Whereas if the loan and payment data were on a public blockchain (with personal details hashed), records wouldn't get lost and courts could easily verify them.
You could argue that we should reform our centralized systems, but that's hard to actually do, which is sorta the point of removing the need to trust them in the first place.
But here is a different use-case -- keep records well. Traditional systems are actually pretty bad because of the incentives. My bank statements for example are often very confusing, and online data only goes back 18 months, because the bank has little incentive to do better.
And that is in a relatively benign market. Title deeds, and the kind of loan documentation you are talking about create positive incentives for abuse.
For stronger privacy we'd need ring signatures or zksnarks, so a person can't be identified by the flow of payments, but those technologies exist on various blockchains already.
Imagine if you thought that it would be a great idea to create decentralized payment system on the internet where people can accept and make payments in a peer to peer manner.
Except, this is 2001. There is no such thing as a blockchain. You face the problem of double spend, and soon enough, you come to the realization that you could create a peer to peer accept/send online payment system much better if it is centralized.
Thus, Paypal is born.
But does that mean a blockchain based decentralized payment system was completely useless? Not really, it is clearly demonstrated by the popularity of bitcoin in a world with capital controls, WikiLeaks payment sanctions etc.
The real reason behind this effect is that the tech world is excited about decentralization, but it doesn't fully understand that there are a lot of missing components required to create say "a censorship-resistant online forum" or "decentralized blah blah service".
On the top of that, nobody except for the people who are being actively censored or prevented from doing things by the centralized institutions truly need the decentralization.
Most SV technologists would be really excited by the idea of a decentralized, censorship proof forum. Except, you will only attract the alt-right (as of now) to it. Why? Because the non-alt-right is perfectly fine with the censorship, as it favors them currently.
Everyone I know that is remotely interested in Bitcoin is interested because it may increase in value, it's not popular at all as a payment mechanism outside of illegal circles.
> Most SV technologists would be really excited by the idea of a decentralized, censorship proof forum
Is this really exciting? It sounds like a formula for a cesspool. It seems to me that the challenge in getting anything interesting to happen there is not in the technology, but in the design of the service. There are already tons of places where you can discuss anything that's not actually illegal, including being alt-right. It's just that they're seedy, so nobody normal goes there.
It's already trivial to build those clones without blockchain if users give up a small amount of trust, and that amount of trust is basically irrelevant to the overhelming majority of users. And the advantages of non-blockchain development, in return, are huge.
1. An ability to trustlessly hold and release digital collateral on an entirely peer-to-peer basis. This entirely removes the necessity for a whole class of middlemen that seek rent for existing lending agreements. 2. An ability to trade one's ownership in a loan as a cryptographic token -- again, something that necessitates various paying agents / clearing houses / intermediaries in the traditional capital markets ecosystem.
Re: decentralization -- that's a fair point. Right now, Dharma is functionally a centralized code base controlled by a centralized set of contributors. In the future, however, we hope to transition to a decentralized governance model so that the protocol can serve as a piece of common, shared public infrastructure -- unfortunately, we don't have robust enough decentralized governance models quite yet in the crypto community.
For point ,: you're correct in that we (as in the crypto community in general) have yet to come up with good on-chain governance mechanisms, so its likely that robust decentralized governance systems are at least a few years away.
Underwriting is a heavily regulated process in most countries with licensing requirements. You could claim that you do not underwrite yourself,so don't fall under regulatory purview. Interestingly your model will fall under the P2P regulations of India and China - where there are specific models where the marketplace does not underwrite, but risk is assumed by lender. Or - you have to make sure that the underwriters are regulated entities.
P.S. I run a lending startup in India. We primarily look at the Blockchain as a means to solve the credit history problem in India.
Now just waiting for the smart contract that bundles a bunch of your tokens and sells structured tranche tokens :)
How fast can you get lending users to put $100 million to a billion into your non-blockchain platform? Maybe 5 years, with VC money for marketing?
Now compare that with how fast you can do it with a blockchain crypto platform. And it's still very early days = "small" amounts of money being put into crypto compared to what it's going to be 5 years from now.
Do you mean a stock sale? Once it's passed all SEC certifications and so on for going public and done your IPO, a company can do that in as simply as filing a form with the SEC and directing the sale of the stocks.