I can also say that credit protocols are not my strong point, I almost do not understand anything, although I have seen publications like this from Steemit users who publish explanations and their loans and obligations to each other. But, I do not understand the matter and I saw a post in "promoted" that tried to explain something of jury, legal or not, but I still have doubts ...
Lol yeap it's still a question mark for me. But I guess it works for small and simple loans..
It is all about the reputation. Assured repayment has no place in a healthy loan market, where part of the loan's profits covers non-payment by bad risks. The entire point of loaning money is to give opportunity to someone who currently has none. The only difference between a blockchain based system and the current system we currently have is that a single ordinary person can potentially have more than one account (new reputation accounts in our current system are reserved for witness protection/victims and the elite).