What is Bloom?
Those who were impacted by the Equifax data breach are looking for more ways to secure their online data. Enter, Bloom. In a nutshell, Bloom is bringing a decentralized, globally recognized credit score to the modern age.
Bloom isn’t lending money; it is a fully programmable credit ecosystem that will allow organizations to participate in evaluating user identities and creditworthiness. This is all done securely on the blockchain protocol, powered by Ethereum.
If you want more technical terms, please check out their Bloom’s white paper.
Current problems with credit around the world
United States – 90% of top lenders in US use FICO score which the United States government considers a monopoly.
China – credit score is directly affected by political opinions.
France, Portugal, Spain and the Nordic countries – don’t have credit scores
United Arab Emirates – religious restrictions on lending have prevented the development of a consumer credit reporting system.
United Kingdom – you will have trouble getting a high credit score if you are not registered to vote.
5 Real life issues with current credit that Bloom will address
1) High Risk of ID Theft – Traditional borrowing means we must expose all our personal information when applying for a loan. In todays tech age, hackers find it easy to steal our info. This aspect of credit needs to be updated.
2) Cross-Border Credit Scoring – Traditional credit history aren’t portable across countries. Individuals have to reestablish their credit records from scratch when they relocate
3) Creditworthiness Assessment – Most credit systems rely heavily on historical debt repayment information. New credit users have almost no chance at receiving a loan and if they do, have high payments and interest.
4) Limited Expanding Ability – Borrowers in less financially developed parts of the market are left struggling to access credit as lenders have limited identity and scoring data.
5) Uncompetitive Credit Scoring – Credit data is centralized. In most markets, a single provider scores credit. This results in an uncompetitive
ecosystem for evaluating credit risk.
The Bloom Protocol
There are 3 main components of the Bloom Protocol
1) BloomID – This allows users to establish a global, federated identity. Independent third parties will publicly vouch for their identity information and legal status. This means your personal information will not be publicly required for a lender.
2) BloomIQ – This system is for reporting and tracking current and historical debt obligations that are tied to a user’s bloomID
3) Bloomscore – A dynamic, inclusive indicator of an individual’s likelihood to pay debts that adapts to the maturity of a user’s credit history
This is not another “pump and dump” token. This “utility” token will allow organizations to participate in evaluating user identities and credit worthiness. Additionally, it serves as the voting token to guide the evolution of the bloom protocol. BLT will serve as a voting mechanism for instituting changes to the bloom phases and algorithms.
The Bloom token is Blooms network currency. Identity attesters and risk assessors on the network will set prices and receive payment for their services in BLT. The organizations then pay BLT as an application fee and users who vote on their eligibility will receive a portion of that fee.
Here’s more information on their token sale which is happening now.
This card will help users build their Bloomscore by spending responsibly. For example, the bills you pay on time every month, the car payment, or the mortgage can be paid with the bloom card. By pulling in this alternative data, Bloom is introducing more ways to determine creditworthiness.
Why I like Bloom
Their mission – updating the current, outdated credit market Bloom is going to change the current, outdated state of credit which has been far overdue. The Bloom network will introduce a more advanced credit algorithm which will take into account regular, monthly expenses a borrower pays on time. This is in fact help people who have never had credit start building their trust.
Real world credit issues – There are many coins currently on the market that provide no real value. Granted, Bloom doesn’t have real value just yet, as they are still a startup. The company is trying to tackle real world problems many people face when it comes to credit opportunities. The real value here is that people will have more control over their own credit using Bloom.
Focusing on accomplishing their mission – The Bloom team will not be working to get BLT listed on the exchanges. Their sole focus is to start building the protocol and growing their network. This helps prevent “pump and dump” from occurring and helps build a solid network foundation.
Solid team – Bloom’s team stands out. They are Stanford-educated entrepreneurs with proven expertise in marketing and consumer identity verification. They have Geoffrey Arone, ex chief scientist for experian consumer as an advisor. He wants to help advance the credit industry and help bring more individuals credit. The founders also have an 18 month vesting period in the company. This means they cannot do anything with their tokens up until the 18th month mark. This helps mitigate a fraudulent company and instills confidence in investors such as myself.
Bloom has already amassed a wide variety of partnerships for their network which are listed below. I have provided links for more information about each of the partners.
I’m sure people may have some questions on Bloom. I’m not going to get too much into detail on all their questions and answers so I will post their FAQ. Bloom’s FAQ covers in great details many specifics of the company such as their token usage, protocols, and overall network.
How to Invest in Bloom
Currently, Bloom finished their token sale on January 1st, 2018. Now you must be invited by participants currently on the network. Their coins will not go onto exchange so you won’t be able to buy them off any exchange. They may add them in the future once the Bloom network is built up. You must send your coins such as ether and bitcoin to a digital wallet that you can create from myetherwallet.
Overall, I think Bloom can position themselves as a disruptor in a market that was long overdue for some changes. They probably won’t become a staple and overtake or even join the “big 3” credit monopoly, BUT they will provide an ALTERNATIVE to individuals who prefer to go their route.
For example, peer-to-peer lending companies like Prosper weren’t even imagined and a doubted business model. They focus on individual investments made by regular people to lend that money to borrowers who they deem responsible.
Prosper gave people an alternative to borrowing money, but they are still heavily basing their borrowers trust using the traditional FICO credit score. Now, Prosper enjoys a cool $2 Billion market cap. Overall, I look forward to actively participating in the Bloom network as their phase 1 rolls out in January 1st, 2018.