The practice of lending got its start 4,000 years ago and has stood the test of time. We have gone from loaning seeds to loaning fiat currencies to loaning digital currencies. This transition obviously did not happen so quickly. Technological advancements have played a huge role in getting us to where we are now with crypto lending. One period that was significant in the progression of loans was the Industrial Revolution.

 

Technology marches on

 

Agriculture-based societies were responsible for innovating the simple practice of lending and borrowing. Likewise, the Industrial Revolution essentially accelerated the trend. Utilizing new fuel sources and machines led to an increase in the output while at the same time decreasing the input. A bull can till the land that is needed to plant crops, but the bull also needs resources to do so. Machines do not. 

 

Even still, farmers who want to boost their efficiency in a competitive environment need to find out how they can invest in more machines. A farmer who is subsisting off of livestock labour will find it difficult to establish a large enough surplus to make an investment like this. 

 

This is one notable way in which the Industrial Revolution effectively created a greater need for credit. Furthermore, it was not just agriculturists who demanded this. 

 

Work gradually started to centralize within different cities around the globe. There would later be a congregation of workers in Manchester, Chicago and other places, which lead to mass urbanization. Similar to farmers, workers were in need of beds to sleep in and a roof over their heads. No surplus meant that workers had to tap credit just so they could make ends meet.

 

Evidently, there was a greater need for credit and workers who appreciated a more stable income. From this demand came the emergence of new types of financing. Examples include home mortgages, installment plans, and the unavoidable financial bundling of these offerings. 

 

With all of this in mind, it is not hard to see finance’s trajectory – in particular, borrowing and lending – when delving into its historical roots.

 

The modern era

 

Nowadays, we find ourselves in the middle of another Industrial Revolution; the fourth one to be exact. This time, it is an ongoing automation of traditional industrial and manufacturing practices with the use of smart technology of the modern era. Along with these changes and inventions was the introduction of cryptocurrency and blockchain technology.

 

Numerous blockchain technology applications have had a hand in kick-starting the fourth Industrial Revolution. This technology that placates the requirements and demands of the digital age is introduced with cryptocurrency. As it stands, cryptocurrency is the largest innovation regarding financial technology. This specific brand of technology emerged as a connection between financial services with technology and is the first application of blockchain systems.

 

With all this in mind, it is not a stretch to claim that the Industrial Revolution’s influence on the practice of lending didn’t end in the 20th century. Even today, we are still seeing advancements that more or less guarantee crypto loans’ continuous developments and staying power.