VeChain: A Blockchain Solution for Counterfeits and Fakes?
If you live in a developed part of the world, you may not be aware that counterfeit alcohol is a serious and potentially deadly problem that is prevalent across the globe. Usually what happens is a criminal organization will make a product that looks identical to a well-known alcohol brand.
Then, they will fill the bottles with cheap grain alcohol or other potentially dangerous substances like "ethylene glycol, which is antifreeze, methanol, which can cause blindness, and isopropyl alcohol."
These products are then sold in parts of the world that have poor or inconsistent supply chain tracking mechanisms. Or where government oversight of these products is insufficient.
The profit potential of counterfeit alcohol can be incredible. This is because the cost of producing it is next to nothing, and as the counterfeit will hijack a well-known brand, no expenditure is needed on marketing or advertising. The end result of this is two-fold.
First, many consumers can become sick or even die from drinking dangerous amounts of unsafe chemicals. Speaking to The Guardian, Dr. Bernhard Schwartlander of the WHO said:
Where counterfeit alcohol is made from poor quality ingredients or toxic industrial chemicals, consuming it could lead to serious acute illness or worse in the short term, and potentially a host of medium and longer-term health problems.
Second, consumers trust in the brand can drop because they have no way of knowing which products on the shelf are real, and which are counterfeit. This damage to a brand is difficulty to quantify.
Fighting the Counterfeiters
Some solutions have been proposed for this, such as including QR codes on the bottles. Scanning the code should then ideally present the consumer with a site demonstrating the authenticity of the product.
However, as these systems are quite new and easy to fake, it’s not much trouble for the producer of a fake product to print a QR code that links to a fake website that claims the product is legitimate.
It is clear that an alternative solution is required. This applies not only to alcohol, but any number of goods that could be subject to counterfeiting, improper storage, or any number of issues that are prevalent in different parts of the world.
VeChain Offers a Blockchain Solution
VeChain, a Singapore-based company that runs the VeChain foundation has created its own solution to this problem using the power of blockchain technology in supply chains. The goal is to use a blockchain to track products at every step of the production and sales process. At each step, shipments are tracked on the blockchain and this information is made available to anyone.
For example, if you want to buy a bottle of a name brand whiskey, the bottle's packaging could include information that would link you to exactly every step of the process of how that bottle ended up in your hands.
It could show you where it was made and on what date it was bottled, it could show you where it was first sent to such as a warehouse. Then it could then show you which wholesaler bought it, and then who that wholesaler sold it to and where it was stored and for how long.
Finally, it could show you at what point it arrived at the store where you intend to buy it from. It is even possible that once you buy it, that information could be stored on the blockchain as well.
Luxury Goods As a Use Case
When it comes to luxury goods like handbags or watches, it is even possible that the complete lifecycle of the product could be tracked on the blockchain. Such as when a customer buys it, and then sells it or trades it in at another second-hand shop. Or perhaps even when sold to another person depending on how the chain works when it is fully operational.
This information could become absolutely invaluable in parts of the world where this information is simply nonexistent.
Since this information could be stored on a unified platform, it would not be possible for criminals to simply make a false database that could trick not only consumers but retailers that purchase the goods.
The Technology of VeChain
VeChain is designed to operate on Ethereum and it’s powered by its own token called the VET (or VEN, more on that later).
The tokens which are available on the market now, the VEN (given an upcoming rebrand) are currently trading at just under five dollars each. They were trading for quite a long time at around $0.50 each. But at the end of December, prices took off to an all-time high of $6.80.
Following the recent slump, tokens are now trading at $4.50. There is it currently a total circulating supply of 277 million tokens. VeChain can be bought on a number of exchanges including Binance, BitMart and HTX (Previously Huobi).
Once you have your VeChain you will need to make sure that you keep them in secure storage. It is not wise to keep your tokens on an exchange given the risks that come from hacks and the like. We have covered some of the best VeChain wallets on the market.
According to a post on the official VeChain medium page, the company is undergoing a rebrand of sorts. Part of the rebrand includes the finalized establishment of the team that will oversee the nonprofit VeChain organization.
Additionally, those who hold at least 10,000 tokens will be entitled to one vote on issues that the foundation puts up for voting. The name of the chain is now being changed to "VeChain Thor Blockchain", and the existing VEN tokens will be exchanged for VET.
Additionally, as part of the rebrand, VET tokens will not be used as a blockchain expense. The chain is also shifting to what they are calling "proof of authority" as it’s consensus mechanism, and it will have masternodes as part of it. The rebrand document itself is long enough to be a short novel, so if you would like to check the rest of the details, we recommend you look at the rebrand page on medium.
Conclusions and looking forward
So will VeChain become an important component of logistics and tracking in the future?
If it plays it’s cards right, then VeChain could become an important component of luxury products, alcohol, food, and other use cases in the developing world. These could also become important for retailers in the developed world, but it is less likely to be necessary for areas where developed and well-tracked logistics exists already.
However, given the current state of logistics in the world, there is certainly a lot of growth that could be seen. Therefore we could see larger amounts of adoption in the intervening years. It is unlikely, however, that VeChain will see a rapid adoption in the next 12 to 24 months.
More likely, it would be at least several years until a significant number of players are using the chain. This, however, is not a problem, and may, in fact, be a great opportunity for those who get involved early.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.