Blockchain and Logistics – its most promising use case? An overview of upcoming projects including Shipchain.io, VeChain, Waltonchain, Ambrosus, Modum and SophiaTX.

When firms across the globe first starting hearing about blockchain technology for integration with logistics systems, the association was with bitcoin – as a payment processor, rather than the underlying disruptive technology that could reduce costs and complexity for carriers. Once the education piece had been completed with stakeholders, it was quickly understood how logistics firms could leverage blockchain to their advantage.

There was a fantastic article from the NYT published back in March, that effectively boils down as to why blockchain can have such an impact in logistics:

At its heart, blockchain simply refers to a bookkeeping method that “chains” together entries so that they are very difficult to modify later. It provides a way for large groups of unrelated companies to jointly keep a secure and reliable record of their transactions.

Nathaniel Popper and Steve Lohr, the author of the article gives the example that a single container being shipped could require approvals and stamps from up to 30 people or authorities. These could include tax revenue authorities, national shipping and public health bodies.

We know Disney first started exploring blockchain back in 2014, and so did IBM with their Blue Coin project, that eventually become Openchain. The director of research at IBM Arvind Krishna openly admits it took him a fair bit of convincing to even properly look at the technology.

“That was the ‘aha’ for me,” Mr. Krishna said. “This was not really about digital payments, but establishing trust in transactions in general.” He called it “a technology that can change the world.”

We know now firms across the globe are heavily exploring blockchain, and IBM alone has 650 employee working on it, and they have 400 clients testing their products – one of those being Walmart. One of the largest providers of enterprise software SAP, has launched its Leonardo project to utilise blockchain, and set in it three key use cases on which to focus its efforts on. SAP asset intelligence, SAP distrusted manufacturing and SAP transportation management.

SAP is also a member of the Blockchain in Transport Alliance, who’s mission is to engage in education the transport industry, to bring about extracting the full potential of benefits that blockchain technology promises. Some of the key members of this alliance include UPS, McLeod software, FedEx, Penske, TMW systems, Convoy, and Bridgestone. Clearly, we can see large, multinational companies are taking blockchain seriously and developing systems. What will be covered now are those smaller firms based in crypto that have raised funds via ICOs, who can help to facilitate those companies seeking to integrate blockchain with their logistics systems.

VeChain $VEN

vechain

VeChain has recently come to the attention of many as they have started being a bit more public with announcements, but it’s actually a bit of a slow burning project. The VeChain tech was designed back in the second quarter of 2015, and since then the team have built upon several smart contract templates, and their own custom hardware.

From a Medium post by the VeChain Team

VeChain has developed a powerful blockchain-enabled enterprise software platform. The VeChain platform enables manufacturers to assign products with unique identities, which then allow manufacturers, supply chain partners and even consumers to interact with the product through the platform. It uses blockchain technology to ensure the security of the data collected, allocating private keys to all participants within the supply chain.

These IDs are stored on the blockchain, and physically put on the product with a NFC chip, QR code, or like WTC/Modum – a RFID tag. During further manufacturing of the unfinished product, or shipping with a carrier, or arriving at a retail location the ID can be interacted with and data updated on the blockchain.

One of China’s largest importer of fine wines (Direct Imported Goods) have already placed one million bottles of wine on VeChain’s platform in an effort to counter the import of fake wine. This could further be applied to other luxury or high spec goods that are often counterfeited.

In an important step for the company, VeChain recently became the first firm to pass PriceWaterhouseCooper’s Cryptocurrency Disaster Recovery Plan

VeChain spearheaded the first Cryptocurrency Disaster Recovery Plan (CDRP) that meets the demands of accredited firms and approved by PwC. This is the first of its kind in the world and sets a standard for corporate level DRP and risk management of internal or external controls on blockchain solution and cryptocurrency assets both on digital and physical wallets.

While this fantastic press, it’s important to note VeChain were part of PwC’s incubation program back in May 2017, and have had their resources and research at their disposal. It’s pretty easy to pass a set of standards with a firm you have been working with for close to a year. Jay Zhang, the finance director for VeChain was also a senior manager at PwC. According to their ideas of development VeChain have also been working with PwC and the Liaoning Academy of Agricultural Sciences to develop a blockchain cloud project that is for the verification of organic agricultural projects. While I can appreciate the plan, it’s pretty easy to create positive press with this kind of clearly long term partnership.

