Most people are familiar with the concept of “peer to peer exchange” from file sharing and piracy. However, this technology is being expanded out in interesting ways to enable many previously unforeseen applications. Start-ups are interested in creating peer-to-peer insurance markets, lending channels, and even instant messaging software in order to allow people to leverage mass networks. The point of all of this is to decentralize messaging and finance, which will hopefully make it easier for money to go where it needs to go. One of the big tech trends of the modern era is utilizing everyone’s computers to power networks with very little footprint on the company’s side for server storage.
Peer to peer insurance: The “everyone cares” model
One major startup is called PeerCover, which is designed to help people work together to cover insurance excesses. The idea is that, by having people sign up to pay excesses on insurance, everyone can save money in the long run by paying a lower premium. People will only have to pay insurance excesses if their claims wind up covering more than their insurance policy. By using PeerCover, everyone can work together to make sure that they paying less over time. This type of coverage isn’t covered by the Financial Markets Authority, and isn’t technically an insurance practice, so there is no federal regulation over the concept. The success of this service will hinge on people trusting each other enough to put money into a big shared pot, according to Interest.co.nz.
“Almost one million loans have gone through these programs.”
Peer to peer lending: a bank bypass
People, en masse, sharing money with other people through online websites is lumped in with the “sharing economy” that is also typified by Uber taxis and Airbnb bed and breakfasts. The central difference here is that, instead of providing a service like driving someone to the airport or letting them crash on a couch, peer to peer lending is about having people borrow and lend directly to each other. The websites running these services make a small profit from the arrangement fees and score credit so that everyone has an idea of who they are working with.
So far, almost one million loans have gone through these programs, and have lent over $10 billion a year. These services are characterized by lower rates for most borrowers. In fact, many of those using these services have been effectively pushing their credit card debt to peer to peer loaners in order to avoid higher interest rates.
Although the ideal of this service is that dentists are loaning money to carpenters, who are loaning to lawyers who are loaning to teachers, there are less pure peer to peer transactions than one would imagine. Much of the money that has gone into these services comes from hedge and mutual funds.
Would a secure chat client beat Twitter for social protests?
Peer to peer chat
A non-financial use of peer to peer technology is coming from BitTorrent, the algorithm responsible for the majority of current internet piracy. The software they’re putting out has the same semi-subversive feel as a torrent client – it is a (supposedly) ultra secure chat program, designed to keep people’s identities and messages secret while they communicate. Bleep, as the program is called, is available for all major platforms, including Mobile devices, and features encrypted communication, Snapchat-like disappearing messages, and screenshot protections to keep data from leaking out. Like all chat programs, however, it will primarily be limited by the size of its user base. How many people need to be able to communicate anonymously with others all the time? It depends very much on what the service is being used for.
