What is VeChain?
VeChain is a cryptocurrency that focuses on tracking items throughout a supply chain and as well as preventing inauthentic items from infiltrating those supply chains.
Supply chain management is a great and simple use case for blockchain technologies and software spending in the industry is on an upward trend. VeChain (VEN) is the largest player in the blockchain supply chain management space.
How does it work?
Blockchain offers a shared ledger that is validated in real time with each network participant. It enables equal visibility of activities and reveals where an asset is or was at any point in time. Blockchain integration ensures that a product comes from where a vendor says it comes from. A simple example would be to track the life of a designer bag. Want to buy an expensive bag but do not know if it is authentic? If a bag used a blockchain tracking device, one could see its entire history and ensure that the origin of the bag was indeed from a designer and not a fraud on the streets.
International Business Machines (IBM) stated that blockchain introduction to supply chain management will reduce or eliminate fraud, improve inventory management, minimize courier costs, reduce delays from paperwork, identify issues faster, and increase consumer and partner trust.
The four biggest crypto supply chain players right now are VeChain ($1.2B valuation), Walton, ($362M), Modum ($211M), Wabi ($202m). Each are focused on different industries within supply chain networks, but we think VeChain will continue to have the greatest impact.
What You Need to Know About VeChain
VeChain’s mission is to “Build a trust-free and distributed business ecosystem to enable transparent information flow, efficient collaboration, and high-speed value transferring.”
They will do this by adding a VeChain ID to products which will incorporate blockchain technology with Radio-Frequency-Identification (RFID) codes.
What is the VeChain token used for?
In short, the the token carries the value transfer function of the VeChain blockchain network. If one wanted to add information to the blockchain, they would have to use VeChain Tokens.
VeChain’s Industry Solutions
VeChain aims to enhance supply chain management in the following industries: Food Safety, Luxury Goods, Auto, Retail, Agriculture, Cold-Chain Logistics, and Logistics.
- Food Safety
The platform tracks and authenticates food supply chains at every step of their production process. It allows logistic providers and distributors to store relevant and unforgeable data before it reaches its destination. VeChain has worked with wineries to help customers authenticate the origin of their wine bottles. VeChain has already partnered with China’s largest importer of fine wines (Direct Imported Goods)
Appromiately $3 Billion of counterfeit wine was sold in 2015
VeChain also can help dairy companies by tracking their chain of their products. If any harmful food outbreak occurs, it will help isolate the source of the outbreak, which would make it easy for food distributors to cut off any outbreak before it magnifies.
- Luxury Goods
VeChain will collaborate with luxury brands and install encrypted chips in their products. The chip records the logistics of warehousing and transmission and after the customers get the product, they can scan the chip and know the history of the product. There will be no guessing about whether your designer bag or watch came from that designer. This will prevent the sales of fake goods, which VeChain claims costs retailers 10% of sales per year.
- Cold Chain Logistics
Smart sensors on transportation vehicles collect data such as temperature and humidity so that brands and consumers can easily trace the transportation condition of their goods.
The VeChain platform provides customers with better services and accurate logistics information about every individual product in the logistics chain. VeChain has a partnership with the world’s largest freight company, Kuehne & Nagel.
VeChain focuses on Chinese agriculture, which is facing a problem of scale of production, poor quality, insufficient safety measures, low productivity, and inappropriate use of fertilizer. VeChain partnered with PwC, China Unicom, and Liaoning Academy of Agricultural Sciences to record the functional data of every greenhouse. Their data collection will lead to improved planting methods, improve crop yields, and minimize the negative impacts of fertilizers. PwC is one of the biggest forces in the SCM industry and we believe that they will offer VeChain guidance that other competitors do not have access to.
VeChain creates a digital profile for each care based on its unique ID. It allows authorized workshops to update the status of repair or maintenance into a digital logbook (blockchain). Businesses and consumers will be able to follow a car throughout its lifecycle to trace its mileage and maintenance. With permission, this trustworthy information will be shared with insurers, banks, and other financial service providers to provide quick value assessments. VeChain’s partnership with Renault put them ahead of all other SCM cryptocurrencies trying to affect the auto industry.
Clothes with a VeChain ID will be able to tell a story about the product’s history and where it was manufactured. VeChain’s CEO has experience working with Louis Vuitton and VeChain also has a partnership with Chinese retailer, Ghostbaby.
The extent of VeChain’s partnerships are unclear there has been support for VeChain from the following organizations: PricewaterhouseCoopers (PwC), D.I.G. (Direct Imported Goods) – A wine importer, Renault, Kuehne+Nagel, China National Tobacco Corporation, Babyghost, China Unicom, MadeForGoods, Jiangsu Printed Electronics, Xiamen Innovation Information Technology, Healthre Co. LTD, BitOcean, Hubei Sanxin Cultural Medita ltd.
Putting supply chains on a blockchain seems like a good idea to prevent fraud but it is hard to determine VeChain’s progress with using VeChain to track items. BlockWolf is unsure about why granular items on a supply chain need to be on a public blockchain, but if the VeChain team can figure out a solution, VeChain could be a big coin. We do not like how VeChain may have mislead holders into believing that they had a partnership with BMW. We are exciting about VeChain but it seems very speculative.