You can buy VeChain $VEN at Binance and KuCoin.

shipchain.io

shipchain airdrop

Imagine a fully integrated system across the entire supply chain–from the moment it leaves the factory, field, or farm–to delivering the finished product to the customer’s doorstep; federated in trustless, transparent blockchain contracts.

Shipchain seeks to utilise the Ethereum blockchain, using a side-chain to track geographic waypoints across smart contracts. These waypoints will be encrypted so only involved parties can access the data, but still retaining the benefits of an immutable blockchain. This allows better communication across the supply chain for customers, carriers and creators.

As detailed in the whitepaper, Shipchain is looking to address the following issues in the shipping market:

  • Bad tracking for end users
  • Lack of transparency
  • Poor accountability across the supply chain
  • Freight broker markup
  • Misaligned incentives, especially for carriers at the tail end of the chain.

The team is led by CEO John Monarch, the founder of Direct Outbound, which is currently one of the fastest growing 3PL companies in the US. Roger Crook the Global Head of Sales and e-Commerce at DHL Global Forwarding takes the Chief Strategy Office role. One of the more noted advisers is Al Pettenato, a former VP of XPO logistics and Senior VP of North America for DHL. A fairly strong team looking at the experience listed.

The ownership of the $SHIP token will bestow membership to the token holder, and will grant access to the blockchain for booking freight and tracking shipments. These transactions on the blockchain for shipments will be paid, and settled in tokens, giving a high utility factor to the token. Interestingly, there is also an incentive for the carriers at the end of the supply chain –

Tokens valued at up to 20% of each freight transaction will be given to the driver/carrier as “gamified” incentives for safe and timely deliveries, as well as environment focused such as reduced idle time. From there, drivers will either be able to sell their tokens on exchanges, or redeem those tokens via partnerships ShipChain will form for various rewards, such as gift cards, fuel discounts, and more. Q2 2018 will see the first integration with government-mandated ELD devices.

The Shipchain ICO has closed, but an airdrop is currently available at time of publish to members of their telegram group, link is here to their official site. Please check URLs, and remember to never give out your private key in case the site is compromised.

Modum $MOD

Previously two in depth articles have been published regarding this niche blockchain project seated in logistics:

Modum – Real blockchain utility, in a sea of vaporware. Part 1 – From the whitepaper to mass production.

Modum – Real blockchain utility, in a sea of vaporware. Part 2 – Concerns regarding the token utility and possible classification as a security.

Simply, Modum is a supply-chain monitor for the pharmaceutical sector, that ensures shipments are meeting temperature requirements to comply with EU law. It can impassively reduce cost per shipment for hauliers and ensures transparency/audit compliance by keeping the data from its sensors on the blockchain.

You can purchase Modum at Binance and KuCoin.

Ambrosus $AMB

ambrosus masternode

 

Ambrosus looks like the most direct competitor to $MOD, focusing on food and medicinal shipments. There so far has been no showcase of any sensor equipment, but according to some of their updates they also have a focus on data silos and management to speed up compliance and process analysis. In practical terms, they do seem a way behind modum with no evidence of pilots or partnerships going live, while Modum has their fourth pilot going live with their proprietary technology, and 10,000 sensors hitting mass production in Q1.

According to the Ambrosus roadmap, they are planning on releasing the full API set and dev tools in March 2018, then in June 2018 releasing the sensors for Ambrosus. According to one of the content managers Aneesh, the team are:

In the process of patenting and protecting many of the sensor technologies and the smart packaging and product capsules.

In the Food Sensors and Tracers PDF published on their site, it seems Ambrosus will first start with traditional sensors, then move forward in developing new sensors that can allow assessments of various analytes in gases, liquid and solids, including 02 and C02 levels, glucose, ammonia.

