Sunny Lu: Future Belongs to Public Blockchains
Crypto Asia 100 Vol.3
Sunny Lu, CEO of Vechain, is born and raised in Shanghai with a background in electronics and communication engineering. Before self-teaching himself blockchain knowledge, Lu worked as an IT executive at Fortune 500 Companies for over a decade. By 2015, he finally launched himself into the blockchain sphere by founding VeChain [VEN]. In less than three years, VEN has become a top 20 cryptocurrency in the market. More impressively, it partners with giants across industries including PwC, Groupe Renault, and BMW, to name a few. This year sees VeChain evolves into a public chain with more inclusiveness. The Crypto circle comment on VeChain: In this industry, you have companies with only a white paper and the products still in their mother's womb. But VeChain's "child" has been running, and it is running fast and unattainable. But for Lu, such stunning progress is but a natural result of his choices.
FUTRE BELONGS TO PUBLIC CHAINS
BIANCA: VeChain started as a consortium blockchain. What made you shift to the public chain?
LU: All blockchain networks can be put into one of three groups. There is the private chain, where all nodes are under the control of one entity. The second is the consortium blockchain. It has more participants than the first type. An earlier version of VeChain consisted of a consortium of partners and clients. We all worked together to maintain this network. But this network is not open to the public, meaning whoever wants to join must get the approval from other participants. The third and last is the public chain--usually an open source system. Anyone can join or drop out at any time. I think public chains are more open and flexible than the other two types, and they're also more in line with the essence of the blockchain.
In the past, VeChain provided services for companies in the form of a consortium chain, by turning blockchain technology into practical applications. But we found two problems in the process. For one, when you put projects on the consortium or private chain, the whole thing was like a local area network in the early days of the Internet. While having a certain degree of connectivity, they were very much limited. The future of blockchain should be the equivalent of world wide web. The future belongs to public chains. Then we did extensive research on the existing public chains. We had thought about grafting VeChain applications to those networks. However, all those public chains were flawed, so that our partners, such as PwC, or Det Norske Veritas, were reluctant to adopt them. In the end, we decided to do it ourselves and upgrade VeChain to a public chain.
WE DON'T MIND COPY CATS
BIANCA: How did you get involved in MOBI (Mobility Open Blockchain Initiative), and what role does VeChain play in this alliance?
LU: We didn't know anything about it when MOBI was founded in San Francisco. Renault and BMW participated, both our customers. VeChain started working with Renault in 2016 and BMW in 2017. They essentially pulled us into MOBI. In fact, we are the only member in MOBI that has a working application, so we play the role of a leader in a sense. We are open to collaborations. We hope with the permissions of Renault and BMW we can even share their cases with other members, allowing blockchain companies and auto companies to become part of the innovation. We don't mind them copying us even. That's how you improve and make better products.
BLOCKCHAIN AND LOGISTICS: MADE FOR EACH OTHER
BIANCA: DHL has expressed a willingness to work with you. You have also developed a DApp (decentralized application) with German logistics provider DB Schenker. Why does VeChain choose logistics as its approach to effectively create blockchain applications? How will the blockchain change the logistics industry?
LU: People see logistics as the lifeline of modern enterprises. From raw materials to production to dealers and retailers, and finally to customers, logistics underlies every step in the way. Blockchain plays a similar role in synergizing things, therefore sharing many characteristics of logistics. When VeChain has created enough applications in many industries, logistics seems a natural choice. With the help of blockchain, the credibility of the data required by product management and logistics rises significantly. So the blockchain provides many opportunities for industry breakthrough.
Another area that will inevitably see blockchain is insurance. One of our clients is LogSafer, a supply chain risk management company. Blockchain enables a more credible and timely data collection, and it opens gates for new insurance services. I think the logistics industry is at the same time a user of the blockchain technology, a facilitator of its development, and will become a reliable data provider. In a word, logistics and blockchain are closely knit together.
BIGGER COMPANIES, EASIER TO WORK WITH
BIANCA: Whether it's Renault, BMW, or Logsafer, it seems you only partner with big companies. Meanwhile, other public chains, such as Ethereum, often introduce applications developed by startups. What is your consideration for this?
LU: After all, blockchain is a technology to corroborate other technologies. You have to combine it with, say the Internet of Things or artificial intelligence, to build useful products. Especially if you want to apply blockchain to the real economy, large companies often have a more mature infrastructure that allows faster realization. I am not saying startups cannot achieve the same. But for startups, they have so many things to start from scratch. Maybe when they accumulate enough product and service experience, they will have grown into a big company themselves and startups no more.
That being said, we have initiated collaborations with startups as well. We recently launched two projects. One is called "Plair." It has flourished in the eSports and gaming industry for a while and has embraced blockchain lately. We also have a young team in the Netherlands with resources in animal husbandry. A team member used to work in the livestock industry. They started a new company that used blockchain to keep track of the supply chain. So we do work with startups outside big companies. But generally speaking, we hope companies in the VeChain ecosystem has a basis in the established businesses. To be honest, I don't like projects where you have a white paper, a few people, and then you launch an ICO. We hope our clients have operated in the real economy for some time and have a solid foundation. Blockchain only serves to enhance its current business model, then hopefully we can bring some breakthrough. This is our ideal for a partnership.
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