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What is Populous?

August 21, 2018

 

Since last year’s explosion up to over 1000 Cryptocurrencies listed on industry hubs like Coinmarketcap, we have seen Blockchain projects that claim to be the new and improved version of just about every area and activity in business.

 

Now, there’s even the Blockchain solution for invoice financing, called “Populous.” In a very general sense, Populous is trying to be the platform where people group together to help businesses that they are interested in, raise needed capital.

 

When this is known, it is not off-base to wonder why we need such a solution when so many crowdfunding platforms exist and have been successful as well, without the Blockchain.

 

Therefore, just as with any Blockchain project, the first question that we should ask is: where is the added value?

 

To understand this, we first need to understand that Populous is not actually trying to be a crowdfunding platform. The capital that they are trying to help businesses raise is related to the invoicing period.

 

As is described in one review of this project, one simple way to understand what this means is to think about what happens after a small business sells a few products to a customer or a group of customers.

 

Typically, these sales do not mean that the business immediately ends up with cash in hand. What they have at first, is an invoice or a series of invoices from the customers involved, which as we know, is synonymous with a binding agreement that the cash will reach the business in a certain amount of time.

 

With this, the key question that Populous is trying to address is how the Blockchain can help businesses to better deal with “slack periods,” which are times between invoicing and actually receiving these previously mentioned payments.

 

According to the same review mentioned above, the value of the blockchain in this begins with the fact that small businesses typically take out loans to deal with these slack times, which are the times when they have to wait for payments and at the same juncture, still make payments.

 

With Populous, banks are taken out of the process and their blockchain pairs businesses with individuals who are interested in purchasing their invoices for a period of time.

 

In effect, what this seems to mean is that instead of taking out a loan with banks, the business ends up taking out a loan with these individuals that is monitored by the Populous blockchain.

 

Thus, in the end, the question remains: where is the added value?

 

 As of now, the major possibility seems to be that since banks typically give larger, more established businesses lower fees on loans, Populous levels the playing field for small businesses.

 

Over time, we will see whether this is enough or whether a greater use case may be developed to generate further demand.

 

 

By: BGN Editorial Staff

 

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