BTCJam, a startup in San Francisco, is using Bitcoin to provide peer-to-peer lending to customers around the world. The company says that by avoiding the restrictions on fiat currency, the company can allow anyone in the world to get loans through their platform.

However, traditional wire transfer is expensive and not easy to operate. Bitcoin allows BTCJam-based borrowers to receive funds almost instantly, no matter where they live or whether they have a bank account.From bankers to bitcoin companies

Pitta from Brazil worked in the financial industry before creating BTCJam. “I work at Citi. I understand the working mechanism inside the bank. I think I can do better: peer-to-peer lending websites.”

However, Pitta encountered the first obstacle when he found that he was punished for launching an unlicensed lending service in Brazil.

This may sound ridiculous for some people. The potential obstacle is to make Pitta determined to carry out the company’s business in digital currency, rather than trying to become a bank authorized by the family, which is costly.

Pitta said BTCJam has provided more than $5,000,000 in loans to people in more than 100 countries around the world.

Investor return

In peer-to-peer lending, the investor team does not need to provide loans to individuals through traditional financial entities such as banks.

In the past 10 years, this concept has developed into an industry. Last year, in the United States alone, the largest two legal currency P2P platforms, Lending Club and Proper loans, exceeded $3 billion. To find out more about the finest P2P cryptocurrency exchanges with low costs and high security, visit this website:

BTCJam believes that P2P lending has a market of at least $100 billion worldwide, and the concept is valuable for Bitcoin holders who are beginning to lend their funds.

Pitta told Coindesk that the BTCJam marketing department usually has 20 investors with a loan, with an average annual return of 19.19.

This sounds high, but, like any loan, the profit is based on a loan that can be recycled, Pitta said, and explains:

“If the credit is not good, then the loan rate is significantly higher.”

Aside from this, bitcoin borrowing at this rate is a good thing for many people, Pitta pointed out. In Brazil, these lenders charge 10% of the monthly fee.

Moreover, he said that bitcoin scattered around the world can better promote the use of digital currency through different exchanges and wallets, even if the borrower is vague about this fact.

Global credit score

BTCJam has also solved another problem, which is the restriction of geographical areas by many other P2P lending websites. By establishing his own credit score system using the “machine learning” artificial intelligence approach, the company can rate debit credits around the world.

“People don’t have credit scores, which is very common.” Pitta said, “This makes it difficult for us to lend out loans. Our technology allows us to do a credit score evaluation by collecting a lot of data from users.”

When a user registers on the BTCJam website, the credit score can be evaluated through a number of confirmation questions. Confirmation verification is needed, but there are other options to create a reputation file.

Users can link their social media accounts, proof of income, verify phone numbers, and even upload personal information to prove his credit without historical credit, as the system is still not established in many countries.

Bitcoin and French currency exchange

Many companies use Bitcoin to provide remittances or other financial services often encounter the so-called “final road” problem. The problem is that although Bitcoin can quickly transfer money around the world, it is almost impossible to transfer money every day for daily expenses.

Although BTCJam has his own bitcoin wallet, the company understands that lenders need to convert digital currency to French currency locally. Therefore, the company thought of a way.

Pitta said, “We are now integrating exchanges around the world. This allows customers to convert them into French currency once they receive the loan.”

For example, in the United States, users can link their BTCJam wallet to Coinbase, which makes it easy to transfer funds to a bank account.

Moreover, BTCJam has been integrated in Brazil and exchanges, and in Mexico and China and elsewhere, it has also reached partnerships with plans and exchanges. Pitta said.

Coin desk price

Although the advantage of Bitcoin is that it is easy to transfer money, BTCJam still has to calculate the value of the loan in local currency, which makes it easier for the borrower to understand the amount of money.

“We allow people to use the exchange rate of the local currency when borrowing,” Pitta explained. But its solvable about who accepts bitcoin?

At the moment when the loan was issued, BTCJam used CoinDesk’s Bitcoin Price Index API, which can obtain price data from many exchanges and calculate the local currency of Bitcoin. Therefore, if the customer is in India, the system will use the exchange rate of rupees and bitcoin and calculate the number of rupees.

“When we borrowed, we kept an eye on the exchange rate between French and Bitcoin. CoinDesk BPI is very good, because it is very timely and trustworthy compared to the API of other websites,” Pitta said.

Regulatory aspect

BTCJam was founded in 2013 at the 500 Entrepreneurship Acceleration Center in California, and earlier this year the company received a $1,200,000 investment led by Ribbit Capital.

In fact, they borrowed millions of dollars through thousands of transactions, which clearly shows that global P2P lending is a viable business. At the same time, BTCJam is also fulfilling the role of a financial company, and supervision is also in the company’s attention.

“We have spent a lot of time thinking about regulation. We have a legal company that is working on this and we want to follow regulation.”

Even so, Pitta is not too concerned about regulation and stifles innovations in the digital currency economy. From the recent news of the German Central Bank, this shows that BTCJam’s startups have already had an impact on the banking industry.

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