In case you didn’t think the blockchain was important, apps are now being built to solve problems that don’t exist for it yet. But these are not just any apps; Y-Combinator is the breeding ground for a business called Dharma.
Dharma will make it possible for users without the relevant tokens – usually issued during an ICO, or Initial Coin Offering – to access dApps, otherwise known as decentralised apps. Basically, dApps are applications that are built on top of a blockchain and are open source. Already plenty of these exist, including applications designed to predict markets, store personal information and gain crowdfunding.
Each of these dApps, or DAPPS, or Dapps (the internet hasn’t decided yet) requires access to tokens, which are often difficult to come by unless you were involved in the initial stages, as previously mentioned, during the ICO. That’s where Dharma comes in. Users can borrow a small amount of Ethereum in order to purchase tokens without even leaving the platform they are on. This means that users can be involved in blockchain technology without having to purchase the relevant crypto currency.
So you can borrow? Almost anyone, because Dharma will pretty much allow any verified human to borrow a very small amount of ether. Over time, once you’ve built up a solid borrowing history you can increase your lendings and as you pay them back, you can borrow even more.
But Dharma makes no money out of these transactions. So what’s the point from a business standpoint?
Information. Dharma gains access to borrower information and learns the likelihood of them paying back the loan through advanced data analysis and machine learning. The aim of the application itself is to become a credit approvals system for other organisations, focused on allowing banks and financial institutions the opportunity to broaden their customer base. The theory is that if Dharma can prove itself as a solid analysis tool and builds up a base of findings, banks will be able to loan money to more people, including those outside of their traditional loan restrictions. People with no credit history or former bankrupts may be put in a position to be able to borrow if the data from Dharma proves positive.
In the meantime, we are still trying to work out what all these terms mean and while many dApps are already live, the fact that most technology sites have little to no reference to them, means that their mainstream usefulness is a long way off.