VeChain: Blockchain Tracking of Luxury Goods
VeChain is a Chinese blockchain focusing on IoTs, supply chain management, digital IDs and the authentication of luxury goods. A year ago, it would have been impossible to tell if VeChain was a complete scam coin or the next Ethereum. Since then, major partners have come out of the woodworks including the National Chinese Governments, and VeChain is looking more like an undervalued altcoin and less like vaporware by the day.
What is VeChain (VEN)
The most publicised use case for the Vechain blockchain is a system used to track and authenticate luxury goods. Vechain aren’t just building a blockchain and waiting for companies to use their network. They are manufacturing IoTs sensors, tags and RFID devices which can be sewn in handbags or stuck to bottles of wine.
VeChain is solving a common customer problem and pain-point. Counterfeit goods cost the United States $29 billion to $41 billion annually, and if you have ever bought anything on eBay, you know that while you can take certain measures to ensure the authenticity of the item, there is always going to be some trust/risk involved.
Sensors and internet of things devices in particular have a strong use case with blockchain. A network is only as secure as its weakest node. The hacking of printers, RFID tags, smart devices and other IOTs devices, is a common problem. The blockchain is immutable. Entries are encrypted and final, and can’t be changed. Vechain plans to let these RFID sensor add transactions to the ledger, so they don’t require any human intervention.
RFID tags can also read data at a distance. Toll booths are a good example. Depending on the system, you can drive through a toll at the speed limit, and it will read your RFID and charge an account. Just to be clear, Vechain isn’t going to make toll readers, but it is a clear example of the accuracy of this kind of technology.
VeChain could use the technology to count a crate of wine bottles that can be pushed into a warehouse and forgotten about. Information about it would be verified hashed and written it into every new block.
Vechain Coin For Supply Chain Management
It isn’t just counterfeit goods that Vechain has chosen to focus on. Supply chain management and food transportation/storage are other areas that they have identified the blockchain could bring utility to.
Vechain are also heavily invested in building inhouse RFID technology and IoTs sensors. This is good for the Vechain blockchain network and price of Vechain because more applications should equate to quicker adoption, and worthwhile information for the consumer.
Recording temperature for perishable goods will save money on waste and help companies identify problems in logistics and supply chains. Boxmining has an example that I really like about transporting sushi. sushi needs to be kept at below 5 degrees to be considered safe to eat. What if, on the way to the supermarket or food court it heats up? The truck driver might even know that the fridge isn’t working, but if he/she drops it off and drives on to the next delivery it won’t ever come back to them, will it?
The Vechain mobile application is already available on the Apple store and Google store. This is the consumer’s side of Vechain. If you want to check the authenticity of an item in your possession. You could see things like who’s owned it? where it has been? and how frequently it was used? When you think about it, it is a little unnerving how many machines, people and floors our food must touch, and we know nothing about it.
Vechain’s Internet of Things Devices
“VeChain uses a mixture of blockchain technology and their own smart chip to track items throughout their lifecycle. The smart chip can be implemented in many different IoT items such as NFC chips, RFID trackers, or QR codes.”
The VeChain 3.0 chip is encrypted and each device creates its own private key for signing transactions similar to a hardware wallet. Each item, bag, bottle is linked to a one-time card/tag. If the card is broken or separated from the device it is no longer valid, but it further reinforces that idea that the chip is an inseparable part of the item, and they won’t be shared or copied to pass of fraudulent items.
VeChain are making a wide variety of sensors to add functionality to their network. They have environmental sensors that measure temperature/humidity/barometric pressure, inertial sensors for accelerometer/gyroscope/compass, gas sensors, and GPS/Glonass/Beidou positioning sensors.
Should I Invest In Vechain?
This is entirely my opinion, and I am in no way qualified or licensed to give financial advice, but I think Vechain is a seriously undervalued altcoin that has top 5 potential. Supply chain management and authenticating luxury goods might not sound like the most innovative use for blockchain technology, but these are otherwise unsolvable problems that are cost businesses billions.
But can we just focus on Vechain’s partners quickly? Rather than targeting merchants individually, Vechain went after supply chain management companies, and they formed partnerships with giants like Price Waterhouse Coopers, the largest professional services firm in the world, and DNV GL, a massive corporate supply chain company that would have all kinds of uses for Vechain.
The most significant partner of all is the Chinese National Government. They have committed to using Vechain tracking capabilities in the construction of an entire city.
“Due to the appropriate climate condition, and cheap electricity cost, Gui’an New Area has been mandated to become the National Data Center of the west. The New Area will heavily focus on high-tech industries including Big Data, Blockchain, Cloud Computing, and Smart Solutions. The New Area will house major data centers of industry leaders, for example, China Telecom has invested 7 billion RMB, China Mobile has invested 2 billion RMB, and China Unicom has invested 5 billion RMB in building their own data center inside Gui’an New Area. Microsoft and Apple have both invested over $1billion while IBM, Huawei, Tencent, Foxcom will be building significant data centers in Gui’an New Area as well.” National Level Partnership
Gui’an has been deemed a special economic zone. Like Shenzhen and Zhuhai which have quickly become some of the most important cities in China and, by extension, the world. Another interesting tidbit is that Gui’an is planned as a centre for wine growing in China. China is the world’s 5th largest wine consumer, but as much as 50% of the wine consumed domestically is fake an issue that Vechain is planning to address.
The Reddit page I got this from claims that the Vechain Board of Steering Committee is comprised of brilliant and respected individuals across a multitude of industries. Looking into the backgrounds of some of these team members, I can’t help but agree. There is enough talent involved in this project to build and launch their mainnet, and they are already building IoTs sensors and hardware.
Lu Yang (Sunny Lu), CEO, and Jie (Jay) Zhang, CFO, cofounded Vechain. Jie (Jay) Zhang has worked at 2 of the ‘Big 4’ accountancy firms – PwC and Deloitte’s and joined VeChain as leader of their Blockchain governance framework design and digital asset management framework. It’s beginning to make sense how this cryptocurrency is securing it partners, but I think, from an investor’s point of view, this is a good thing. The Asian markets have proved time and time again, that well connected corporate people have well connected corporate friends. Take tron for example. It is a coin that’s put a dollar value on Justin Sun’s ability to form partnerships.
In all seriousness they are a very talent team. It is like Reddit user Cryptori said, “less than 1% of businesses in the world can ever get this level advice none the less work from elite minds such as these on the board. Are these minds now working together on an emerging technology? Come on, this is big.”
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