After Bitcoin, will P2P be reconstructed by blockchain?

     Since P2P took root in China in 2007, whether it was the low point in 2008, the resurgence in 2013, the booming 2014, or the great trials and tribulations in 2015... risk control has always been the biggest stumbling block that has prevented it from making great strides forward.

The "one certificate with multiple pressures" for real estate mortgages, the "pre-loan assessment" for car mortgages, the "fake bills" for bill mortgages, the "core enterprise credit" for supply chain finance, and the "imperfect credit reporting system" for credit lending are all direct causes of P2P's running away, and the culprit is the "lack of a credit reporting system."

Although P2P has been waving the flag and pushing big data credit reporting to the forefront of public opinion, in the actual operation of P2P, it is still in the conceptual stage, while the perfect risk control system has entered the period of "crossing the river by feeling the stones".

"Blockchain technology will reconstruct Internet finance, and Internet finance will enter the 2.0 era." In the industry's view, blockchain technology will directly solve the credit reporting problem, and P2P will usher in the best period of "security risk control."

Is it the dawn or the epiphany?

The so-called blockchain technology is a distributed database that is almost impossible to change. A large number of computer nodes maintain the same blockchain. It was first launched to support the formation and circulation of Bitcoin. It is a new decentralized protocol that can safely store various transaction data. The information cannot be forged or tampered with. It can automatically execute smart contracts without the review of any centralized organization.

In layman's terms, it is like a complete, distributed, and tamper-proof public ledger. Participants in the blockchain can view various operation information without establishing a trust relationship.

"For P2P, blockchain technology will become a technology that will disrupt this industry in the future. The authenticity of the project and payment security have always plagued the P2P platform. In the future, blockchain technology can be used to reconstruct such a system, making lending safer and more convenient." Yang Lingchi, head of the data group of Yingcan Consulting, said.

According to statistics, 917 P2P platforms in the P2P industry went bankrupt in 2015. The main reason was that the platforms set up capital pools, and insider operations led to the inability to repay, thus running away.

The establishment of fund pools, illegal fund raising, fund flows , authenticity of the subject matter, loan process, post-loan management, etc. are often directly operated by the platform. Investors cannot clearly understand the real information, and industry information is extremely opaque. Therefore, the regulatory authorities can only allow P2P platforms to act as information intermediaries, but they cannot constrain the facts.

However, once blockchain technology enters the P2P industry, it can quickly replace the position of credit reporting and become a key role in risk control. For P2P lending, key information of the entire lending process, from the application of the borrowing enterprise or individual - submission of materials - review - target release - investment - flow of funds - repayment after the loan, will be recorded on the blockchain, and the data cannot be tampered with, and the regulatory authorities can check it at a glance.

Not a panacea

For P2P, the existence of blockchain can indeed solve the problems of information opacity and supervision in the P2P industry to a certain extent, and can ensure the security of investment to a certain extent, but there are also many uncertainties that require further observation and improvement.

However, Yang Lingchi believes that there are still many difficulties in the application of blockchain in P2P:

First of all, blockchain technology is still in the experimental stage and has low maturity. It has not yet been truly applied to actual financial operations. The perfection and effectiveness of the technology need to be further confirmed by the market.

Secondly, whether for investors or P2P platforms, it is difficult to understand, the technical concepts are relatively abstract, the promotion costs are high, and it is not easily accepted by the market.

Thirdly, since blockchain is a distributed data record, it does not have economies of scale, and its efficiency and real-time performance are low when processing large-scale operations. P2P is often an industry with large data scale and frequent transactions, so whether blockchain can make a difference is worth pondering.

Finally, user risks, such as the risk of losing keys, the user's block data may be stolen and used. At the same time, the authority of third-party blockchain service providers, including the agreements that are jointly followed, also need to be resolved in a timely manner.

Industry insiders believe that the application of blockchain in P2P will require many years of exploration. In addition, to truly bring into play the role of blockchain, it is necessary to strengthen supervision of the industry, after all, the upload of transaction data and the dimensions of the data are controlled by the P2P platform.

"Currently, the application of blockchain in P2P is mainly in peripheral services, such as electronic signatures, evidence custody, legal services, etc., and has not yet been implemented in specific lending transactions." Yang Lingchi said.