23-11-2016

[Jumba]

Report

During the meeting we showed our progress and discussed issues we were facing.

Feedback on screens

A borrower can only take one mortgage, so no need to have a table showing outstanding mortgage loans. Add the option to show the 'default rate', with 'default rate' being: "The interest rate charged to a borrower when payments on a revolving line of credit are overdue. This higher rate is applied to outstanding balances in arrears in addition to the regular interest charges for the debt." Johan mentioned adding a PDF viewer in the GUI.

Discussion about the extent of decentralization.

During the meeting with the Stephan (the client) they mentioned some functions they would like to see in the software, which would work against the decentral nature of the application.

These were the following:

• A master key in possession of a 'supervisor/inspector', the Dutch National Bank was mentioned as an option to fill this role.
• The option for credit agencies to run continual credit checks on everyone with an open mortgage looking for funding, optionally against payment
• An escrow ran by the bank per mortgage they accept for payments to be sent to during the collection period, and returned to the investor if the goal isn't reached or sent to the borrower if it is.

Our coach said that it's up to to us to decide 'Is the bank central, or the client?'

TODO: Discuss which direction we want to go with the implementation. Fully decentralized, regulated, or something in between.

Scalability

We mentioned our fear that the blockchain would become really big due to the large amount of documents involved in a mortgage application. This has been deemed as a problem out of the scope of our project.

Dispersy

We discussed the complexity of Dispersy. Martijn happened to barge in at the right moment, and he discussed a few dispersy details with us, and how we should approach it. He also requested that if possible we document everything we learn about dispersy which aren't in the manual and submit them to the dispersy docs.

TODO: Try the 'Hello World' tutorial and formulate questions for Martijn/Quinten based on the result.

Github issues

Use the github issue to dump everything so the coach and clients can follow our progress. We agreed to do this. Use ticket #2606

Related initiatives & Introduction

TODO: Augment the related initiatives page with 'Bouwsteen.org' and 'Gradefix' TODO TOO: Write introduction for problem and subject.

Risks

We discussed a few risks the project faces. These are:

• Fraudulent submissions for mortgage
• ID-Control. By law the passport/id has to be physically checked by a variety of methods to ensure its integrity. How will this be handled? _This could be a use for oracles that check identity. Or can only the bank do it? [Question for Bart]

• Sabotage. How can the correct working of the system be sabotaged? _

  API

  Martijn suggested we create a RESTful API that at the start provides dummy data so that the view can be created and properly tested before the (blockchain) database layer is completed. He suggested using SQLite for local data storage.

The API will have to be described first. Our market will implement 'unique asset trading'. These unique assets could be identified by a 'uuid'. Take a look at encryption possibilities with a master key etc.

[ahovanesyan]

Product Backlog for Sprint 2

• Basic flow-functionality of the screens working.
• Screen functionality working on dummy data.
• Dispersy tutorial and/or documentation.
• Application API containing get, set, encrypt, decrypt, generateKey and other methods used by future back-end.
• Use of GradeFix in the application
• Introduction for report with introductory and additional information concerning the housing market and mortgages and current limitations. Key question: 'How much is the mortgage market in the Netherlands worth'
• Encryption?

What exactly will be done the next sprint will be decided by the team before Monday 28-11-2016.

[seuushi]

Callmeeting Bart 23-11

Meeting with Bart 13:00h 25-11.

Q: Does the bank have to perform the passport check? A: The bank is the mortgage provider, so the bank has to perform the check. Not a third party.

Q: Are there costs for analyzing the risk and who will pay for it? A: Bart will look into this and come back to us.

[seuushi]

Decentralization? Meeting 23-11 16:20-16:57h

Listing the pros and cons of decentralization.

Pros:

1. There is no party that can abuse the system.
2. It can't get shut down.
3. The system will be free for the users.
4. Less laws the system has to abide to.
5. No one to blame when laws are not abided.
6. No central server bottleneck.
7. No central point of trust (pro and con).
8. Unbounded scalability.

Cons:

1. Complexity implementing (No server, p2p).
2. There is no central point of trust (pro and con).
3. No peer can 100% be trusted.
4. Uncontrollable.
5. Banks have to be hard coded in, cannot be modified unless the user updates the software.
6. Security risks by giving oracles private keys.
7. People with fake identities pledging amounts to mortgages which they do not intend to fulfill, will disrupt the system.
8. Fully decentralized places a lot of trust in the investors to back up their promise to invest.

Note: A possible solution when investors do not keep their promise: make personal contracts between borrower and investor. Investor has to promise to pay the borrower within a certain timespan after the funding goal has been reached.

Questions:

• If the house costs 200.000, the bank gives 120.000. Does the person have to have 80.000 before the bank can give them the mortgage?
• If the system is centralized to an extent, who is allowed to have the master key? (privacy wise)