Puddle: Borrowing money from friends and/or relatives can undoubtedly lead to complicated and not particularly pleasant situations – however, many consider this to be preferable to dealing with banks or moneylenders.
They are addressed to them Puddle: a new application / service, which enables the user to borrow money from his / her social environment - his / her social network instead of through 'traditional' (banks, credit cards, etc.).
As indicated in a related article by Wired, the basic principle is simple: the user puts money in a digital "cup" and gets the possibility to draw from it five times (for example, if he puts in 10 dollars, he has "line credit' up to $50, which he can withdraw whenever he wants). Loans are repaid in monthly installments, lasting three or six months, without interest beyond a standard amount for each month (depending on the size of the loan).
This kind of creation of a 'fund'/'reserve' by a community is nothing new: in fact these systems have existed almost since money was created, and operate as 'interpersonal' banks, where credit is based on trust between of community members. As one of its creators, Skylar Woodward, explains to Wired (the others two are Matt Flannery and Jean-Claude Rodríguez Ferreira Masons) the challenge was to adapt this "offline" system to modern online data. Using the Internet for this purpose involves much faster speeds, and there is always the hesitation as to whether one can trust someone one knows only through a digital profile. That's why social networking elements were integrated into the application, in the style of Facebook and Reddit, with "reward" systems for "good behavior".
Puddle is self-regulating - and based on its designers, the principle on which it is based seems to work, as the service (which has been undergoing testing for two years) has a repayment ratio of 98%.
