How it works?
Peer to peer most of us know from Torrent. It is used to connect multiple computers to each other without the use of a server. In this way, computers communicate in a direct way, not via an intermediary (server). This linking method is used to share data between computers. By sharing content from multiple computers, it is possible to download data faster by accessing multiple computers with this content and downloading individual parts of data at once. In this way, it is possible to avoid payments of intermediaries (servers) for access to data.
Nowadays peer-to-peer includes loans. The five largest peer-to-peer platforms have made unsecured $ 24billions of loans. Peer to peer loans began in 2005. Their greatest strength is their easy accessibility via websites. Lower interest for the borrower and higher remuneration for the investor. This can be achieved if you do not need to maintain an intermediary, such as a bank, in the bank there are lots of staff and facilities that cost a lot of money a month. In the case of peer to peer, this does not exist and thus reduces interest on repayment. The most important are for small traders that banks are ignoring or evaluating as a risky investment. Another advantage is the rate of loan settlement. This process takes from one day to two weeks. Peer-to-peer lending works so well that it has spread very well between borrowers and investors in recent years, making it popular.
Future of P2P
Peer to peer will be used in many other investment areas in the years to come. For example, collective investment in some investment funds is impossible for individuals to get. But by peer to peer it will be possible by linking individuals' investments to one large. Interesting is also peer-to-peer insurance that owes the insurance company as we know it, but it is an association of insurers who put their finances into the fund and have the opportunity to get a part of the profit. Also, after the agreed period of insurance, without claiming damages, the part of the premium returns back. Or, the premium will be reduced.