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VeChain appears to have confused its website with a Michael Bay film made out of Flash. More practically, the company uses blockchain to create a public supply chain management solution. By tracking packages or even individual components with RFID tags, then logging the tracked products on a public ledger, VeChain allows users to monitor a product’s journey from source to customer.
The idea of networked supply chain management isn’t new. Anyone who has tracked a package with Federal Express will have a basic concept of what VeChain is trying to do. However, between their ID chip hardware solution and their secured public ledger, the project is trying to do this in a better, more sophisticated, more secure way than any other option on the market.
The Problem and Solution
As a threshold matter, the VeChain website truly is a problem. Anyone interested in this project can find its main site here, at which point they will be treated to futuristic graphics and a series of movie clips that resemble a film trailer. What the website will not do is tell you what, exactly, the VeChain project is.
Scrolling down, the first section of the site doesn’t do that either, settling for a brief smattering of text that says the project “aims to connect blockchain technology to the real world” in a manner that involves “IoT integration, and pioneers in real-world applications.” This problem continues, and it is virtually feature-breaking. Anyone who wishes to learn what VeChain is and does must eventually either find a third-party website or look up the project’s technical document here. (Readers should note, however, that even the technical document is heavy on ambition and sparse on details.)
That aside, the VeChain team would like to solve the problem of modern supply chains.
Modern production, whether it involves pharmaceuticals, manufacturing, textiles, or virtually any other consumer product, generally involves an enormous number of transaction points. A producer will order components, ship them to be assembled, ship the finished product to be sold at retail and then (often) ship the sold product to the end customer. This involves an enormous number of opportunities for error, and the inefficiencies (along with consequent real costs) of such a system are high.
Making matters worse, a single error at any point in the system will transfer down the line. If one factory or shipping agent makes a mistake or mislabels a product, that incorrect information will be recorded by every future transaction, meaning that the supply chain is only as strong as its weakest link.
VeChain would like to make supply chains in the modern economy simple by giving one overarching authority to any given transaction. For a given widget, no matter how many hands it passes through the widget will have a public ledger and an RFID confirming what it is, where it came from, and where it’s been. Everyone can look this information up, and no one will have to worry about a weak link in the supply chain.
A single shipping agent can’t make a mistake, because the system will log and record the product publicly. Per the project’s technical document:
"[A] classic business collaborative mode includes supply chain (as the graphic shows below), brand, manufacturer, distributed retailer, consumer, and regulator. All the parties share the same goal: to achieve the same value of improving the life quality of the consumer. However, even if the different enterprises worked together for the same goal, due to the lack of sufficient trust guarantee, the cooperation is still on a peer-to-peer manner and with traditional communication tools, and the data exchange will be very inefficient and expensive."
Many outlets have named this the “Ethereum of business,” and that’s essentially the model that VeChain has in mind. They would like to create trust through a self-executing public ledger. Trust by receivers that they have gotten exactly what they ordered. Trust by downstream parties that all of their downstream information is accurate. Trust by vendors that their customers won’t complain about a missing order.
VeChain isn’t the first project to think of this idea. In fact, numerous banks have proposed similar public ledger-based solutions to track their assets around the world. They would, however, like to be the main project behind this idea.
VeChain is a Singapore-based project with some very high profile names behind it, which makes the lack of professionalism in the presentation and documentation all the more puzzling.
CEO Sunny Lu comes from a background with both Luis Vitton and Bacardi, two brands which not only connote professional accomplishment on Lu’s part but also indicate his depth of experience in the retail and product movement space. Chief Financial Officer Jie Zhang comes from a similarly credentialed background, claiming consulting powerhouses Deloitte and PWC as his prior employment.
It is impossible to ignore the sheer credentials of VeChain’s two chief officers. Both Lu and Zhang understand what it takes to make a business work and have operated at extremely high levels. Their resumes alone make VeChain at least worthy of attention.
VeChain relies on the VeChain Token (VET). It is important to note that the VET is not the blockchain to which VeChain will record its product tracking information. This record system will exist on an enterprise platform built around blockchain and distributed ledgers, but it is not the VET token.
VeChain’s token is a funding and financing token, similar to that of many other blockchain startups. End users will be able to use it to purchase products and services, per the project’s technical document, just as VeChain will use its VET as a node reward and to encourage application development for its enterprise system. The project anticipates selling approximately 70 percent of the total number of VET tokens to third parties, retaining the remaining 30 percent to pay for the costs of operation.
The VeChain Token should not be confused with the project’s prior VEN token. VET has fully replaced VEN.
VeChain maintains three main social media channels. Its Twitter account is updated regularly, with posts appearing every few days at least. The content is informative, typically focusing on product announcements and links to the project’s documentation.
Medium and Reddit are the project’s other two main community channels. VeChain communicates best through Medium, where it has posted both technical documents and points of contact from the leadership. The Medium site is regularly updated and contains updates, clarifications, and open letters from Lu.
It is impossible to ignore the florid language of VeChain’s documents and website. Their vagueness is troubling. Rather than describe the project and its cryptocurrency in clear, discrete terms, VeChain prefers to talk about (for example) how its token is the “blood” to the “body” of the business ecosystem. What’s more, it has a website that relies on elaborate animations in place of actual information.
VeChain can only be purchased with Ethereum and can be purchased on many mainstream cryptocurrency exchanges.
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Bitcoin Market Journal analyst briefing for VeChain.
Questions and Answers
Why is VeChain such a big deal?
VeChain has become very highly publicized in many parts of the blockchain community. This is in no small part because it is a relatively rare project that is trying to build non-electronic infrastructure based on blockchain technology.
Is VET the same as VEN?
VeChain has replaced its token. VET is the new token, while VEN is the old one.
What is the purpose of the VET?
To participate in the VeChain product tracking system.
How do I buy VET?
The VeChain Token is purchased with Etherium on common exchanges.