I find the explosion of peer to peer lending very interesting. Avoid the bank, lend money to someone who needs it – you get a better rate on your investment than a bank would give you, they get a better rate on a loan than a bank would give them. It’s a win-win. As long as no one defaults.

I love the openness of it, the eBay quality. We buy and sell things for money, why not just buy and sell money itself? Clearly a reputation mechanism is key to this working.

So if we go five years in the future, will anyone remember this, or will the banks be screaming mercy? Is this to the banks what Napster was to the recording industry? Is this a classic case of a spider battling a starfish. I look forward to finding out.

If I was a betting man, I’d say that this will have a significant impact on banking, not a life or death impact, but enough that banks and credit unions will notice and either try to buy some of these guys up or start their own.

Time will tell if I’m right. What do you think?


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