Building the Credit Protocol on Ethereum wasn’t a no-brainer for the Blockmason developers. We struggled with the decision of whether to use Ethereum, to customize Ethereum or another blockchain and run our own chain or to start from scratch. There were various trade-offs no matter which option we chose, but ultimately we settled on Ethereum. While we still are open to at some point shifting the Credit Protocol to a different chain or rolling our own, the main thing that helped us make our decision to use Ethereum and keeps us on Ethereum to this day is the potential for gigantic network effects.
There is a very large amount of developer resources being thrown at Ethereum currently. Whether it’s the various ICOs (hopefully) building their projects on Ethereum, the Enterprise Ethereum Alliance or other companies doing more traditional startups using Ethereum, Ethereum is going through a massive onboarding process and it’s not simply individuals buying and holding Ethereum. The scale of development and what’s happening is unprecedented. Bitcoin never got close to this kind of attention development wise.
So how does this all help Blockmason and the Credit Protocol we’ve built? One example is when people start storing identity information on Ethereum, that information could be incredibly important for specific credit applications. That information can be used to determine the eligibility of someone that will be given credit. It also makes it easier for less sophisticated entities to give out loans, because now they don’t need access to specific credit checks only offered by big corporations. Instead they can simply apply an algorithm to information that is easily accessible.
It's also helpful to have assets stored on the same chain so that those could be used for collateral, if for instance you wanted to take a loan out based on those assets or loan at one asset for a different asset or currency built on Ethereum. In order for this all to work it’s ideal that there is the interconnectedness of everything like it is on Ethereum. There are a lot of proposals for connecting all the different blockchains, but so far all these efforts haven’t produced much.
Another interesting facet of this network effect is when people are using different protocols for their debts and credits, there is a possibility of reading all that information and then using it to evaluate an individual’s credit score. So the Credit Protocol could use information from other credit and debt applications running on Ethereum, this would be much more difficult to do if it wasn’t directly on the same chain with them.
With all of this (potentially) going on, it makes it a much more difficult choice to run the Credit Protocol on its own chain. Running it on its own chain starts to feel like running your own LAN instead of being on the internet with everyone else. That’s not to say that there aren’t trade-offs that one day might make it a better option to run on an isolated chain. Ethereum has a lot of work to do to increase scalability and speed. If the Ethereum network starts to experience serious congestion issues and another chain can solve these issues the decision to move becomes a lot more clear cut. Storage is also another issue, with Ethereum it’s extremely expensive.