How Does Lending Work with Etherecash

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How Does Lending Work with Etherecash? The
benefits of peer-to-peer lending are only just
starting to be realized in the fintech industry
worldwide, but the issue with most of these
innovations is they are still based on
centralized management. This centralized
management means there is a middleman who takes a
small cut of every loan in compensation for
their services. Etherecash was designed to solve
that problem and bring a solution to the table
that was not only better than conventional
banking, but all fintech as well.
The Lending Process The basic mechanics of the
peer-to-peer lending on Etherecash involves using
cryptocurrency in a new and special way.
Borrowers use their cryptocurrency as collateral
and are able to borrow 7080 of this value in
the form of fiat currency. Lenders then bring
fiat currency to the table and declare the terms
they are willing to lend at. Once an agreement is
reached, the fiat currency is converted to
Etherecash and transmitted to the borrower. The
beauty of this method for the borrower is they
are having their cryptocurrency returned to
them, so they may still participate in the
appreciation that would occur while also being
able to accomplish their business goals.
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As a lender, you can rest more easily knowing the
terms of the loan which were mutually agreed
upon have been recorded in a lawyer backed smart
contract. This is secured by multiple signatures
and smart contracts cannot be manipulated or
falsified. Over the course of the loan, the
interest on the loan is paid and reimbursed to
the lender. The smart contract monitors all
payments and eventually releases the
cryptocurrency which was used as collateral when
all of the interest and loan have been
repaid. One huge benefit of this system is it
can be done in a borderless manner. This means
the interest and principal can be provided in
any currency, since they are being converted to
cryptocurrency, and the payments can be done
from anywhere, to anywhere in the whole
world. Benefits Over Conventional Banking
Industry The way the banking industry currently
works, there are inefficiencies that make it
harder for loans to be executed, as well as more
expensive. Etherecash is working to democratize
lending so anyone who needs a loan can obtain
one, assuming they having some way of providing
the collateral in the form of cryptocurrency. Ma
ny borrowers who try to go through the
traditional loan application process find they
dont check all the regular boxes for lenders,
and as a result, cant receive a loan. If they
are able to receive the loan, the amount of
perceived risk means the bank charges a much
higher rate. By removing this middleman and
using a novel form of putting up collateral, it
becomes more feasible for all sorts of borrowers
to achieve their capital raise goals. Peer-to-pee
r lending comes with numerous benefits, but one
of the top ones is transparency. Normally,
cryptocurrency and crypto-backed applications are
touted for their privacy, but there is always
the option for transparency since the information
is everyones. Etherecash makes it possible for
you to know what the other side of the loan
(either the lender or the borrower) is receiving
or paying, which is never possible in traditional
lending situations. Usually what occurs in
traditional lending is the loan funds come from
bank deposits which are paying the lender a
miniscule amount of interest. The bank takes
these funds and allocates them out to borrowers
based on certain criteria, and collects a spread
on the interest rate differential. The result is
the borrower pays a much higher rate than the
lender receives, and the bank ends up winning
bigger than anyone. Conclusion
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