VeChain CEO Sunny Lu’s blockchain lecture transcript in English
VeChainOfficial last edited by VeChainOfficial
Originally published on January 9th, 2018.
The content below were taken directly from Sunny Lu’s presentation during Silicon Valley Live’s Blockchain series of classes. Sunny was the 3rd guest lecturer in the series. The lecture is in a podcast for format, livestreamed to over 40,000 Chinese community members and blockchain enthusiast in over 100 wechat groups.
The name of this class was “The Revolution Beyond Technology: The Benchmarking Application of VeChain Technology in Automobile Industry”
The lecture was translated word for word from Chinese to English for our western audiences. We believe that the content of this lecture is very helpful for anyone to try to understand how we utilize our proprietary business knowledge and technology to solve these real life problems which is challenging to enterprises everyday, during the process, entirely new billion dollar industries could be created based on VeChain integrated solutions.
Table of Content for the lecture;
- Section 1. VeChain’s comprehension and interpretation of the nature of IoT.
- Section 2. The landing application of VeChain technology in Groupe Renault project.
- Section 3. How can we apply VeChain technology in other fields of IoT. (A case study with DNV GL)
- Section 4. The new thoughts of VeChain within the management and economic models of blockchain system.
Due to the amount of translation work that needs to be done, we will release the translated text in 2 releases, so that our western community members can start digesting the contents ASAP. For this release, we will cover sections 1 and 2. We will also upload the actual audio file for the Podcast lecture in its entirety, it is in Chinese, those who can understand may listen to it. The translated transcript of sections 3 and 4 will be released as soon as we are done with it.
There are tons of great information from Sunny. For some, this piece might be what you have been looking for to understand more in depth of how VeChain works with our brand named partners and help them solve their everyday problems. So, please enjoy:
Lecture # 3:
The Revolution Beyond Technology: The Benchmarking Application of VeChain Technology in Automobile Industry
Presented by: VeChain Founder & CEO Lu Yang (Sunny Lu)
Section 1: The nature of “The Three New Technologies” and IoT
The Three New Technologies refer to the three latest and hottest technologies that have been frequently reported on by various major media around the world: Blockchain, IoT (Internet of Things) and AI(Artificial Intelligence). In late December last year, the Ministry of Industry and Information Technology of China released the 13th Five-Year Plan for the Economic and Social Development of China. The Plan mentioned two new technologies out of the three new technologies we mentioned above: AI and Blockchain.
The relationship among the “Three New Technologies”
The synergetic nature of VeChain’s integration of these technologies, and their development paths, might be slightly different from the mainstream conceptions previously held by the blockchain industry.
Our concept is: how can our technology provide better services for various applications within the actual solutions?
We believe that first, we should let the application itself discover its application scenarios. Then, let the application scenarios provide guidance for relevant application products. Finally, we use our products to support the development of the specific technologies that we have used previously to develop products.
During the actual application of these technologies and interfacing with our customers and projects, we found that blockchain technology itself cannot really realize any application scenarios or develop any products on its own. Blockchain technology has to combine with other technologies together for its multi-purpose use. Hence, our comprehension of the “Three New Technologies” is that:
- IoT is like our eyes or our hands: We use them to sense the world, to gather and collect data information.
- Blockchain is like our hearts: We use it to guarantee the authenticity and reliability of our data.
- AI is like our brains: By gathering all trusted and untrusted data, AI makes corresponding or anthropomorphic judgments for machine learning and decision-making.
Generally speaking, the three technologies are integrated together and interlocked tightly during the forming of designs for our customers’ cases.
Considering the fact that the blockchain projects in the IoT field have become a hot topic of discussion lately, and that all relevant projects have performed pretty well, today, I’m going to share some of my thoughts and ideas on the relationship between IoT and blockchain.
The relationship between IoT and blockchain
From the perspective of data authenticity, one of blockchain’s distinctive features is that the data involved is tamper-proof. Blockchain is used to guarantee of the authenticity of all data stored on its network. The question is, how do we ensure the authenticity of data from the source? The solution to this question requires IoT to conduct data collection through physical equipment. Hence, IoT technology guarantees the objectivity of data to a certain extent. For example, in a common scenario of cold-chain logistics, the IoT collects real time data of relevant temperatures and thus guarantees the authenticity and objectivity of data to a certain extent. Obviously, no technology can solve all problems. All we can do is try to limit human participation, and thus human error, to the guarantee of data objectivity and authenticity.
Basically, the bond between IoT and blockchain is naturally indivisible. The traditional world is digitized through a digital process that can be recognized and managed by various parties.
From the perspective of the development of IoT itself, blockchain is a very powerful booster of IoT. IoT technology is the interaction and interconnection among machines and equipment.
The establishment of a mature IoT ecology requires 3 steps:
1. A Unified Language
Just like when we communicate with each other, we need a language that is recognizable to both parties, some of the latest languages that have been developed in the world of IoT include NB-IoT and NOWA.
