On September 23, the US public will have some of its earliest tastes of Vechain – a blockchain company based in Shanghai. This will be done through the CNBC series "Advancements" with the presenter Ted Danson, while he will travel to Shanghai to outline the company and its work. You can read more about this here.
Those in the cryptographic space probably know Vechain – it's currency, VET (VEN-USD) (VEN was VET before a rebrand) currently the nineteenth most valuable cryptoasset on the market. Each VET token is exchanged for around one and a half cents; after the company made a 1: 100 token division to establish its new systems. But we'll talk later
The cryptographic market had its "bubble-pop" moment in 2018, seeing many coins exchange for just 5-10% of their high values of all time. With the "pop" many believe that some coins will go to zero. And with the reports that different currencies valued in millions do not have a functioning product, that makes sense.
But Vechain has a working product. It is a product that the company has been developing since 2014: a blockchain ledger that helps to record large-scale logistics for businesses. With an original focus on anti-counterfeiting, Vechain saw his idea of blockchain expand to insurance, automobiles, luxury goods and more. And it's used today – both with the physical RFID tags that the company has developed, and now in a recently announced partnership with BYD to work on a carbon credit system.
If the BYD name does not ring a bell, maybe it should. The company is a Chinese car manufacturer. But not just a car manufacturer. A car company with a battery manufacturer for vehicles with an estimated value of 27 billion dollars, supported by Buffett. Tesla's biggest one. The first producer of electric cars in the electric car market, supported by a government that wants to see it succeed in making the next big electronic vehicles of the world. That one. And Vechain is now his blockchain partner in a government-backed program to track the use of electric vehicles and provide rewards for carbon karma.
And that was just last week's announcement. The week before Vechain announced a partnership with People & # 39; s Insurance Company of China (PICC); one of the largest insurers and holders of $ 120 billion in assets. The goal is complex: to transform the insurance agency with the help of blockchain. Record immutable records, faster data transfers, etc. … Vechain can help with all this.
And those were only in September. Both of the above partnerships involve Vechain's partnership with DNV GL; the European logistics giant, in turn one of the largest companies in the world. This partnership was announced at the start of this year and saw the symbolic price of Vechain exploding at a market capitalization of over $ 6 billion (or about 7 times what it is now). Of course, this is the moment when the cryptography market was in crisis, so perhaps the news of a legitimate partnership like this; where a logistic blockchain company signs to help a logistics shop and track its entire fleet, perhaps it is lost in the uproar.
And these are just three of Vechain's partnerships. Others include the Chinese government itself, Renault, Kuehne and Nagel, Givenchy and others (longer list here and here). But there is another that is worth mentioning and that is PwC – the global giant of advisory and financial services. Vechain is a portfolio company in the PwC Asian office; and the two worked hand-in-hand during the last year to fulfill Vechain's promise for a blockchain-backed world.
Just as the crypto market suffers from the speculative bubble that fueled it in 2017 and at the beginning of 2018, Vechain continues to add partners and legitimacy.
VET Price and Investment
Vechian has partners. But why would you need the IFP? and how is an investment tool in this promising project?
The IFP operates as a resource linked to the Vechain blockchain. But unlike Bitcoin it is not a currency and unlike Ethereum it is not a way to "gas" the use of blockchain. Instead, the IFP is a token that creates value. Each VET creates a derived currency called THOR (VTHO), which works a bit like a dividend. The more VET you have, the more THOR is given to you (same wallet); and there are "knot" bonuses along the way to incentivize detention and accumulation. (In the financial report just published, the company reported that 65% of supplies are in the hands of VET holders).
Although it is not possible to know how much VET is currently in the nodes (some of which have lock-up rules that probably prevent holders of sell), estimates are more than 50%.
But THOR is the value-maker here (while the value is attributed to IFP itself). If holders of a VET can produce THOR for a reasonable ROI, they attract buyers and increase the price of VET. How to get to a ROI reason for THOR? Use of Blockchain.
That's why partnerships are so important. And because the size of companies is an important early indicator. Ultimately, what matters is the size of use of the blockchain of Vechain by the company, because every time the chai is used, THOR is required. This is the gas that keeps the blockchain going. The team has set a minimum of 21 THOR for each transaction, but it will probably increase. And if BYD or PICC want to use one thousand transactions a day to establish their data on the registry, they will need THOR. They can get THOR or (a) buying it from Vechain himself, which the team has hinted to restrict, (b) buy it on the market, which the team admitted will require them to modify THOR supplies to prevent it from swelling, or (c) buy the IFP to produce your own THOR. Options B and C should see the value increase of VET significantly and option A legitimizes the chain for future customers. All three seem a victory.
But we have not yet arrived. It will take months, maybe years, to convince these customers to use the blockchain at the levels where THOR will be "burnt" to millions (as it is produced every day). This means that the IFP is a speculative investment in the wake of these promising partnerships. And at a price that is really 20% of its maximum value, it seems like the most promising blockchain and crypto bet I've seen.
In what may be a reason why the IFP is undervalued at the moment, it is difficult to buy the criptoasset with fiat (national currency). You can see the IFP trading pairs here: the first fiat pair is Bitfinex which can be seen with a low volume. Most of the trading is done via Tether or Bitcoin. I think this gives the opportunity for VET to grow; as there is no volume or easy on-ramp (such as Coinbase) for USD coupling and again without KRW or CNY or JPY pairings. The same with the euro and the pound. (This could be for another article, but this means that VET prices are still tied to BTC and ETH and to the general market, which meant that when Vechain adds these partnerships in mid-2018, the currency has become cheaper).
can trade for the VET on Binance (recommended way) or one of the other markets listed in the link above.
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Disclosure: I am / we are long VEN-USD.
I wrote this article by myself, and expresses my own opinions I am not receiving any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose title is mentioned in this article.