VeChain and Direct Imported Goods – Partnership Analysis

Shanghai Waigaoqiao Direct Imported Goods sales centre Ltd. (DIG) is a wholly owned subsidiary of Shanghai Waigaoqiao Free Trade Zone Development Co., Ltd. Which aspires to build the largest distribution centre for imported goods in China. As it stands, 30% of all Wine imported into China comes through DIG.

According to Mordor Intelligence, the global Wine market is valued at $304bn and is expected to reach $380bn by 2022. China is expected to overtake the UK as the second most valuable wine market by 2020, with the category forecast to increase by over 40% between 2016 and 2020.

In 2016 China was the fourth biggest import market behind Germany (129.23 million 9-litre cases) the UK and the USA. In five years, it is expected to reach 94.46 million cases of imported wines, and with this, China will overtake the USA (85.76 million) and become the third biggest import market.

If DIG maintain their share of 30% of all imports into China, that represents a potential for up to 1.2 billion 70cl bottles of wine to pass through DIG in 2021 ((94,460,000 * 9) / 0.7), and if each of those is authenticated with a VeChain NFC chip, thats brings huge potential for the project.

How does VeChain work with Wine Distributors?

VeChain built the liquor tracing platform for DIG. From the overseas winery, the data of the products were written into the smart chip attached to the bottles, and recorded on the VeChain blockchain. Information such as logistics, sales will also be stored on the blockchain so the customers can simply scan the NFC smartchip to view the whole lifecycle of the product to verify the authenticity.

The chips are designed into labels/tags, which will be broken when the bottle is opened, preventing their reuse.

One of the bigger problems in China, and around the world, is the abundance of counterfeit Wine.

It is estimated that up to 30,000 bottles of counterfeit wine are sold per hour in China alone, and examples such as the sale of a supposed bottle of 1787 Chateau Lafite being sold for $157,000 at auction, that later turned out to be fake, could become a thing of the past with widespread adoption of the VeChain ecosystem.

Jeremy Oliver, an Australian wine critic was quoted by The Weekly Times saying he was told stories that the average bottle of Champagne in China is filled seven times. He estimates that 50% of wines retailing for $35 or more in China are bogus.

What does this mean for VeChain token holders?

We already know that corporate partners do not have access to tokens outside of the current exchange markets – there is no special token pool, and therefore it’s reasonable to expect that partners will be accumulating and stockpiling VEN tokens for future use already. With future demand and further partners, this additional constraint in supply will likely lead to an increased token price.

We also know that VEN tokens are fundamental to the usage of the platform – VEN will be spent pushing changes to the blockchain, and we know that around 25% of ‘spent’ tokens will be returning directly to VeChain, with 75% distributed to node-holders. Again, another constraint point in the supply.

VeChain – Cryptocurrency Project

I’ve been actively involved in CryptoCurrency since the Summer of 2017 – I’ve not published any new content on my blog for some time, I figure cryptocurrency is the direction this blog is headed!

Today, I want to write a little about one of the most promising cryptocurrency projects I’ve come across – VeChain.

VeChain is a blockchain project focusing on authenticity and traceability of various types of products throughout their lifecycle, from production, supply chain to end user. The literal translation of their Chinese name to English is ‘Only Chain’ – and that’s quite apt because the platform can be used to solve a lot of real-world problems, for a number of different verticals.

Formed in 2015 in Singapore, VeChain aim to create greater transparency and trust through all parts of their interaction, and streamline information flows across various participants in the supply chain.

They are already an accomplished blockchain business, with successful projects and proof-of-concepts delivered to a number of global brands, including car manufacturer Renault, fashion brand BabyGhost, Direct Imported Goods (DIG), the largest importer of fine wines in China, and global shipping and logistics company Keuhne+Nagel – they are supported by one of the world’s leading accountancy firms, PriceWaterhouseCoopers (PwC) through becoming part of their incubation programme in 2017 and aim to expand their deployment across South East Asia.

The VEN token sits in a fundamental position to the success of the platform, it is required to interact with the blockchain, adding, updating and removing products, their movements, history and even environmental data throughout the chain. VEN tokens are only available on Cryptocurrency exchanges, and all partners will be required to purchase tokens for their use through these channels.

Current projects being worked on for VeChain include providing a means of proving authenticity of high-end goods for a Luxury French Fashion Brand, and further to the successful proof-of-concept with Renault and Viseo, discussions are under way with a currently unnamed German car manufacturer with respect to a potential partnership.

This may be the first article about VeChain, but I doubt very much it will be the last!

What is ZenCash?

If you were to trace ZenCash back to it’s roots, you would find Bitcoin – the most dominant of all cryptocurrencies. ZenCash has a strong focus on privacy – introducing a number of improvements on the the predecessors that came before it (ZCash, ZClassic and ultimately Bitcoin). ZenCash focuses on security and anonymity, with functionality for not only private transactions, but equally secure messaging and secure publishing.

It stated recently that it believes itself to be ‘the most secure messaging platform in the world’ using zk-SNARK shielded transactions and encrypted memos. Of course private messaging is just one of the core functionalities of ZenCash.

There were two compelling reasons for me to like ZenCash

Firstly, ZENCASH can be mined – mining is a term for providing compute power to solve complex mathematical equations with a view to earning cryptocurrency as a reward. ZENCASH in this respect offers a Proof of Work reward using the Equihash algorithm. ZENCASH is ASIC resistant and can be mined using consumer GPUs such as NVIDIA’s GTX 1070 and AMD’s RX480.

ASIC miners are specialised devices programmed to serve a specific purpose – the problem with ASIC based mining, is that generally these units are pricey, extremely powerful, and found in ‘mining farms’ – this is not within the spirit of true decentralisation, and, with BTC for example, this means that hashpower is actually controlled and manipulated by those mining your coin – miners get a huge say in the governance of Bitcoin because of this.

The second reason I like ZenCash so much is Secure Nodes – these are servers that provide infrastructure to the blockchain – they hold a copy of the entire blockchain, they process transactions and they provide consensus to ensure that a transaction can be fully validated.

Masternodes exist across a number of coins, they provide a residual income for investors, in return for processing transactions on their network and making available the necessary funds to validate your entitlement to provide a node to the network, so can be an attractive means for an investor to generate passive income. Zen’s Secure Nodes introduce encryption on node to node communications.

Masternodes are traditionally out-of-reach to the ordinary investor, DASH for example, requires you to stake 1000 DASH, which has a value today of £430,000. At the time I first invested in Zen, the 42 ZEN requirement for hosting a secure node, would require an investment of around £790 today.

Having a large number of Secure Nodes in operation is crucial to the long term success of the project, as it’s the only way to ensure that the true decentralised nature of cryptocurrency is enforced – it provides global resilience, and supports personal privacy.

ZenCash is another project on my radar that I’m sure you’ll be hearing more about from me!

Copyright © James Coleman-Powell, 2016