With the proliferation of cryptocurrency across financial markets and the wider world, it only makes sense that utilizing digital currencies like Bitcoin could serve as an alternative to traditional banking and finance. Many governments and central authorities across the world have attempted to stem the rise of decentralized cryptocurrencies by banning ICOs (China), or embarking on endeavors to build their own cryptocurrency (Russia and Venezuela).
Despite its detractors, Bitcoin is emerging as a store of value in the eyes of many, especially for the Denver Colorado team behind SALT (Secured Automated Lending Technology). SALT’s a new platform that intends to revolutionize the cryptocurrency industry and bring a new dynamic to finance. Publicized as “traditional lending secured by cryptocurrency” SALT lets users utilize their Bitcoin as loan collateral.
Pushback Against Bitcoin as a Means of Exchange
The SALT ecosystem is designed to give borrowers access to capital on demand through the power of the blockchain. The SALT team considers their platform to be similar in function to traditional financial products. However, experts and bankers like J.P. Morgan CEO, Jamie Dimon have expressed concern about decentralized cryptocurrencies as a medium of exchange, due to volatility, and government action. Dimon believes that “there will be no real non-controlled currency in the world. There’s no government that will put up with it for long.” He goes on to describe Bitcoin as “worse than tulip bulbs.”
With such pushback from decision-makers in the financial industry, one could expect few banks to offer loans against digital collateral. SALT hopes to fill this gap by giving users access to fiat currency without selling their cryptocurrency investments.
What Is SALT, Exactly?
SALT is not an ICO. It’s not setting out to crowdfund an idea. According to the company, SALT is “a next-generation lending platform for blockchain-backed loans.” Rather than relying on a credit score, SALT states that “Borrowers are automatically matched with capital from our extensive network of lenders. SALT keeps collateral assets safe in a fully-audited, ultra-secure architecture during the life of the loan so members can borrow with confidence.”
Is SALT Lending Beneficial?
Imagine that you sold your Bitcoin in 2016. You’d be massively disappointed at the end of this year unless you decided to jump back in to buy during the dips. With SALT, investors can borrow in an asset that they want to spend with, all while maintaining a long-term position in a blockchain asset.
SALT is actively accepting members, and has plans for expansion into APIs, credit cards and alt coin collateralized loans. It is only available in the United States, but may become available in Ireland, Canada and other countries.
SALT CEO Shawn Owen said that conversations among people on the initial waiting list of borrowers revealed that many who were interested in the service were disappointed and even a bit angry that traditional banks did not recognize the inherent wealth found in blockchain assets. The SALT website suggests that individuals like day traders and long-term investors can see benefit from the service, along with institutions like remittance services, gaming platforms, miners, and payment processors.
The million-dollar question, of course, is whether it’s worth utilizing the SALT lending platform, and how much risk is involved. While we are not financial advisors and this is not financial advice, our research has revealed a number of important facts to consider before making this decision.
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