invoice financing

Populous (PPT) | Invoice Financing On The Blockchain

Populous (PPT) | Invoice Financing On The Blockchain

Populous (PPT) Platform

Populous aims to bring invoice financing to the blockchain and happens to be one of the highly ranked ERC20 tokens on CoinMarketCap. We could also say it brings blockchain technology to the invoice financing industry. I’m sure you catch my drift, either way. So, let’s find out what invoice financing is and how blockchain technology helps the industry. We will then look at how Populous tries to mesh these concepts together.

CoinMarketCap.com currently places Populous at number 27, with a market cap of over $575 million at the time of this writing. The price of each Populous token (PPT) is $15.66. Moreover, the price movements since Populous’ inception in July 2017 mimics that of Bitcoin and the entire cryptocurrency market.

What Is Invoice Financing?

Here is a simple breakdown of what invoice finance entails. Invoice Financing is one means through which companies gain funds for day-to-day company affairs. Instead of waiting on accounts receivable, the accounts receivables could be traded for funds in the meantime. Such deals are good for companies since products sold on credit could be paid for much later. The buyers of said invoices/accounts receivable are known as factoring companies. Another way of going about this is to use invoices to secure loans to take care of routine company affairs.

Great, But Why Does It Have To Be On A Blockchain?

Blockchain. a fairly new data structure that is a type of distributed ledger, is a truly revolutionary one. More and more people are realizing this as cryptocurrencies go mainstream. This has made “Blockchain” a buzzword in recent times. Another implication is that there is ”Blockchain everything” now. Some of the implications of the technology are really world changing. However, not every aspect of our lives need the application of Blockchain technology. Here is why the fellows at Populous believe the technology is needed in the invoice financing industry.

Among the reasons listed on the official website of Populous are the removal of high fees and other entry barriers to a market dominated by traditional financial institutions. Having an invoice financing marketplace on a Blockchain network would make the market a global and peer-to-peer one. There are also the security reasons. The implementation of smart contracts is another.

Notably, participants in local invoice financing markets can reach global markets on the Populous Blockchain. Businesses in countries without such services can also have access to invoice financing.

With a Blockchain, smart contracts can be executed in the invoice financing market. There would be integrated legal terms as well as procedures. One thing smart contracts do is reduce the need for trust. This can potentially minimize the chances of fraud. However, it must be added that, albeit being a good innovation, smart contracts could falter in certain situations where human judgment and common sense is required to correct an obvious error.

Invoice financing on a blockchain also means lesser fees for deals made on the market. Due to the removal of entry barriers, more entities can partake in an invoice financing market on a blockchain. This would lead to lesser fees since participants on the market would not be a few established financial institutions that can command higher fees.

Poken Token, XBRL Data, and Altman Z-score Formula

A global peer-to-peer blockchain like Populous’ involves transactions from all over the world. With participants from various countries using different fiat currencies, a common means of exchange is required. The Poken token serves this purpose. Pokens are pegged 1:1 to local fiat currencies and can be exchanged for fiat when withdrawals are made.

XBRL international’s eXtensible Business Reporting Language (XBRL) standardizes financial statements from different jurisdictions. Used in conjunction with XBRL the Altman Z-score Formula by Edward Altman helps protect and preserve the financial health of a business. Additionally, It lays out the likelihood of a business going bankrupt in two years and control measures for financial distress. By making use of this data on its platform, Populous is able to analyze information from various industries and detect opportunities and risks related to invoice financing on the platform.

Populous’ Purporse

It seems that Populous could have some legitimate use cases in the financial sector. Using blockchain technology might bring improvements to how invoices are processed. Therefore, we should try to keep an eye on Populous, by monitoring its progress and continued development.

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This is not advice.  Advice should be accepted by your chosen legal counsel only and financial advice should come from a licensed or certified financial professional. As always – do your homework and make decisions based on your own education.  Seek information and look into projects before adding to or diversifying your portfolios.