Fintech and Debt Relief: A Sleeping Giant in Crypto

I was really surprised while looking into this topic and seeing just how stuck the debt relief and fintech industries are. I really feel like there’s a huge opportunity for change now that blockchain and crypto are here. We’ve seen other fields, like supply chain management, healthcare, and gaming, really take advantage of these technologies, but fintech and debt relief seem to be lagging behind. I believe that using blockchain and cryptocurrencies can make the whole debt relief process way more efficient, secure, and clear-cut. Both individuals and businesses could really benefit from faster debt settlements, lower costs, and better outcomes. What do you all think about the potential of crypto to shake things up in debt relief? Any cool projects or initiatives in this area that I should check out?

Blockchain technology - yes it is a giant killer! However, cryptocurrency is a different thing. It's one of the applications of Blockchain technology. There many million other industries that can be hugely benefitted from the Blockchain implementation. Those industries where data integrity is a big thing, Blockchain can be a game changer. However, please also understand that every company that implements Blockchain technology, doesn't need to have a cryptocurrency created. Otherwise the number of dead coins in the crypto market will increase exponentially every year.

fintech can utilize blockchain technology to secure their data and make it unmanageable by just anyone. they can use technology to prevent data manipulation and prevent data centralization that is vulnerable to hacking. in general it can save operational costs, and increase the efficiency of the services they provide. but when it comes to cryptocurrency it is a different matter. fintech is usually regulated by the government, meaning that their operations must comply with the rules in force in that country. and because it is regulated, it means that they cannot issue their own crypto tokens or accept payments via cryptocurrency, until the government says that they can accept payments via crypto.

things starting to come up and currently building in the crypto space, as of now people are still focused on RWA and stablecoins. I'm sure the sectors that you mentioned will eventually get covered, the fact that there's incentive to innovate through funding by VC means there will be people finding problem to solve. but surely things will take time. maybe in the future when crypto become a lot more mainstream when strategic reserve is approved, there'll be surge of people trying to solve problem with blockchain including the sector you mentioned.

since blockchain tech is very transparent, there will be no manipulation and unfairness when it comes to debt settlements there can also be lower fees if you pay in crypto than in banks or other financial institutions of course it also allows for the unbanked to be able to take a loan and pay the debt without having to go to an intermediary maybe using tokens as collateral damage there’s transparency and efficiency and you don’t even have to store these physically

