Anyone who has been closely monitoring the developments in the cryptocurrency universe must have stumbled upon the Populous platform by now.
The word “populous” is an umbrella term used to refer to the people of a community, state, or country. To introduce Populous in simple terms, it’s a revolutionary platform by which people within a community come together as a single entity to finance businesses which urgently need cash.
Read on and discover how it works.
What Does Populous Do?
Populous provides a highly convenient platform for invoicing and trade financing.
Let me explain this with a simple example.
Imagine that Mark is an entrepreneur who runs a small business in the UK. When he sells his goods or services to a buyer, he raises an invoice. This invoice is a commercial document which asks for payment within a certain timeframe.
To ensure that sales targets are met consistently, Mark may need to issue many invoices to multiple buyers. However, not all payment terms will be favorable to him. There can be a “slack” period during which he receives no cashflow at all. How will Mark pay wages, supplier dues, and other essential fees during a slack period?
Typically, Mark will apply for a loan from a financial institution. He will need to jump through all the hoops and endure the inevitable delays that are part and parcel of the banking game.
Populous provides an easy solution to this problem. On Populous, any small investor can contribute, with as little as $100. A group of such investors come together and immediately loan the required amount to Mark. These investors can belong to any part of the world.
Populous uses a Peer-To-Peer (P2P) platform that works as an auction-based marketplace, in that buyers try to outbid each other for invoices. The winner then gets to collect the principal plus interest for the invoice purchased.
Populous uses blockchain technology to achieve this by directly pairing invoice sellers and lenders, effectively cutting out third parties (i.e. banks and other financial institutions) and the fees they charge. An invoice-factoring platform built with XBRL data allows for smart contracts, and a credit risk system uses Altman Z-scores to assess the risk involved with particular borrowers, companies, or customers.
All in all, the reduction of risk from manual errors and duplication of invoice financing helps encourage micropayments between small and medium-sized businesses (SMEs). And the ubiquity of the platform allows for investment in companies across the globe.
For more details on the technical aspects of Populous, here is the white paper published by the developers.
Benefits of Using Populous
The benefits of Populous lie chiefly in the financial opportunities it offers small and medium-sized enterprises which, in traditional financial marketplaces, are feasible only for larger businesses. Banks and lending institutions generally have fees on their services, making borrowing money prohibitive to many SMEs. Cutting out the middlemen ensures that all businesses enter the financial arena on equal footing.
In addition to that, being able to auction off invoices to the highest bidder allows SMEs to get immediate funding, rather than wait the 45 to 90 days for customers to pay invoices. And for a small business whose profit margin is slim, that advanced payment can make a world of difference.
This, combined with the global scale of blockchain technology, allows for a more diverse and dynamic marketplace than traditional lending practices have allowed.
History of Populous
The British founder of Populous, Stephen Williams, is an expert analyst in the domains of finance and big data. He had a keen interest in XBRL (eXtensible Business Reporting Language), which was rapidly revamping the way businesses had to file their annual financial reports.
Williams started out by constructing a tool which extracted lists of businesses that were asset rich but cash poor. He began selling this data to financial institutions, using a primitive door-to-door method to generate sales.
The rise of blockchain technology was happening around this time, and Williams wasted no time in seizing a wonderful opportunity. The team found a way to construct a real-time financial marketplace by scaling XBRL data on the existing Ethereum blockchain.
The Populous Team
Stephen Williams is the founder and CEO of Populous. Zvezdomir Zlatinov is the CTO and Chief Smart Contract Developer, while noted economist Jonathan Millar is the Specialist Invoice Risk Financing Specialist. Together they work with a talented and innovative team of young developers. A detailed description of their roles can be found here.
How to Purchase Populous Tokens
Populous uses an in-platform custom stable currency called “Pokens.” They are pegged 1:1 with the national government currencies involved in the transaction. For example, 20 GBP will be pegged at 20 Pokens.
You can purchase Pokens at the following exchanges:
Fund deposits can be made through Bitcoin within the platform itself. Pokens are exchangeable with all well-established cryptocurrencies, such as Bitcoin and Ethereum. Additionally, Pokens can be exchanged for any government currency upon withdrawal.
The traditional global trade-factoring market is estimated to reach $4.4 trillion by the end of 2017. Populous has great potential to disrupt this market and use its predictive capabilities to expand it further, while opening it up to new players.
Populous will need to demonstrate its capacity to consistently churn out great returns for its investors. However, once they manage it successfully, the scope for geographical and fiscal growth is potentially limitless.