DEFINITION of Populous (Cryptocurrency)
Founded in 2017 at a high point in the blockchain and cryptocurrency craze, Populous is a peer-to-peer invoice platform. It makes use of blockchain's distributed ledger technology to provide a global trading platform for invoice financing.
According to the Populous website, "invoice finance is a form of funding that instantly unlocks the cash tied up in outstanding sales invoices. Business owners allow invoice buyers to buy invoices at a discounted rate in order to unlock their cash quicker. Once invoices are paid by the invoice debtor, the invoice buyer receives the amount previously agreed upon."
Effectively, Populous aims to reduce or eliminate the need for either third parties in invoice transactions, or for financial institutions which have traditionally been moderators in these types of deals.
BREAKING DOWN Populous (Cryptocurrency)
In the Populous platform, there are two primary types of transactors: invoice sellers and invoice buyers. Invoice sellers could also be thought of as borrowers, while invoice buyers could be thought of as investors. Initially, an invoice seller offers an invoice with specified terms, which is then available through the Populous platform.
An invoice buyer views the available invoices and determines which one(s) he or she would like to invest in. The invoice buyer makes a bid for the listed invoice, setting an interest rate in the process.
Next, the invoice seller views and confirms that bid, and the invoice is sold. At this point, the invoice seller releases the invoice and receives funds equivalent to the bid. Once the invoice is settled at a later time, the invoice buyer receives his or her funds and returns back.
Global Invoice Market
The invoice market is not a new concept. In fact, invoice markets exist around the world. However, they tend to function in localized and limited market areas. Where Populous aims to impact the invoice market is in its scale. Buy connecting business owners with invoice buyers all around the world, Populous aims to create a global invoice market
Populous claims to offer a number of benefits within its service. First, the platform offers high speed and low costs; invoice sellers are able to receive immediate funding from invoice buyers without the need for third party intermediaries. Because smart contracts are used to perform funding and the collection and release of payments, transaction fees remain low. (See also: Understanding Smart Contracts.)
Additionally, Populous claims to offer both buyers and sellers access to transactions and the Populous platform around the world, regardless of location. Further, the Populous platform records all transactions in a transparent way and on the ethereum blockchain, helping to insure safety and privacy throughout the process.
Populous Cryptocurrency (PPT)
In order to offer funds to invoice sellers, Populous maintains a Liquidity Pool. This is tied in with the Populous cryptocurrency (PPT). An investor securitizes PPT by making an initial purchase. PPT is then held in escrow as collateral throughout the process.
Transactions between invoice buyers and sellers take place with Pokens, exchanged for PPT and used as the currency for buying and selling invoices, either drawing from or contributing to the Liquidity Pool in the process. As a result of this built-in liquidity component, Populous at this point requires no transaction fees. In fact, the only fees levied are those associated with late payments.
Populous invoice transactions can cover a huge array of industries, including many which are not typically available to traditional financing companies. These might include industries such as exporters, creative agencies, technology companies, consultancies, software licensers, wholesalers, retailers, recruitment agencies, construction companies, staffing, oil and gas, and freight and transportation.
At this point, the platform supports both the United Kingdom and China/Hong Kong markets. This means that invoices originating from those two countries are able to be sold through the Populous platform. As time goes on, it is likely that Populous will aim to expand to more countries; this will help the platform to achieve its goal of becoming a true global market.
Another important step in this scaling process is the fact that invoice buyers face no minimum requirement in order to participate in the marketplace; invoice buyers are also not restricted by geographical location. They are, however, subject to rules and regulations depending on the country in which they reside.
Besides transaction security and privacy associated with blockchain technology, Populous takes additional measures to protect its customer base. These measures include multi-factor authentication for account access and background checks for all invoice sellers. According to the Populous website, "by submitting the required information [for seller background checks], Populous can conduct credit risk analysis using the XBRL dataset which form the backbone of the assessment."
Populous aims to help businesses secure cashflow quickly and efficiently by connecting invoice buyers directly to invoice sellers. Although the company is a new one, it hopes to join the ever-growing list of blockchain and cryptocurrency-related companies to achieve significant success on a global scale.
Populous CEO and founder Steve Nico Williams has been accused of fraud by members of the cryptocurrency community. The issue remains hotly contested at this time, with some outspoken detractors of WIlliams and Populous claiming that the cryptocurrency is a scam.