Challenges

Virtual currencies and smart contracts could aid pay-per-use business models by easier and cheaper financing

By providing an operational infrastructure for (smart) contracts and payments against a lower transaction cost (transaction costs are high for pay-per-use), overall cost of exploiting a pay-per-use business model could be reduced, leading to a better business case.

In addition, by using a shared database (e.g. Blockchain), financiers could gain better insight into payment behavior regarding the circulation and performance of circular assets, and with that better assess risks.

Also, because payments are automated and become more reliable receivables are faster (directly after use) lowering the financing gap for the entrepreneur (that normally has to wait until he receives payments) and having more direct control over the asset and the cash flows it generates. 
 

 

 

 

 

 

Comments (2)

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What can go wrong?
Natalie Geer
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  • I'm having a hard time with the feasibility of this case as a pay-per-use model for something that takes up a large amount of space inside a house. How are payments set up? Are they taken out of the user's bank account? What happens if there is not enough money in the account? Forgive me, I am new to blockchain and smart contracts and I am trying to understand how they work a bit more.

    Yasmina Lembachar
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  • If smart contracts are self-enforcing, I would assume the machine would simply not turn on if there is not enough money on the user's bank account. Re: feasibility- how do you see the amount of space that the machine takes up as an obstacle to a pay-per-use model?