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Comment by echopom | Hacker News Reader

This is really great content by A16Z.

It shows how complex building a Fintech in US actually is , often due to how many different partners you will actually need to depend on.

In this specific case , you would need to have each partners offer an API that you could call to automate the mortgage workflow.

Obviously , due to the nature of the financial sector it's very likely those partners don't have those APIs and don't want to build them because they are sitting on a very profitable business and have no plan to change that anytime soon.

I can draw a comparison to Airbnb , where most of their jobs wasn't so much to build "disruptive tech" but to lobby local administration to let people rent their appartement to individuals , while hotel industry was lobbying the other way around.

It becomes even more complex when you realize you'll have to do this at global scale to build a unicorn.

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Welcome to my world right now. I work for a company building a mortgage product and the biggest hold up has been dealing with 3rd party apis. Some mandated, some not. Mostly all using outdated tech and obscure mortgage codes. A product that should have taken a few months has ended up taken days mainly because of delays dealing with 3rd party vendors.

Myself and a few others woulc like to use cryptocurrency to enable fractional ownership of property where anyone in the world can buy and sell 'shares' or just own them as an investment. This is happening with art too.

For residential, there’s some adverse incentives at play. If I borrow from someone and give them equity, my incentive to improve (or even maintain) the property is dramatically curtailed.

Conversely, if we try to alleviate that, maybe a lender ends up on the hook for a call for their 10% of my $500K addition to maintain their pro-rata. That ends up subsidizing remodels which tend to pay back less than $1 for $1.

Why does this require cryptocurrency?

Art is very different from physical property, given it tends not to have any intrinsic value, generate income etc.

Fractional ownership of residential property is already possible in the UK, without cryptocurrency:

- Set up a Declaration of Trust which defines the fraction of ownership of each of the Tenants in Common, along with other details such as what to do if one wants to sell. This is typically used by owner-occupiers.

- Purchase via a Public Limited Company, and issue shares in that company. This is typically used by investors.

- There are also fractional property ownership schemes run by housing associations.

There was even a startup attempting to streamline this process, without cryptocurrency, although it has folded already[0]. Adding cryptocurrency is only going to add new risks such as key management, exchange failure, etc. and doesn't provide any clear benefit(s) to those who don't already have a vested interest in the chosen cryptocurrency platform. Unless the idea is to use cryptocurrency to bypass the existing legal system, but that is going to expose you to the legal (not to mention moral) ramifications of it being used for tax evasion, money laundering, theft, etc.

[0] https://news.ycombinator.com/item?id=19319363

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