Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Meet Bloom the Ethereum Token powered by Credit Scores

Bloom (BLT) is a cryptocurrency driven by an important number most of take for granted – credit scores. The big idea behind the Bloom platform is to give everybody a permanent, tamper-resistant, credit score and identity that can be used anywhere in the world.

The Bloom system is designed to fix several huge flaws in the credit-scoring system. The greatest of these is that most credit scores can only be used in one country. American credit reports cannot be used in Canada or the United Kingdom that creates huge problems for individuals, banks, companies, and lenders in a world where people move from nation to nation at the drop of a hat.

Credit Scoring is Broken Can Bloom Fix It?

People with plenty of money and good jobs often have a hard time borrowing money or getting a credit card when they move to a new country. Some loans, including American auto-loans cannot be taken to Canada.

This occurs because your credit history is only good in one country, if you move to Australia you are out of luck. Bloom intends to fix that by creating a new kind of credit score that can be taken anywhere in the world. Every Bloom user will get a BloomID they can take anywhere in the world.

Another huge flaw is that current credit reports only cover a person’s history of repaying loans or banking. That means a lender has no way of evaluating a person with no history of borrowing. It hurts the unbanked because they have no credit history, and makes it hard to offer loans in developing nations.

Many lenders would love to expand their business to new areas and offer services to the unbanked are locked out of those markets by lack of credit scores. They have no way of analyzing the risk from loaning to people outside the credit system.

Another group left unserved is those working in the gig economy or freelancing. A freelancer or gig worker; such as an Airbnb, host might make plenty of money but have a hard time getting credit because of a lack of job history. Bloom hopes to correct that flaw by partnering with the employment history tracking solution SpringRole.

BloomIQ a system of reporting and tracking debt obligations will people establish credit ratings for their BloomIDs. BloomScore is a new kind of credit score that can be used anywhere in the world. A long term project is a Bloom credit card will enable users to establish a credit history based on the BloomScore.

All the Bloom functions will be supported by the Peer-to-Peer staking modules associated with the Bloom (BLT) ERC20 token. These modules will form a decentralized credit-scoring ecosystem powered by Ethereum and InterPlanetary File System (IFPS).

The IFPS is protocol and network that makes the storage of hypermedia in a distributed file system on the blockchain possible. Bloom’s IFPS operates through the Ethereum blockchain, which makes it compatible with other Ethereum solutions like SpringRole and WorkCoin.

Will Bloom Make Money?

Almost everybody who has a credit card knows that the credit scoring and reporting system is broken. In the United States, the system operated by the Big three credit bureaus (Equifax, TransUnion, and Experian PLC) only tracks payment history.

That means persons with little or no money and no job can have a “good credit score.” It also means that individuals with good jobs and plenty of money can have a “bad credit score.” This was one of the causes of the mortgage meltdown of 2007-2008, through the notorious NINJA (no-income no-job) loans.

Better means of evaluating, assessing, and managing risk for lenders are needed. Although, the market for such solutions might be that lucrative; TransUnion (NYSE: TRU) reported revenues of just $1.9338 billion for 2017, and a net income of $441.20 million for last year.

That means Bloom will need to tap other streams of revenue such as credit cards and lending. It will definitely need to tap markets beyond the United States to make large amounts of money.

Is Bloom a good Cryptocurrency?

The Bloom (BLT) is a questionable cryptocurrency because the business model is completely unproven. Further questions are raised by the fact Bloom is not participating in Bancor’s liquidity network. One wonders how a credit-associated altcoin can function without backup liquidity.

Bloom tokens have a little value they achieved a Coin Price of 42.1¢ and a Market Capitalization of $20.081 million on 6 June 2018. That price was generated by a Market Volume of $218,390. There was a Circulating Supply of 47.689 million out of a total supply of 150 million BLT on the same day.

I would say Bloom is a cryptocurrency to watch. There is certainly a market for the product Bloom intends to sell (better credit scores and identity solutions) but Bloom has not demonstrated it can fill that need. My recommendation is to not buy BLT Tokens until BloomIQ is attracting business from banks and other lenders.

Like many blockchain solutions the Bloom Protocol is a theoretical product. Investing real money in it at this point is a questionable strategy.