This interview is part of our new Blockchain In Lending series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and lending.
In this interview we speak with Joseph Kelly, Co-founder and CEO of Unchained Capital, to understand how his company is using blockchain to transform the lending business, and what the future of the industry holds.
1. What's the story behind Unchained Capital? Why and how did you begin?
JK: The genesis of Unchained comes from our realization back in 2016 that so much Bitcoin doesn’t move and just sits around. There are millions of long-term holders out there who don’t do anything with their bitcoin because a) there are very few financial services for bitcoin and b) most financial services expose bitcoin to unnecessary risk.
We first saw this trend of how much bitcoin remains dormant back in 2015, after we recreated an analysis originally published by Reddit user jratcliff. You can see an updated version of this analysis on our blog post from April 2018.
2. Please describe your use case and how Unchained Capital uses blockchain:
JK: We use Bitcoin as collateral for USD loans. Bitcoin has 3 properties that make it the perfect form of collateral:
- You can receive it quickly and once you got it, you know you have it. There is no elaborate shipping or title clearing process. As well, through private key ownership you can control it without any dependence on an intermediary.
- It’s easier and more scalable to store while it’s collateral than if you were lending against Lamborghinis or fine art.
- There is a 24/7 global market that actively trades BTC/USD, giving you a constant valuation of the collateral and an ability to liquidate if things go south.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
JK: Our customers are often long-term cryptocurrency holders who wish to make an investment or large purchase without having to sell their bitcoin. Customers have used their loans for everything from purchasing real estate, acquiring equipment for their business, or paying their taxes.
4. What other blockchain lending use cases are you excited about?
JK: We think there are some exciting ways in which the blockchain will bring greater transparency to traditionally opaque and risky practices like securities lending, which lead to scenarios like that described in this article (read here) where different sources reported various total shares numbers for Dole Foods.
5. Where will Unchained Capital be in five years?
JK: We will be a diversified financial services provider for the new bitcoin-based financial system, giving our clients an excellent experience across multiple products including loans, income, and payments.