From a less sophisticated mind-set, this is how I view Prosper:
1. It actually helps individual people and very small businesses, without a lot of hoops. Charity is nice and I would give to Kiva, but at the moment I'm looking for investments, not just a parking space.
2. I have a real love-hate relationship with investing in large companies, directly or indirectly through mutual funds. I don't think of money as a game, I think of it as a dangerous weapon when concentrated in the hands of corporate entities and I'd rather not have that particular blood on my hands. YMMV, just my opinion.
3. I realize that there is a risk of default, but as long as that doesn't happen, I have a fixed rate of return. I really Hate investing in things that might go up, might go down, who knows. I want to know how much is going into my account. I'd rather take a risk of default than the stress of updownupdown.
4. Prosper takes some of the middlemen out of the lending equation. This is a good thing. Yes, the contract is with Prosper, and not the individual borrowers, but you do get to pick who's in your portfolio and get at least some idea of their risk, it's not completely blind.
5. It also mitigates the risk of loaning to one individual - sorry, Solon.
So ... I'm not quite getting the wild hostility toward it. ??
Aside: what happens if you live in a state Prosper accepts and then you move??