2. Identify Each Other
The identification process requires a unified or global ID. This means that the manufacturers of different equipment should be able to identify each other. However, the problem here is that in the real world, all equipment manufactured by various manufacturers would have their own individual serial number system, and that the serial number systems among different manufacturers are normally incompatible. The use of blockchain technology can perfectly solve this problem by providing a unified ID system that allows different manufacturers to identify one another in blockchain system.
From practical perspective, we have also made numerous attempts on this topic. For example, we tried to apply different smart contracts on blockchain system and that each smart contract represents one enterprise. The ID generated from these smart contracts can thus be matched with corresponding enterprises. In this way, all equipment manufactured by different enterprises can be distinguished and identified easily.
3. Interaction is Good Business
The third step of the process still requires the use of smart contracts and digital currencies to realize the transformation of values.
Overall, from the perspective of the 3 steps above (especially the second and third step), the development of IoT must involve blockchain technology.
VeChain’s methodology suggests that we should establish a connection between the real world, and the world of blockchain, via the construction of a channel that links both sides.
The practical application of our methodology mainly involves the following steps:
A. The digitization process of traditional world
- We provide a unified ID in the world of blockchain for all our objects, regardless if this object is a human, product or virtual file.
- Next, we generate a hash code based on the description or attributes of the object and bind the hash code with the ID of the object.
- Also, we use smart contracts to conduct or describe all commercial or target activities of this object. By using this method, we can manage to transfer all activities and objects in the real world into the world of blockchain and realize the digitization process of the real world that can be recognized and managed by various parties.
B. The tag system in the IoT
By using various IoT technologies that supports the binding and marking of different products, like NFC and RFID, different types of tags will be developed for the demand of different application scenarios and different objects.
Our microchips are directly embedded into the product. Hence, if anyone wants to destroy the microchips, he/she must destroy the product first. In this way, the anti-counterfeiting function is guaranteed. For example, we can embed a thin electronic tag into the cork of a bottle of wine, and in the electronic tag, we bind a unique hash code with the unique product ID of this bottle of wine. When you open the bottle of wine, you destroy the electronic tag embedded in the cork. In this way, we curb wine counterfeiting activities by preventing the repeated use of wine bottles.
Through the technology of IoT microchips, we are able to establish a connection via a channel that links the products in the real world with the virtual world of blockchain and a binding relationship with the products in the real world.
For most of our audience, your knowledge of VeChain is probably only limited to our product tracing and tracking service, including the product tracing and tracking project that we developed for French luxury brands and the biggest wine importer of D.I.G (Shanghai Waigaoqiao Direct Imported Goods Selling Centre) in China.
The product tracking and tracing project that we participated in truly reflects the development path of the combination of IoT and blockchain technology.
Next, I’m going to share some of our successful experience in another field that I have rarely introduced to others before — the application of VeChain technology in automobile industry. Our application in automobile industry mainly focuses on the perspective of data sharing.
Section 2: The landing application of VeChain technology in Groupe Renault project
The Cost of Digital Maintenance
In this mini project, we mostly followed a 3-step methodology as well.
First, we assign every vehicle a unique ID, which we call “passports” in the practical application.
Second, by generating a hash code based on the description of the vehicle and binding it with the vehicle ID, we managed to keep an authentic record of the basic information of the vehicle.
Third, by using different smart contracts, we managed to record all scenarios and transactions involved in the vehicle’s life cycle. The data source of the record originated from two sources: one source is originated from manual operation; the other source is originated from the data collected and uploaded by on-board IoT or on-board computers.
We can obtain a lot of information from on-board IoT, including driver’s driving habits, frequency of brake uses per 100 km, acceleration speed. This data will be very useful for future data users like insurance companies, or banks, during their value assessment processes of vehicles.
Through this process, all the data associated with the vehicle once owned by a vehicle distributors or sellers (for example, the vehicle maintenance data stored by vehicle sellers and auto repair services and the data of your spare parts owned by your spare parts suppliers) can be integrated and truly belong to you the buyer. It is obvious that different data holders only obtain portions of the data’s value, and when all of the data is integrated together, the sum is greater than the parts. The insurance company can check the vehicle’s life cycle, maintenance history and accident history etc. immediately, making it much easier for insurance companies to quote next year’s insurance cost for the vehicle. The entire process greatly reduces labor costs, or data trustworthiness cost, and the reduced cost would in turn benefit the users.
Green driving refers to choosing electric cars for transport means. These high-tech cars are normally connected to the Internet and can upload real-time information regarding driver’s driving habits recorded by on-board computers. Through our project, or platform, we can establish connection between vehicle data and personal data. During this process, Blockchain technology guarantees the objectivity and authenticity of all data recorded. Due to the fact that all relevant vehicle and personal credit ratings are based on all this data, we can even call it “activity credit”. This activity credit may also be used as powerful evidence for the reduction of personal carbon emissions.
Blockchain technology is an underlying technology in the concept of green driving. For most users in the real world, like us, we wouldn’t even care about it in theories or details. It’s just like how we use email everyday and likely don’t care what TCP/IP does. Blockchain technology is like the TCP/IP in our email systems, we can’t see it or touch it, but it is the foundation of the system.
To be Continued…