I wrote up a introductory post to P2P lending when I first joined medium, and thought it would be a good intro to start out on Steemit in the same way!
Through my blog I talk to many people new to P2P lending. I think for many people it’s one of those new areas of finance, like bitcoin, that you hear in the background but never have the time to explore. So, I’ve decided to write a short introduction to how it all began.
What is Peer to Peer Lending?
To start with, what exactly is peer to peer lending? Is it just a fancy name for a type of ponzi scheme?
Essentially, it involves lending directly from people to borrowers: either consumers or businesses. The idea is that by cutting out the middleman’s margins gives a better return to investors and a lower interest rate for borrowers.
The Early Days
Most would say that P2P lending as we know it began with Zopa in the UK at the start of 2005. However it could be argued that the origins lie in P2P file sharing services like Napster or Limewire at the start of the noughties. With P2P music sharing there was a movement to cut out the middleman which led to technical innovation and change in the entire industy, to leave us with the likes of Spotify.
Zopa comes from the words ‘Zone of Principle Agreement’. In the United States, Prosper followed a year later in 2006.
Today
Today Peer to Peer Lending is multi-billion pound industry in the UK alone. It can probably be classified into four loose categories:
- Equity Crowdfunding
- P2P Business Lending (P2B)
- Invoice Trading
- P2P Consumer Lending
The lines continue to blur between traditional finance and peer to peer lending. Does it stop being P2P if institutions monopolise the debt purchases?
A report by the European Credit Research Institute (ECRI) in 2016 argued that:
P2P lending is fundamentally complementary to, and not competitive with conventional banking. This argument is based on our view that the fundamental core of most bank business models is the provision of liquidity services.
I think ponzi scheme is bad , and it has been banned by many countries already . ^_^ Any what makes you enjoy then go for it, it's your decision. I wish you good luck . Followed. Best regard, @robin-ho
It's not a Ponzi scheme, many of these are regulated by financial authorities and have full government support (and investment, in the case of the UK)
ok , as long as its legal and no one will end up losing there money, then its good. ^_^
Welcome to Steemit . I upvoted for you and followed you please do the same
Thanks!
Hi, P2plending, I'm just here to leave a nice Hello ^^. Unfortunately i don't have much voting power, but i will be back and vote my followers. Need to grow a little ^^. Have a great time @rightuppercorner
Thanks!
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://medium.com/@p2p_blog/a-short-history-of-peer-to-peer-lending-f1f3f06f2c26
Yep, I also wrote that on medium a while back!
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