Blockchain technology has revolutionized several industries by providing safe, decentralized, and transparent platforms for data storage and transfer. VeChain is a blockchain network that has gained popularity in recent years.
VeChain is a blockchain-based supply chain management platform that aims to increase transparency, traceability, and accountability in industries. In this article, we will explain what VeChain is, how it works, and how it may be applied in many sectors. We will also go through the key features that set VeChain apart as a distinct and vital blockchain platform for businesses and organizations looking to enhance supply chain management and overall efficiency.
What is VeChain?
VeChain (VET) is a blockchain network that focuses on improving supply chain management operations. The protocol uses a tamper-proof distributed ledger technology to check the quality of the products of its users. VeChain uses a blockchain infrastructure to make sure businesses transport and store data.
VeChain’s public blockchain is called VeChainThor. VeChainThor tracks shipped goods and is used in enterprise supply chains. This gives VeChain real-world uses across different industries, including the food and beverage, fashion, and automotive sectors.
VeChain was founded in 2015 by the former chief information officer of Louis Vuitton China, Sunny Lu, along with Changpeng Zhao. They built VeChain on the Ethereum blockchain and later rebranded from VeChain to its blockchain, VeChainThor in 2018.
VeChain’s transition to its blockchain enabled it to provide quicker transaction speeds, more scalability, and more customizable smart contract features. VeChain has since expanded its collaborations and applications into a variety of industries, including food & beverage, logistics, and pharmaceuticals.
Even before its official launch, VeChain had already established partnerships with several prominent businesses, and it has continued to build relationships. Currently, VeChain has partnerships with several prominent companies across the globe, including UFC, BMW (Bayerische Motoren Werke), PwC, DNV GL, and Microsoft.
How Does VeChain Work?
VeChain employs a unique blockchain architecture that combines a Proof of Authority (PoA) consensus mechanism with multi-party payment protocol (MPP) and blockchain-as-a-service (BaaS) capabilities. The PoA consensus process ensures that only authorized nodes approve network transactions, ensuring high levels of security and efficiency.
The MPP functionality allows several parties to contribute to a transaction’s cost, lowering transaction fees for individual users. The BaaS functionality enables enterprises and organizations to build their blockchain-based apps on the VeChain platform without having to rely on in-house blockchain knowledge.
VeChain allows manufacturers to place designed tags on their products usually through RFID (radio frequency identification), QR Codes, or NFC (near-field communication). These tags or sensors collect data at each level of the supply chain, which is then stored and connected to the product’s identification.
Every product that runs on the VeChainThor platform is assigned a unique and distinct identifier called VID that can be used to identify the product, allowing the ownership history to be tracked anytime. The protocol uses this data to control quality, validity, and many other factors. These details can only be accessed using the project software tool (VeChain ToolChain).
Because it uses blockchain technology, the recorded data cannot be altered. This allows for an accurate record of every event across the supply chain. If something goes wrong, such as items being transported to the wrong location, the blockchain record will identify exactly where the error occurred.
Use Cases of VeChain
VeChain has various potential applications in a range of industries, including but not limited to:
- Food Safety: VeChain’s blockchain technology can track and verify the authenticity of food products from farm to table. This can help to avoid food fraud, reduce food waste, and increase customer trust in the safety and quality of their food.
- Logistics and Transportation: VeChain’s blockchain technology may be used to track and regulate the movement of commodities from shipping and warehousing to distribution and delivery. This can help firms optimize their supply chain, save costs, and improve delivery times.
- Pharmaceuticals: Pharmaceutical goods may be traced and validated using VeChain’s blockchain technology to verify that they are neither counterfeit nor expired. This can help to limit the spread of counterfeit or hazardous drugs and improve patient safety.
With its multiple use cases, VeChain can transform supply chain management and deliver better transparency, efficiency, and trust to a variety of businesses.
What Are VET and VTHO?
VeChainThor has a dual-token architecture that includes the primary crypto token, VET, and a utility token, VTHO. While VET is a popular transactional and value-storage token on the platform, VTHO’s primary role is to pay for network transaction/gas costs.
Users can publicly use VET to make transactions on the blockchain while VTHO is used to enable transactions on the protocol. It is needed to interact with the blockchain for certain operations, like the transferring of coins and executing smart contracts.
With this system, anyone that uses the VeChain blockchain can be sure of a stable transaction fee, while the price of VET can appreciate.
To successfully write data on the blockchain, payment must be made using VTHO. However, to generate Thor you need to own VET. Currently, 1 VET generates 0.000432 VTHO per day, this is the basic generation rate, which can be increased in the future but can never decrease.
A total of 72,511,146,418 VET is in circulation. while the maximum supply of VeChain is 86,712,634,466 VET. Please keep in mind that the VTHO token supply is dynamic and fluctuates with each new block (every 10s).
VeChain has a wide range of possible uses, including tracking and confirming product authenticity, enhancing food safety, streamlining logistics and transportation, assuring pharmaceutical safety, and encouraging sustainability. VeChain is bringing better transparency, efficiency, and trust to supply chain management through its relationships with diverse enterprises and organizations.
VeChain is well-positioned to become a leading platform in the area as blockchain technology continues to expand and disrupt other industries. VeChain is a platform worth watching in the next few years for its creative approach to supply chain management and commitment to offering real-world solutions for businesses and organizations.