A new service called ‘Pure-Central’ has announced the launch of the first peer to peer (P2P) lending and trading platform to cater for the users of multiple different crypto-currencies.
Users of Pure-Central will be able to take out loans denominated in altcoins such as litecoin, Dogecoin, Namecoin, Peercoin, Darkcoin, AuroraCoin, and The World Currency, or to invest in loans to other users. A trading platform will also allow members to trade each of these coins against Bitcoin. Additional altcoins are expected to be added in the future.
Peer to Peer lending sites have proven to be quite popular within the Bitcoin community, with sites like Bitbond.net, Bitlendingclub.com and btcjam.com offering to match borrowers and lenders for crowdfunded Bitcoin loans. Until now, however, there has not been any service catering to the users of altcoins.
In order to reduce the potential for scammers to use the site to borrow money and then disappear, would-be borrowers must verify their identity with the site, and will then be given a credit score which they can improve by making repayments on loans arranged through the site. Lenders should beware, however, as they are liable for any losers as a result of borrowers failing to repay – something which is a regular occurrence on the Bitcoin sites mentioned above.
Borrowers who succeed in funding a loan through the Pure-Central site will be charged a 0.75% fee, whilst lenders can use the site for free.
In addition to replacing some of the traditional functions of the banking industry with a crypto-currency alternative, the site also opens up the possibility for traders to ‘short sell’ an altcoin by borrowing some, selling it, and then buying back (hopefully at a lower price) to repay the loan at a later date.