Understanding Blockchain, Bitcoin and crypto-currency may be complicated, but the technology is a game changer. The number of global online transactions is increasing exponentially, meaning the need for a fast and secure currency has never been greater.
This is where the Blockchain comes into play. Quickly summarized: Blockchain is the model on which Bitcoin, a virtual currency that is hailed as a fool-proof and fraud-proof way of transferring money (without the need for banks), is built.
In Berlin and elsewhere, there is no shortage of financial technology, or FinTech, startups ready to step in and make use of this technology.
Radko Albrecht, founder of the Berlin-based FinTech startup Bitbond, is leading the way with the technology, specializing in international peer-to-peer Bitcoin lending.
But why Bitcoin? The crypto-currency is easier to transfer from lender to borrower because it cuts out the middle man, or third parties, like banks, Albrecht explains. After the borrower receives the currency, he or she can exchange it into their currency of choice (for a small fee).
The opportunity is attractive to lenders, who can invest from anywhere between six weeks to five years, because it lets them diversify their investment portfolio online and take advantage of high interest rates. They range between 10 and 35 per cent, which is “competitive for small business loans,” Albrecht says.
And borrowers who might be denied loans from traditional institutions can lend money if they pass Bitbond‘s unconventional credit check: The startup looks at a user’s online business accounts, like Paypal, Ebay and Amazon, the CEO explains.
Bitbond has roughly 80,000 registered users, roughly 10 per cent are active on the site, Albrecht tells the Heureka. And roughly 60 per cent of the users are borrowers, who can only take out one loan at a time.
On June 20, the Bitcoin expert will take to the stage at the Heureka conference in Berlin and present “Blockchain for Dummies,” a session designed so attendees no longer have to just smile and nod when people talk about Bitcoin and crypto-currency.