Most of us know that blockchain technology is going to be bigger than the Internet itself. With companies coming in recently and showing us new projects that could end up in the 'Fortune 500' of the future, here's a solid player that has a great possibility for that.
Meet HIVE, which is going to utilize the blockchain technology and the power of smart contracts to solve the problems with invoice financing which before was an unfair and tedious work.
The Current Problems With Invoice Financing.
The current invoice system usually takes 90-120 days for the sellers to receive their money from previous sales. But sometimes business owners, and especially small business owners who because of cash flow reasons might need immediate funds to pay for materials, production, salaries and other business expenses usually go through inconvenience.
It is solvable through selling the invoices to 'factoring companies' but there's another problem.
The factoring companies provide financing that lets companies sell their invoices for immediate funds. Factoring is different from loans because you are selling an 'asset' than getting a loan so it's easier to get financing for.
But the problem with traditional factoring is that it takes a lot of tedious and manual work to get verified for funding, which only wastes time and leaks even more money. And most of the time, because of the long verification process and huge collateral to get approved, small businesses don't pursue this route.
That's where Hive comes in.
What Is Hive?
Hive is the first crypto currency invoice financing platform which will provide new financial liquidity to small business by giving them various crypto currency financing options.
Hive is built upon the Ethereum blockchain ecosystem, which truly makes everything transparent with smart contracts. Every invoice that will go through Hive will have a unique fingerprint to prevent any frauds or refinancing (double spend/sell). There will be a central data room to keep a record of all the invoices' issuer, owner, and payer and the invoices will be tradable on the market. All of the data stored would be protected because of the blockchain technology. Only the people approved by the vendor will be able to view the data that has been available to be seen. And for the lenders, only the core information would be available to be seen.
They are planning on building a distributed on-chain search functionality to be used for the invoices and associated descriptions. They will also have the technology to conduct in-house credit checks on the companies to ensure credibility.
Hive will make invoice financing and the life of small businesses easier by cutting down costs, lowering the risks, and eliminating the wastage of time.
How Will It Work?
- Suppose an invoice is created by a vendor through Hive and is sent to the buyer for processing.
- After processing, the vendor marks that invoice to be available for financing.
- Suppose I am looking for an investment opportunity and I found the contract and the vendor. I then approach the vendor by attaching an addendum with my buying conditions.
- If the vendor agrees, he then block signs the addendum.
- After that, I would block sign the addendum and get it tokenized. The vendor will receive his funds in tokens instantly.
- Then the buyer will get informed that the beneficiary has changed, which means I would be waiting 90-120 days to get my ROI with some profit.
That's it. And everything would be transparent thanks to the blockchain technology and the power of smart contracts!
After the 2009 financial crisis, the market for invoice financing really started taking off with adding over a trillion euros to annual invoice financing volumes. In 2016, these volumes surpassed 3 trillion euros in annual volume which is continually growing!
According to Hive's timeline, they are planning to geographically target these locations for the year 2018: Austria, Slovenia, Croatia, Germany, Scandinavia, Bulgaria, Czech Republic, Slovakia, Poland, Hungary, and UK. And then for the year 2019, its France, Gulf countries and the US. They will target the local markets in these locations with various local invoicing systems that are being used by the businesses there and not only that, hive is also planning on integrating popular existing invoicing systems like Quickbooks, Freshbooks, Navision, SAP, StageOne, etc.
With not just businesses, but the average investor will be able to take advantage of this platform by lending. It's the power of the blockchain and decentralization, that there won't be just a few lending companies taking up the whole pie. It's more than a trillion dollar pie, with everyone having an opportunity to take a piece.
The 'HIVE' token will be used on their platform as a fuel and will be offered on multiple exchanges to trade.
Hive's initial coin offering is currently going on right now and will end on the August 12th. The minimum capital to be raised is 2000 bitcoins and the hard cap is 10000 bitcoins. Should the minimum funding is not reached, then all of the funds will be refunded. Since their ICO is running for 6 weeks, they are offering bonus tokens for early participants as follows:
- Week 1 - 15%
- Week 2 - 12%
- Week 3 - 9%
- Week 4 - 6%
- Week 5 - 3%
- Week 6 - 0%
The total supply is 500,000,000 tokens out of which 75% is for the ICO.
Note that they recently won the 'Best ICO and Startup Competiton at CoinAgenda' in Barcelona. To compare that title, last March, Bancor won this same competition in Puerto Rico, and they raised over 150 million in their ICO. And with a really solid team behind Hive, I am pretty sure they have a lot of potentials to bring their project to life and to the people.
ps- “US citizens are not legally allowed to participate in the Hive Project crowdsale.”
Always do your own research and use your own due-diligence before making any investments in any startups.