VeChain is a relatively new cryptocurrency, having grown over 100% from October 2017 to January 2018. VeChain is a Chinese based company that uses blockchain as a service to provide end-to-end supply chain management for businesses. The company already has strategic partnerships with luxury goods manufacturers in China in the markets of wine, agriculture, pharmaceuticals, logistics, and government.
VeChain is one of the few blockchain companies with a token listed on major exchanges that has a viable working product, that does what its website claims it can do. VeChain is present in a country that has been notoriously skeptical of cryptocurrency. China has historically placed regulations on new technologies that threaten the status quo, having banned many new crypto practices such as ICO’s.
But, through their ability to directly help the government with their technology through business partnerships, they have been able to maintain a steady relationship and continue their operations without scrutiny. Using VeChain technology, businesses can utilize an immutable, distributed ledger in combination with RFID tags and QR codes to track items throughout the supply chain, ensure the origin of product supply, and check the authenticity and quality of goods.
VeChain Value, Market Cap and Volume
From late 2017 into 2018, VeChain has maintained a healthy market cap and daily trading volume, that has continously held its place in the top 50 cryptocurrencies. VeChain has continuously held a strong place in the market since its inception, and has experienced steady growth due to its consistent strategic partnership announcements as well as their well functioning product. VeChain has been one of the strongest and most hyped tokens of 2018.
The team at VeChain is run by some very prominent and successful Chinese entrepreneurs. The CEO and founder, Sunny Lu, is the ex-CIO of Louis Vuitton China and has a wealth of experience in the IT and information security sectors of luxury brands. The company branched off from a firm called BitSe, one of the first projects aimed at researching blockchain technology. They were the pioneers of chip and mining rig designs in China.
Understanding VeChain and VEN
Soon to be rebranded as VET, the VeChain network describes itself as “a trust-free and distributed business ecosystem to enable transparent information flow, efficient collaboration, and high speed value transferring.” VeChain is special due to their self-manufactured smart chips that help companies track products through the entire lifecycle of its trip through the supply chain. This makes VeChain a competitor in the IoT market that includes other crypto giants such as IOTA and Walton Chain.
Tracking and ensuring trust and authenticity in supply chains of various kinds is a very important industry, and it is currently suffering from massive losses and widespread fraud. In 2017 alone, over $400 billion worth of counterfeit items were bought and sold. Popular luxury brands such as Louis Vuitton and Gucci suffer massively from these counterfeit items. VeChain offers a way for both buyers and sellers to ensure that the product is real, being purchased by an accredited seller and coming from an accredited manufacturer.
VeChain’s process ensures that every time a good is transferred to the next stage in the supply chain, it is guaranteed authentic. They are entering a market with a massive demand for its product.
Supply Chains and Logistics
Supply chains, particularly international ones, are complex and require a large array of management tools and data tracking methods to ensure authenticity. Currently, supply chains are easily infiltrated by scammers due to the ease in which false information can be entered into the system by malicious parties. The VeChain system eradicates this event from being able to occur through the use of smart chips, QR codes, and other means of digitally verifying information via cryptographic encryption.
Each time a product changes hands, its chip is scanned and the information on its complete history is displayed to the user. If the full history is not included with it, it will not be accepted. The immutable ledger that this information is stored on eliminates the need for parties to trust each other, as the information and tracking data associated with the product is king.
Logistics systems currently are not wholly efficient for businesses, and turn simple business transactions into complex processes that require manual data entry and trust in a few people to accurately carry out these steps. When transferring between borders and markets, the red tape and data management aspect can be a nightmare for brick and mortar businesses.
VeChain’s process allows for businesses to simply scan the QR code or connect their app that is synced with the smart chips to verify the authenticity and origin of items. This massively reduces overhead and resources spent on logistics.
VeChain and Competitors
With such a large potential market that needs this type of technology, there is bound to be competitors. The prominent competitors in the space include WaltonChain and the IPFS, or Interplanetary File System. Walton Chain is aiming to be a major player in the pending “chipping” of most objects in the world, known as the IoT craze. They created an aspect of their technology called “child chains” to help bridge blockchains and allow fast and efficient data transfer between any of them, similar to the side chain protocols being researched by Ethereum and Bitcoin.
They have also announced some major partners in multiple business industries. VeChain seems to be aligned with more luxury goods companies, while WaltonChain is allied with more widespread consumer-driven businesses such as plastics and electronics.
IPFS describes itself as the distributed web. IPFS allows for a similar means of tracking information, but they are targeting the internet itself. They are doing this by giving each file or piece of data stored within the blockchain platform a unique fingerprint that make its source and surrounding data immutable. IPFS seems to be targeting a much larger use case and is less concerned about partnerships with general supply chain businesses. The IPFS is a long standing company that has plans to infiltrate the creative markets such as YouTube and Instagram as well the various business sectors that blockchain can assist.
Future of VeChain and VeChain Thor
VeChain is a very promising project due to the fact that their viable product is already being used successfully today. It has even proven its scaling and efficiency claims, something many similar blockchain-based projects cannot claim. VeChain has solidified itself as a real superpower in the IoT and blockchain-as-a-service sector due to their success in the real world, helping businesses greatly increase efficiency within their supply chains.
VeChain is taking this momentum and using it to evolve further into a dApp platform similar to Ethereum or Cardano. They are calling this new version VeChain Thor, and it is simply using their existing technology to help solve problems presented by current planned dApp ecosystem platforms.
This move will take VeChain from being simply a supply chain management tool to being a enterprise dApp solutions protocol. Unlike other platforms, Thor will use two tokens: the Thor token and Thor Power token. In addition, their coin will also be rebranded to the “VET” token.
The new Thor system relies nodes to maintain the planned ecosystem. Each of these nodes will be rewarded in Thor tokens regardless of the amount of value they hold. The unique aspect here is that VeChain created multiple types of nodes, each of which plays a role in maintaining the network and is rewarded accordingly. Similar to NEO, this provides users with Thor power to be used to power the smart contracts they will be using.
Overall, VeChain is an ambitious project that aims to be a leading blockchain-as-a-service (BaaS) platform for both commerce and dApp economies. With stiff competition from the likes of Ethereum, NEO, Cardano, Walton Chain, and IPFS, they have a tough road ahead to prove their dominance. But, with partnerships as well as a working product in circulation, they certainly have a much better chance at achieving their goals. VeChain’s leadership, well-functioning blockchain, and scalable solutions make it a big player for 2018 and beyond.