Ambrosus combines the innovations and inherent strengths of the hardware and the software parts that it is a disruptive solution. Naturally, as with every breakthrough, stakeholders also need to have a multidisciplinary comprehension to accept Ambrosus. Therefore, the design of the hardware part will be carried out incrementally. There is more than one solution to a specific case. We can start with already in-place sensors, then propose new monitoring systems, and finally fully embrace the digitalization concept by entirely redesigning the system into one using modern food tracers and biosensors.

While Modum fulfils a niche, clearly Ambrosus is looking to disrupt the whole chain of integrity across logistics. Another key differentiation from Modum is the possibility of decentralising by going down the masternode route, although not confirmed yet, is an option the CEO Angel Versetti confirmed on Reddit the team were considering.

You can buy Ambrosus $AMB at Binance and KuCoin.

Waltonchain $WTC

Waltonchain is another RFID-based solution, and recently Boxmining visted Waltonchain’s reserach center in Xiamen to have a look at their product demo. Like Modum and Ambrosus, they are seeking to incorporating tracking of physical goods into the blockchain, and thus preventing counterfeiting an loss of assets during transit. WTC will have the ability to write information from RFID straight to the blockchain without any need for an API interface, as WTC holds a patent which integrates memory with RFID.

WTC also has some different token mechanics, as it has the possibility of becoming a masternode if holding 5K+ tokens. This feature coming online in Q1, possibly just after mainnet comes online and the token-swap and genesis block have been completed.

Waltonchain, out of all the ICOs in the past two years have probably the most amount of partnerships that are currently not under an NDA. An incredibly comprehensive list has been put together, and is well worth the read. A few of the highlights include:

Note that many of these projects are not just limited to logistics, which could either showcase the versatility of blockchain and WTC, or could be a concern the company is overstretching itself.

You can buy Waltonchain $WTC at Binance and KuCoin.

SophiaTX $SPHTX

sophiatx

Full article is linked below, but SophiaTX seeks to disrupt SAP-using businesses by integrating blockchain to increase inefficiencies between firms. They have recently signed a joint letter of interest with a Riydh based logisitics company that each year handles more than 2 million tons of cargo.

SophiaTX – Blockchain for business. Blockchain integration with SAP and enterprise software.

As always, do your own research, this is not financial advice.

Any thoughts? Follow me on twitter!

SophiaTX – Blockchain for business. Blockchain integration with SAP and enterprise software.

If you’ve ever worked for a business larger than 50 people, chances are they utilize SAP. SAP offers some of the top enterprise software Germany has to offer, with over 335,000 customers in 180 countries and revenues in 2016 of 22 billion Euros.

SophiaTX styles itself as blockchain for business, and their objective is to create a business blockchain platform and marketplace. The platform itself will contain open source APIs to connect primarily with SAP and other enterprise software, used by most of the biggest multinational corps across the world. A pretty ambitious plan right? According to one of their press releases, 87% of global businesses use SAP, along with 98% of the top 100 highest valued brands in the world also utilizing it. If blockchain can get its fingers into this market, SophiaTX could be a key tool for businesses.

Two companies are behind $SPHTX. DECENT is a blockchain-based digital medium distribution platform, whose token $DCT currently has a marketcap of 105 million USD. The other team are from Venaco Group, a ‘best in class’ SAP advisory and implementation firm.

The ICO was opened on 7th of Dec 2017, and finished just 10 days later on 17th Dec 2017, a fairly short run when most firms ICOs run for months. They did manage to raise the equivalent of $7.3 million USD, priced at 1 SPHTX = 0.00062789 ETH. A quick video used to market the ICO is here, but doesn’t have much content to be honest, their blog is a much better read to see some actual use cases.

The Product

As broken down by the SophiaTX whitepaper, there’s three core elements to the business.

  1. A blockchain built for business.
  2. a development platform to integrate blockchain and SAP/enterprise apps.
  3. Marketplace for companies and communities to buy/sell apps or data.

The blockchain itself is  a hardfork from the Decent coin,as stated in an interview with CEO Jaroslave Kacina by Bitcoin Magazine. Interestingly, the testnet blockchain is using Delegated Proof of Stake, so avoids costly mining in terms of both transaction fees and electricity. While proof of stake may not be ideal for a distributed consensus protocol, for a business app such as the one SophiaTX is developing it could be ideal. Being centralised also means they can bring the product to market faster, and is easier to keep secure. Data security is a key selling point to large firms with data breaches being all too common in the last few years. If you plug a email you’ve used over the past 10 years into HaveIBeenPwned chances are your data will have been exposed by atleast one company.

