help of: a. Cryptocurrencies, which can easily move across borders, b. Smart Contracts, which are automated, self-enforceable agreements, & c. Blockchain networks, which can host robust, transparent, & competitive prediction markets, which have the potential to assign credit scores much more accurately than today’s credit scoring agencies.

We are creating the Getline Network, a decentralized p2p lending network on the Ethereum blockchain, which will utilize all three of the above items & their benefits. This will make loans available for those with lower credit scores, & bring healthy returns to investors (we expect well above average).

The Getline Network will be made up of:

• A smart contract layer, where the entire lending contract / loan process will be safely performed & settled.

• A credit risk scoring network, made up of entities called Attestors of Risk Analysis (ARAs), providing evaluation of borrowers’ creditworthiness & effectively forming a prediction market. ARAs will also serve as compliance agents, ensuring the legal viability of each lending contract according to their jurisdiction.

• A metascoring system, which will provide information on each individual ARA’s past accuracy, which will foster competition & allow lenders to evaluate each credit score’s trustworthiness, based on the ARA’s past performance, who issued the credit score.

• A user-friendly Getline Browser, which will allow for future borrowers to easily apply for a credit score & later for a loan, and investors to fund those loans.

• A GET token contract and Network Trust Fees, which will help with loan collateral and to help ensure that all parties participate honestly.

All of these elements will help create a network where lenders can best allocate their funds based on accurate prediction data, gain healthy returns, and also let borrowers tap into a global financial market.

We want Getline to be a killer blockchain app, tapping into two globally important trends — the rise of P2P lending & the dawn of the widespread adoption of cryptocurrencies.

3. The Idea:

3.1 History of Getline

Our development team previously had worked on Getline.in, a P2P Bitcoin lending platform. It functioned similarly to a fiat currency P2P lending platform. It was essentially centralized in that it was the only identity verifier & credit risk scoring entity, and it also served as a trusted third party, intermediating all BTC transfers between lenders & borrowers. Two years showed us that it was increasingly hard to scale, as more & more global borrowers joined. It became difficult for us to verify & score hundreds of new customers, often from other sides of the globe — some of whom were fraudsters, while others’ creditworthiness was nearly impossible to accurately asses.

Most of today’s P2P lending platforms will only accept borrowers from their country for this very reason. Despite our global aspirations, our former model simply could not adequately serve those outside of Europe.

But what if we could gather onto one platform a network of institutions which assess creditworthiness in their own countries? Such a network could transmit creditworthiness, just as a blockchain today transfers value. That could be a truly global network. That’s how we got the idea for the Getline Network.

By connecting many P2P lending marketplaces and localized credit scoring entities, we can create a global, borderless, open, & decentralized P2P lending network built on blockchain, which could shake the foundations of legacy financial institutions.

Implementing became feasible only recently, as Ethereum gained traction with the blockchain community, & huge amounts of capital flew into the blockchain space with growing interest in the technology.

3.2 The problem we aim to solve:

P2P lending platforms face many challenges to offer services that are both safe for & bring good profits to lenders, and which are friendly & accessible to borrowers. Problems such as raising capital & inducing investors to lend, and assessing creditworthiness of borrowers well enough to keep investors’ profits satisfactory & to sustain the platform.

We envision all organizations and individuals to be able to get a credit assessment from the network, & a loan from a pool of potential lenders from all over the world. Blockchains already allow for global value transfers, but transferring creditworthiness in a decentralized, trustful way has only recently been made possible, without which, there could be no decentralized lending platform.

The Getline Network aims to use Ethereum blockchain technology to transmit creditworthiness information of individuals, like Bitcoin’s blockchain transfers value between participants. We want to create an easy to use P2P cryptocurrency lending platform, that is global & decentralized.

3.3 Reverse ICO:

Getline is extremely small in size compared to legacy financial institutions & fiat-based P2P lending marketplaces. We have to develop quickly in order to compete. In holding an ICO to decentralize our platform via blockchain, we are providing proof of concept for a reverse ICO, where an established company dissolves its operations & reestablishes itself on blockchain, in a decentralized way.

Our whitepaper presents our plan to reinvent Getline. Even with our customers enjoying lower fees & a better user experience than with most legacy financial institutions, we’re still more costly as a for-profit, centralized, third party, than we would be as a decentralized network. We want to be cheaper & more effective for everyone by tokenizing and decentralizing our platform.

We hope you enjoyed this article, keep an eye out for the next article in our series,
The Getline Network team.

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