The main "debt relief" that seems likely to experience a massive boost from blockchains seems to me to be relief from the incurring of, and thereby also relief from the necessity to gamble on, unsecured debt. It seems to me for example that rather than trying to bundle debts into "tranches" of anticipated risk, it should more and more become practical/convenient/easy to paste securedness onto debts, possibly thereby somewhat absorbing or amalgamating the insurance industry into the loaning/financing industry. Each debt could have collateral pasted onto it by an underwriter as it were, by loaning collateral, possibly in a number of layers. It ought to be feasible to assemble a panoply of crypto-assets that collectively "secure" debt, leaving less and less unsecured debt over time until possibly unsecured debt becomes a purely personal thing within families or other small groups (credit unions?), one's "family office" or "local credit union" or simply the current "billing with a padding of collection agencies between the bill and its ultimate writing-off" approach often used by utility providing companies with lower and lower chances of ultimately ending up going to court rather than being written off. Social insurance in a way even. The Galactic Milieu is an empirical experiment toward such ends, a live implementation of a simulated multi-society multi-civilisation such ecosystem. In the Milieu for example many assets are set up with calculated relative values, and an accompanying means of adjusting those calculations. In principle any entity, whether individual or group, can provide a currency of its own with a calculable value relative to other such currencies simply by providing the Milieu with a "treasury" of "reserve assets" from which the value per unit of their currency can be computed simply by dividing the total value of their "treasury" by the number of units minted of their currency. Such currencies are thus not merely IOUs but secured IOUs. Ultimately if such a currency were to be discontinued/dissolved its treasury ought in principle to be able to be distributed proportionately to all the holders of the currency. In that sense, the currency (IOUs) would be a secured currency. Thus in principle any loaning institution could simply launch its own such secured currency to loan to its target demographic of borrowers. One thing the Milieu already learned by means of its empirical experiment is that limiting the repaying of such loans to the currency loaned, and sometimes even merely denominating them in one particular currency other than the cash-crop of the borrower (which amounts to the borrower's own currency in effect) can be a trap for the borrowers. Examples include the history of the startup loans issued to "Intergalactic Mining Corps". Originally each such startup borrowed 1000 GMC scrip from General Mining Corp and 1000 GRF scrip from General Retirement Corp as their initial startup cost. Anyone who actually bothered to manage their Corp's manufacturing and shipping of its "cash crop", DEUterium, easily and rapidly "paid off" those startup loans. Most users though who registered an account launching such a startup basically never logged in again; a few logged in one or very very few more times before vanishing forever. Thus a planet-Earth year later most of the startup loans had been orphaned, the mining operations they had financed sitting idle thus unable to make any payments toward their debts. Thus were born the "Galactic Reposession Corps", a separate Repo Corp per abandoned Intergalactic Mining startup. By then of course the amount of untended debt was vast, so debt relief is a big deal to the whole Milieu. Along came General Financial Corp, which borrowed a lot of MartianBotCoin from the Martians and used it to pay-off GMC and GRF debtors' loans, taking their debtors away by offering the debtors lower interest-rates. The original interest rates had been one percent per planet-earth day (about one percent per twelve game-days), compounded hourly (about half a game-day-ly). General Financial Corp charged half that, with the Martians charging them a quarter of that. But the original loan from the Martians was denominated in MartianBotCoin (MBC) whereas the loans to the mining Corps were denominated in DeVCoins. Thanks to the Latest Rates include-file, powered by the ability to compute relative values of "treasury-based assets", all the Milieu's assets could be translated into a value denominated in DeVCoins, and by dividing them all by the value shown there for MBC also into MBC. The problem though became that MBC rose in value faster than DVC did, so much so that it became impractical for GFC's debt to the Martians to remain denominated in MBC; it became necessary to re-denominate it. Through the history of that "tranch" or "demographic" of loans it eventually became clear that even denominating all the debts in DeVCoins might not be such a great idea given that the cash crop of all the Corps loaned to is actually DEUterium, not DeVCoins. Think of it as akin to DEUterium being mining-pool-payout-shares versus DeVCoin not even being one of the coins that particular demographic of miners is mining; hopefully you can see that denominating their debts in the coin they actually mine could be helpful, not only to them but also to anyone with an interest in having them succeed in paying their debts. Notice also that DEUterium is basically a fiat-simulation, in that it loses value designed to closely match the rate that fiat loses value. It seems feasible that the built-in relatively-steady depreciation "enjoyed" by fiat might help make fiat more usable for denomination of debts as well of course as probably being at least partly fueled by the constant need for more of it to pay debts than was initially borrowed to become debt. But I suspect putting more thought and even empirical experimentation into the idea that the the cash crop itself, or getting as close to that as possible, might be the ideal thing in which to denominate any loans undertaken for the purpose of producing some kind of product or result that is sufficiently well-defined as to be a kind of "commodity". I know commodity-markets exist and are quite a bit "thing" so clearly others have thought some of this through in the past. A big contributor supposedly to the financial crisis that triggered the launch of bitcoin was "collateralised loans". That did not mean loans had collateral securing them but, rather, that an attempt was made, at scale, to treat debts as collateral. A possible solution to the problem of debts being used as collateral could be to set things up in such a way that all debts ultimately fall through to "debtors of last resort", which might be insurance institutions or venture capitalists or suchlike, anyone who deliberately takes on such risk who also has the wherewithal to sustain the losses the risks entail. (Gamblers, but highly skilled, highly capable ones?) I saw an episode of CSI once upon a time in which the state of Nevada was stuck with the possibility of having to redeem at face value the gambling chips of a defunct casino. But the problem with having government debt be "we the people"'s debt is other people are being put into debt; it somehow seems more reasonable that each debt be better "secured" than by assuming "the people" will eventually, if only "in generations to come", pay the debt... -MarkM-