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.

RELATED TERMS
  1. Pro-Forma Invoice

    A pro forma invoice is a preliminary bill of sale sent to buyers ...
  2. Factor

    A factor is a financial intermediary that purchases receivables ...
  3. Accounts Receivable Financing

    Accounts receivable financing is a type of asset-financing arrangement ...
  4. Accounts Receivable Aging

    Accounts receivable aging is a report categorizing a company's ...
  5. Due To Account

    A due to account is a liability account typically found inside ...
  6. Accounts Receivable - AR

    Accounts receivable is the balance of money due to a firm for ...
Related Articles
  1. Small Business

    Small Business: Speed Up Receivables To Avoid A Cash Crunch

    Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
  2. Tech

    The Best 5 Online Accounting Systems For Small Business

    Running a small business can be difficult, but thanks to these online accounting services, taking care of payroll doesn't have to be.
  3. Investing

    The Ins And Outs of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  4. Insights

    4 Global Economic Issues of an Aging Population

    Discover why dramatic increases in life expectancy is creating significant socioeconomic challenges for many advanced industrialized nations.
  5. Investing

    The Pros and Cons of Owner Financing

    Details on the upside and risks of this type of deal for both the owner and the buyer.
  6. Financial Advisor

    3 Reasons to Invest in Asia's Emerging Markets

    Emerging markets in Asia aren't on the rise at the moment, but they're best days are likely to be in the future. Here's why.
  7. Tech

    DAOs, Blockchain, and the Potential of Ownerless Business

    DAOs are possibly the most cost effective and fair business model ever conceived.
  8. Tech

    How Blockchain Technology is Changing Real Estate

    Blockchain technology will disrupt real estate as well.
  9. Insights

    How Demographics Drive The Economy

    Demographics can have a profound effect on the economy. An aging population coupled with a declining birthrate points to a decline in economic growth.
  10. Financial Advisor

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
RELATED FAQS
  1. When should a company recognize revenues on its books?

    When a company makes revenues from its operations, it must be recorded in the general ledger and then reported on the income ... Read Answer >>
  2. What is the difference between CIF and FOB?

    Learn about the differences between FOB and CIF international trade agreements and the advantages and disadvantages for sellers ... Read Answer >>
  3. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
  4. What's the difference between accrued expenses and accounts payable?

    Learn how companies use accrued expenses and accounts payable on their balance sheet and the difference between the two liabilities. Read Answer >>
Trading Center