This does raise some questions about the utility of an ERC20 token on the ethereum blockchain, when the actual product is a private blockchain, with companies even being able to licence their own private blockchain. Isn’t that just a database?

However, from what the whitepaper says, and responses from the team in their Telegram chat, once the mainnet is online (Q3 2018 according to page 12 of the whitepaper), the ERC20 tokens will be swapped for those on the SPHTX mainnet, and used to purchase assets on the marketplace, licencing for private blockchain, reward for devs when customers are using dapps, and to payout transaction fees and rewards for miners validating transactions.

Partners and Projects

SophiaTX has recently signed a joint letter of intent with a Riyadh-based logistics company that every year handles more than 2 million tons of cargo. The intent is to bring blockchain to the pharmaceutical industry by facilitating a track and trace product across manufacturing processes, quality assurance points, shipment, and receipt of the products.

Sounds a little like modum but encompassing the entire supply chain, not just the shipment to end users from the manufacturers.

According to the press release from SophiaTX: “Each of the current top twenty prescription drugs (amounting to 10% of the global market in 2016) is produced by a company using SAP software products within their sourcing, manufacturing, or supply chain processes. SophiaTX’s integration with the system will allow pharmaceutical companies to write their products directly into the blockchain, thereby addressing issues of counterfeiting; compliance; supply chain conditions; traceability and recalls.”

Modum, Ambrosus and Waltonchain have all cited counterfeiting, traceability, recalls, and compliance as a key area they are seeking to disrupt with their business model, so it’s no surprise SophiaTX are seeking to do the same. However by integrating SAP into their model, it could potentially be much easier for firms to integrate blockchain into their existing systems.

Even more exciting than this, is the demonstration of a proof of concept at a recent blockchain seminar in Zurich, where the team demonstrated sending a variety of documents between SAP systems. An invoice was created within SAP, then transferred via the SophiaTX testnet to another firm using another SAP system. Read more over on their blog.

Competition – SAP itself moving into blockchain tech.

What is a concern is SAP is moving into blockchain tech, which poses the question – Why would you need a third party when SAP is already developing in the field? Surely they wouldn’t want to miss out on the huge revenue this disruptive new tech could bring to enterprise across the country.

Back in November, SAP announced the addition of 27 new members to the its blockchain program, from across major industries – including pharmaceuticals and logistics. At the same conference they announced three key use cases they hope to standardize across digital supply chains, these include:

  • SAP asset intelligence – a registry of equipment OEMs can use to share asset information to improve uptime and service.
  • SAP distributed manufacturing – An app to connect manufacturing with supplier and technical cert companies.
  • SAP transportation management – International trade on the blockchain to reduce fraud and theft.

All seems a little scary for SophiaTX. However, SAP’s project Leonardo (Blockchain as a Service) on which these 3 use cases are being built on, has been described as ‘relatively expensive‘ for smaller firms, and less transparent as it is cloud based by Kacina. We also MUST remember, the founders of SophiaTX (Venaco Group) are a company that specializes in SAP advisory services and implementation of SAP. These guys can target custom blockchain solutions and its integration with SAP, not just a few standardized use cases. This here is where SophiaTX can make a real name for itself.

Token Economics

Total supply currently lies at 350 million tokens, and the future total supply will sit at no more than 500 million tokens, with 70% of the tokens dedicated to development, operations, marketing, team will not be sold for 12 months after the initial SPHTX generation. Circulating supply sits at 202.5 million after adding the 30% of the team tokens, plus TGE tokens.

Currently marketcap is unavailable as ICO has only recently ended,  but ranked 1135 on coinmarketcap at time of publishing.

*Update*

Previously I didn’t list the marketcap as I couldn’t confirm if the 30% of the team tokens not required to be held for 12 months was to be included in the circulating supply. As of 20/01/18 it sits at $238 mil USD.

$SPHTX is only available on QRYPTOS, and Cobinhood, but hopes to be listed on Binance and KuCoin soon