Why I’m not hot on Prosper.com, the new U.S. based peer to peer banking system
Michel Bauwens:
Ross Dawson of the blog Trends in Living Networks mentions and comments upon a new P2P-banking initiative, Prosper.com . Ross outlines the conditions through which it could eventually become competitive with traditional banks. I would outline the following problem however: to which degree is a P2P-bank different, rather than competitive with a traditional bank. If a P2P-bank is merely a new type of bank with distributed shareholders, it would still essentially operate in a for-profit mode. Fine, but in the end, nothing to be much excited about. It only starts to be interesting when the distributed forms of capital start to enable different kinds of logic. Microbanking is interesting because it opens up the activities of much larger pools of people, and because of the collective logic of control creates community. For a peer-bank to have value, it should open up new avenues of, say ‘social entrepreneurship’. If a peer-bank assesses creditworthiness in the same way as a traditional bank, it would end up excluding the same type of people from economic activities. These are just questions, and I do not have the answers yet, but they should be asked.
At first impression, there is a definite change of feeling-tone if you compare ZopaWeb to Prosper. The Zopa bank presents itself as an exchange, which implies a conscious interconnection between parties; Prosper defines itself as an online marketplace.
In the New York Times article, the arguments used by the founders are that the new model is leaner, and there is also a bidding process, which makes the market a pure power play just as in ordinary capitalism, the difference being that the process is more distributed.