Bloom To Offer Decentralized Credit Scoring For Everyone

The Equifax hack—which took place over a three month period between May and July of 2017—made headlines around the world after exposing the personal details of millions of Canadian and US citizens.

It was a massive blow to consumer confidence and opened people’s eyes to the dangers of trusting third parties with your sensitive information. However, the ease at which the hack was accomplished—and the fact that it was inevitable at some stage—was no surprise to those in the industry. The very nature of having a single entity controlling such a large amount of priceless data in one place is a honey pot for any hacker.

Bloom is looking to change this by bringing credit scores to the blockchain and in turn helping to make credit available to those who would not normally have such services within reach.

One of the main drawbacks of current credit scoring is that it is almost solely based on your financial history. If you are in a developing country with poor banking infrastructure, your credit score will be non-existent. Similarly, if a person moves to another country they will have no credit score in that jurisdiction. And as anyone who has experienced this before can confirm, having no credit score is almost as bad as having a poor credit score.

So what exactly is Bloom? Their website makes the following statement…

The Bloom Protocol provides solutions allowing any lender authorized by a borrower to safely and securely issue credit to that borrower.

A key phrase here is ‘authorized by a borrower.’ Under the traditional model, our personal and financial data is passed around between companies on a daily basis without our knowledge or consent. Every time you apply for an auto loan or register for a store credit card for example, your details are passed between multiple entities who copy that data to their version of your credit history. That’s a very scary thought.

The Bloom Protocol removes those potentially dangerous supply lines. It works using three main integrated components—Bloom ID, Bloom IQ and Bloom Score.

Bloom protocol consists of BloomID. BloomIQ and BloomScore.
An overview of the Bloom protocol.

BloomID

Your BloomID is your credit identity on the blockchain. It will allow financial organizations to offer services—within a fully compliant environment—without needing to access private sensitive information from the borrower. Your BloomID is a combination of a number of factors, including independent third parties who publicly vouch for your identity and legal status. This can include friends, family or peers.

BloomIQ

Your BloomIQ is the registry of your credit history. All of your current and historical debt obligations are stored on the blockchain and tied to your BloomID. Organizations looking to run a credit check on an individual will only see information such as your Reliability Score, Peer Score and number of previous loans. No personal identifying information—such as name or address—is immediately available. Only you can release this information, if requested, to a third party.

Another interesting feature will be the ability to import existing credit history to the decentralized BloomIQ system. This will allow existing credit-established users to start using the system quickly without the need to build a ‘new’ credit history within Bloom.

BloomScore

This will essentially be Bloom’s version of your Equifax or FICO credit score. Bloom refers to it as a “metric of consumers’ creditworthiness.” Being on the blockchain, the BloomScore will be much more fluid than the current model, and will allow for more accurate updates as well as cross-border access. It will adapt to users habits and maturing credit history.

BloomToken (BLT)

The BloomToken allows organizations to participate in evaluating user identities and creditworthiness. It also has additional benefits such as voting rights on the blockchain allowing token holders to participate in the development and evolution of the Bloom protocol.

BloomToken Summary

  • Token Symbol: BLT
  • Total Token Supply: 150,000,000 BLT
  • Hard Cap: $50M
  • Minimum Purchase: 0.001 ETH
  • Accepting: Ethereum
  • ERC20 Token: Yes
  • Individual Cap: None
  • Countries Allowed: As determined in the sole discretion of Bloom Ltd.

Risks & Competition

Bloom is looking to disrupt a heavily regulated and monopolized market. Also, cross-border credit scores—while extremely beneficial to customers—will remain a difficult task. However, Bloom is a highly ambitious project with a qualified team, and while it does have some competition from similar projects, the Equifax hack has provided an ideal launch pad for their protocol.

There is a lot of chatter around this project, and despite the high market cap of $50 million, there is potential for Bloom to make significant waves in the credit-scoring industry. It will be very interesting to see how it progresses.

Next Steps?

The Bloom token sale is scheduled for 9 a.m. (PST) November 30, 2017, ending on December 30, 2017. Here are a few things you can do between now and then…

 

 

DISCLAIMER: This is not financial advice or an endorsement for any product or service. As with all ICOs, make sure you are aware of any legal and tax implications within your jurisdiction and undertake your own due diligence before investing. The links above to the Bloom website are connected to the Bloom Community Rewards Program.