What it is
An order to pay, that can be handed on
A bill of exchange is an unconditional order to pay a fixed sum on a fixed date: the seller draws it on the buyer, who accepts it. When the buyer signs first, promising rather than ordering, the same obligation is a promissory note, and all three forms are set out below. Either way the seller holds it, and anyone who holds it can pass it on in payment to somebody else.
That last property is the whole point. A bill is not a receipt for a debt. It is money-like, because it circulates. Each person who endorses it stays liable, so the instrument accumulates security as it travels. One limit is deliberate: only bills drawn against goods already sold and delivered can be minted into e-cash. Credit appears with a real delivery and is extinguished when the bill is paid, which is why it cannot inflate.
Sum certain
No range, no formula. One amount, or the bill is void.
Maturity
A date, not a condition. The clock is the only trigger.
Payer
The buyer, who owes at maturity.
Payee
The first holder, and whoever the endorsements name after.
Place of payment
Which jurisdiction enforces it, and in what currency.
Signatures
Issuance and every endorsement, cryptographic and in order.
Miss one essential and the instrument is not a bill, just a promise.
What you have to prove
Three proofs, and no committee
A bank asks for accounts, collateral and a credit history. The protocol asks for evidence that the trade happened. Both sides upload their half, encrypted; nobody else reads it.
Seller uploads
Proof of value
A signed, encrypted invoice for the goods sold, attached to the bill itself, whose hash is the bill's identifier, so the two cannot be separated. The sum is the price the two of you negotiated; no assessor sets it for you.
Buyer countersigns
Proof of delivery
An encrypted confirmation that the goods arrived. Bills are issued only for goods already produced and services already rendered: no delivery, no e-cash.
The chain records
Proof of payment
At maturity the bill is paid in outright Bitcoin on the mainchain. Payment is publicly verifiable, and it extinguishes the bill and every unit of e-cash split from it. Each bill paid on time also adds to a permanent record of your own honesty, creditworthiness you can prove to a new counterparty without asking a bank to vouch for you.
Three types
Who owes, and who gets paid
Every e-bill names a payer and a payee. What changes between the three types is whether those are two parties or three, and which of them you are.
Draft
Drawee pays to payee
Three parties. You draw the bill, someone else owes the money, and a third party collects it. The classic instrument of cross-border trade.
Self drafted
Drawee pays to me
Two parties, drawn by the seller. You order your buyer to pay you on a date: the ordinary way to put a receivable on paper.
Promissory note
I pay to payee
Two parties, issued by the payer. You promise to pay your supplier on a date, which is how a buyer extends its own credit into the chain.
Six centuries of the same instrument
The form is old. That is the argument.
Merchants settled across borders on these long before wire transfers, and courts have been enforcing them ever since.
1873 · ENGLAND
A domestic trade bill. Same six essentials an e-bill carries today.
1886 · AKYAB, BURMA
Rice shipped from a colonial port, financed on a bill drawn in a distant currency.
1922 · TOURCOING
A textile manufacturer's bill: the same trade, the same mechanism, a century ago.
Legal standing
Why a bill bites harder than an invoice
In case of a payment default the holder receives an immediate title of execution from the court for the payer's entire assets, without first arguing about delivery, quality or set-off. That is exactly why buyers pay a bill before they pay an invoice.
1930
Geneva Convention on bills of exchange and promissory notes, one uniform law across most of the trading world.
2017
The UNCITRAL Model Law on Electronic Transferable Records is adopted. An electronic bill now stands on the same footing as paper, wherever the model law has been enacted.
2023
The UK enacts it. English law, the default law of global trade, now recognises electronic bills.
What Bitcredit adds
Identity, signature and endorsement without a registrar. The bill is a file that only its lawful holder can transfer, and its history cannot be rewritten.
What it does not add
No credit scoring, no guarantee, no insurance. Bitcredit does not decide whether your counterparty is good. You do, as you already do when you ship on terms. Try the whole flow first on the Testnet playground if you would rather rehearse.
Two ways to get paid early
Endorse: hand the bill on to your own supplier, in payment. Mint: split it into e-cash and spend it in any denomination. How e-cash works
Issue your first e-bill
Five steps, one app, no bank. Desktop, tablet and smartphone.