Vechain Investment Overall Score: B
VECHAIN GROWTH POTENTIAL: A
VECHAIN SUSTAINABILITY SCORE: B-
VECHAIN BRAINS BEHIND CURRENCY: B
Vechain (VEN) recently broke into the top 25 market cap of traded cryptocurrencies. The popular altcoin is built to fix inefficiencies within our everyday life and solve our antiquated processes when it comes to business.
Business communication, data security, trade secrets, and other aspects of business have not changed. We still use fax machines to securely send vital documents. It's still not unheard of to have a non-disclosure agreement or red line plan take weeks.
Vechain plans to change all of that. They're going to do it by using blockchain technology.
By leveraging methods pioneered by cryptocurrencies before it, Vechain plans to disrupt any process that requires a supply chain and reintegrate them through Vechain's blockchain interface.
Vechain currently sits around $3.70 per unit. The coin sat below $100 Million in coin market cap until December 2017 when it began to see a steep and steady increase. In January, the crypto coin sat at $2.6 Billion which remains a lifetime high. It currently sits around $1.6-$2 Billion in market cap and has recently seen headwinds around trading volumes.
How VEN Works
Vechain labels basic business function under a blanket term: supply chain management. By utilizing blockchain technology, it establishes new methods that increase trust in sharing information with one another. Vechain aims to establish a seamless information flow that utilizes blockchain logic to enhance our day to day business development activities.
Vechain explains in their whitepaper that businesses have three separate sections of information. These can be labeled as Public data, private data, and permitted data share.
Public data is available to the public and is likely posted on a website or pamphlet. Private data normally lives behind safeguarded company servers that use heavy encryption. Permissible shared data typically uses a non-disclosure agreement and can be a pain to execute.
Essentially all these levels of data need to be streamlined into one place despite acting very differently. This is where Vechain sees its value.
Each bit of information has its specific set of functionality and rhythm. By using blockchain, it is possible to collect data, centralize maintenance, and streamline payments and data sharing processes without endless email communication and confusion.
Vechain covers more than just internal business practices. It’s important to remember that businesses often have thousands of functions happening at once. Not only do companies have to oversee efficiency over their own staff, they also have independent contractors and partner companies that must be paid.
That’s a lot of different specifications to deal with. Specifications without innovation is just another way of saying “this takes a lot of time.” That could all potentially change if VEN can do what its been hyped to do.
Who is Sonny Lu?
Sunny Lu is no stranger to the spotlight and no stranger to internet technology. Lu owns a bachelor’s degree in Electronics and Communications Engineering from the highly esteemed Chinese University Shanghai Jiaotong. He then went on to scale the heck out of an international business. Have you heard of Louis Vuitton?
Sonny Lu was the Chief Information Officer of Louis Vuitton’s China team and built a massive technical footprint over his twelve years on the job. He oversaw the construction of the point of service and helped connect over 65 unique locations spread across the country.
It is perhaps at Louis Vuitton where Sunny Lu gained interest over business functions. It’s likely that he began realizing some of the issues that come with B2B setups given the scale of the company he worked for.
Louis Vuitton is known for owning licensing for thousands of products as well as owning image and intellectual property. When they deal with partnerships, it likely comes with a lot of red tape. This is where Vechain came into play.
It is well documented that Lu’s go to market strategy includes Luxury retailers as early adopters. He hopes that they along with Alcohol, Agriculture, and Automobile supply chain services will prove the concept on Vechain. He is aiming at a few top brands for the initial wave and then hopes to target different channels within industries using good will and references. Perhaps Louis Vuitton will be one of the early adopters of the technology because of Lu’s background there.
Over the upcoming years, Lu hopes to expand Vechain’s partnership line to over 100 different partners worldwide. By leveraging blockchain, Lu also hopes to obtain the business support and revenue to build Vechain’s annual business to over $1BN.
$1BN is certainly an ambitious number, but with the right partners…who knows with this one?
Vechain is not unlike many of the cryptocurrencies we feature on our site. It has been popularized on Reddit where there is a wide array of discussion on innovations and happenings around the currency.
Supporters of Vechain would tell you that not only is Vechain going to change FinTech, it’s going to change everything. That includes automotive and luxury technologies as well as other things we use daily.
We find reasons to be excited about the concept, but until we get full deployment, we won’t know for certain what VEN can be.
Vechain has some strong partnerships that legitimize its offering and make it investment worthy.
PricewaterhouseCoopers (PwC) is a global name in professional services and provides auditing and consulting capabilities. PwC is helping VEN accelerate its development by leveraging PwC’s global network of connections. This includes connections to South East Asia and Hong Kong that Vechain needs to be successful in Asian Markets.
DNV GL partnered with Vechain in what could be the proof of concept that is needed. DNV GL is accredited for serving the oil, gas, and food industries in Asia. Their efforts have helped connect Lu with an annonymous convenience store franchise that has 24,000 locations. They will be leveraging what Vechain calls cold-chain logistics. With success, adoption of Vechain could quickly rise.
China Unicom is also on board. With revenue numbers exceeding $274 Billion in 2016, China Unicom puts into perspective the 1BN in revenue that Lu is seeking. It’s relatively a drop in the bucket to some of the larger partners. China Unicom hopes to leverage VEN to improve efficiencies around their supply chain management.
When we look at the skeleton of Vechain, the concept is one that makes sense. We are completely burdened by red tape, signatures, copies, and redlines that could easily be streamlined by something as full proof as Blockchain if deployed correctly.
If any of these partnerships are successful, Vechain will see sizable increases in price. It’s operating in a sector of its own on the cryptocurrency front. This is one of the reasons for its quick rise.
Don’t get this twisted. Sonny Lu is not a “hater” of his own product. He does admit that there are constraints to how quickly he can achieve full consensus on the right deployment and curation of blockchain technology.
Lu is concerned about getting it right. He should be. That’s one of the reasons the network isn’t optimal yet. When producing a great product, getting the distribution and technology behind it right is critical. There are many ways to approach blockchain. It’s so new.
Lu is transparent about it. He doesn’t want to make a mistake. But that means he COULD make a mistake. Those who are short Vechain are quick to take aim at this and it makes it tougher to invest if you don’t trust Lu as a professional.
There are also concerns with the recent pump and dump claims that have plagued the coin’s value as of late. There have been massive sell walls on Binance for Vechain. Many have speculated that Vechain is selling off large blocks of the currency so that it can maintain it’s low price. This is a clear form of manipulation.
Vechain has puplicly denied having any part in the sell blocks. If that’s the case, we speculate that market makers have acquired enough coin to manage the markets waves for ultimate profit. This is tough for the long-term investor and better for the swing traders. We’re not a swing trading site, so we’ll stay away from that.
Vechain also recently apologized on its Twitter account for announcing a partnership with Oxford University. It claims to have done so prematurely. This has also caused a recent sell off to the stock.
Vechain is a tough one to make a call on. The recent news around stock manipulation makes us want to run for the hills, but the value behind the currency is also there. If Vechain is able to sustain through the market they are currently in and prove their concept without adding further sell off blood shed, they could see themselves ascent into the top ten coin market cap and beyond. They may even compete with Bitcoin one day on value.
It’s still a big if. If you can change infrastructure. If you can change FinTech. If you can change Automotive. If you do all that Vechain, we guarantee you will be worth a lot more than you are now.
To invest in VEN, you must first deposit to Coinbase or Coinmama and make a transfer of Bitcoin or Ethereum to a Binance account where more altcoins are supported. For more information, please read our article on how to transfer from Coinbase to Binance.
Thanks for reading and happy investing!