Blockchain technology is going to disrupt many industries but the biggest effects will be felt in the banking industry.

Banks provide a lot of services by putting up a front that they are reliable, and most of the time they are. The problem with the current banking system isn't that it's not trustworthy, the problem is that banks are just middlemen that feed on fees they charge on both ends of their customer base.

Most banks pay an interest rate that is less than 1% but the typical mortgage rate is close to 4%; mortgages are secured loans because if the person defaults, the banks gets the house. Not only does the bank get

Huge middlemen fees for banks were justifiable in the middle ages because it was nearly impossible to go find a person or business to whom you could lend your savings.

Today, the internet wipes away this problem. Everyone is connected on the giant network that the web has become, and it keeps getting bigger. The blockchain is the next step in making sure this web can be used to deal with more than just information.

Blockchain Solutions for Loans

Blockchain technology can make it possible to use all the access and interconnectivity the internet provides for financial activity. With the evolution of smart contracts, even complex financial products like loans can be issued in a p2p environment.

Vena Network is developing untapered smart contracts that can be uses to build escrows for p2p financial activity like loans and over-the-counter trades. These smart contracts can be used to set conditions on which a collateral will be held and, once the conditions for release, primarily the return of lent funds and the demanded interest, are fulfilled, the collateral will be returned to the owner.

Loans are a complex financial product. Banks are not the only ones that are involved with their issuance. Government entities are there to make sure qualified groups have the ability to become an issuing bank, legal systems are in place to make sure lending conflicts are resolved, and the baton of the law makes everyone acts in an honest way, or at least in a mostly honest way. A lot of blockchain projects have just tried to make a p2p lending platform, Vena Network instead recreates the lending environment that exists in the world right now, but it does so without turning its ecosystem into a centralized entity; that’s the magic ingredient.

Vena Network simply puts certain limits on who can issue loans. Lenders are called Vena Nodes and they need to stake VENA tokens so they have an interest in sustaining the long-term success of the platform. They must also prove the qualification to hold the position by having knowledge about the lending market.

Vena Network will also include a Jury. The Vena Jury will act to make sure human decisions are used when there is a conflict. Jury members will have to stake tokens as-well because they must act in the best interest of the platform, and not their self. The Vena Jury must make the right, just decision.

Vena Network recreates a functioning lending market in a p2p managed ecosystem. Nodes lend to borrowers and then Jury members act to resolve any dilemmas. This happens without a government agency's commandments.