LendingCalc.com‘s Ben McMillan and Mike Mazier may have the open source answer: They have filed to patent a fee-free system to use blockchain technology to generate unique identifiers for loans in line with the US Treasury's whitepaper “Opportunities and Challenges in Online Marketplace Lending.” The company is in the works to set up their system as an open source resource for the industry.
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LendingCalc.com co-founder and PUFIN co-author Mike Mazier said:
“Marketplace lending is in a rapid growth stage, which will make reliable and widely adopted systems and standards essential. The need to uniquely identify loans compares to problems addressed by currently standard systems such as CUSIP, which has charged fees to license its identifiers for decades.”
“Anyone will be able to freely generate a unique 34-digit address and associate it with evidence of a financial instrument using the same blockchain technology that has been well demonstrated by Bitcoin,” Mazier said.
“We are hoping the industry will not be slowed down by for-pay or proprietary identifier systems, which could stifle innovation in this era of big data. We're hoping to get around any resistance institutions might have by making ours both totally free and secure.”
The PUFIN project has been set up so that it can never be proprietary. (Learn more at pufin.org.) PUFIN licensing requires all uses of the license to be free of cost to all parties.
“PUFIN” stands for “Planetary Unique Financial Instrument Number” and was designed as a decentralized protocol to identify and track marketplace loans.
While built for marketplace lending, PUFIN can be used for any financial instrument. The system is patent-pending, open source and is based on blockchain technology. By fostering highly secure interoperability in online marketplace lending, PUFIN can help mature marketplace lending into a bona fide asset class.