VeChain is a blockchain platform designed to enhance supply chain management and business processes. Its goal is to streamline these processes and information flow for complex supply chains through the use of distributed ledger technology (DLT). The Vechain platform has two tokens: VeChain Token (VET) and VeChainThor Energy (VTHO). The former is used to transfer value across VeChain’s network, and the latter is used as energy or gas to power transactions.

History of VeChain

Sunny Lu, who is the former CIO of Louis Vuitton China, is the founder of VeChain in 2015. It started as a subsidiary of Bitse, one of China’s largest blockchain companies. VeChain is among the few blockchains that already has a substantial customer base among established companies. Initially, the VEN token functioned on the Ethereum blockchain. VeChain transitioned onto its own blockchain and rebranded itself in 2018. As part of the rebrand, the VEN blockchain became the VeChainThor (VET) blockchain in 2018.

Sunny Lu, Founder Of VeChain.



VeChain Target

The VeChain blockchain has outlined its goals for the platform in white paper. The initial target is to disrupt the supply chain industry by making data actionable and transparent. In the future, its blockchain plans to have dApps and initial coin offerings (ICOs) on VeChain. Including the Internet of Things (IoT) platform.

To that end, VeChain has inked strategic partnerships over the years with several companies. It is in order to help achieve this goal. Among these, the most important one is with accounting firm PricewaterhouseCoopers (PwC), which is also incubating VeChain. The blockchain company has also partnered with Chinese firm Jiangsu Electronics to develop custom RFID chips. It for use on its platform and car company Renault for its manufacturing operations. VeChain is also the government technology partner for Gui’an, an economic development zone for the Central Government.

Asset Digitization

VeChain plans to achieve this secure supply chain management ecosystem via the method of asset digitization. VeChain enables manufactures to assign products with unique identities to the platform. This will allow manufacturers, supply chain partners, and even consumers, to track the movement of products through their supply chain. VeChain makes use of its VeChain Identity (VID) technology, to mark and track a product. VIDs are made using a SHA256 hash function, which generates a random hash value that corresponds to a VID. That VID can then be written into a Near Field Communication (NFC) tag’ Quick Response (QR) code; or Radio Frequency Identification (RFID) tag; to be used for each product. This method allows for the tagged product and all corresponding information. Such as the supply chain activities of the product, to be translate from the real business world into the platform.

As well as allowing for the asset digitization of products, VeChain also supports authorization based digital ownership management. This means that ownership of products can be represented digitally on the platform. This is done through the use of smart contract technology. Which allows a digital asset to be link to an account that possesses both a public key and private key. The public key is made public and is show as an alias email address. Which other users can recognize and have access to it. The private key gives a user authorization and access to the corresponding digital asset.

Distributed Business Ecosystem (DBE)

There are several participants in the VeChain ecosystem:

Enterprises : that provide products and services to end-users to meet all needs Application Service Providers : that provide application development and services for enterprises and users on the VeChain blockchain Smart Contract Service Providers : that provide VeChain smart contract technology services to enterprises VeChain Network Node Providers : that directly participate in the blockchain network. And maintain a certain number of nodes to protect the overall network security VeChain Foundation : which is responsible for the construction of the blockchain network; technology research and development; upgrade and maintenance; and other basic technical services End-users : which receive the end product with additional information concerning its lifecycle.

VeChain ID Creation, Storage and Transfer

There is a specific process to develop the Unique identifiers used to digitize every item or asset. The digitization process occurs in three different stages:

ID Creation: A random ID is generated using a sha256 function and hashed before being written into a NFC, QR Code or RFID tag(s) to be used for each product. Storage on the Blockchain: Tag(s) of the hashed VeChain ID are customized based on client’s needs. Also ‘activated’ during a testing process using ‘V-Operation’. Testing software can be used on both mobile and desktop. Upon activation, the ID is then written into Blockchain and replicated among all nodes. Transfer of Ownership: VeChain enables authorization-based digital ownership management via Smart Contract. Whereas VeChain ID represents the ownership linked to an account with the key pairs combined with public key and private key.

VeChain Blockchain Platform

The VeChainThor blockchain platform is a public blockchain that intende for “mass business adoption.” It has two tokens: VET and VTHO.

VET is the VeChain token that carry value or “smart money” from smart contracts. In other words, transactions on decentralized applications occurring on VeChain’s blockchain will use VET. It is available for investing by the general public.

The VTHO token stand for VeChainThor Energy (VTHO) and is also can be call as VeThor Energy. It is to power transactions on VeChain and is equal to the cost of conducting transactions on its blockchain.

The concept is similar to that of Ethereum’s ether and NEO’s GAS in that developers need to budget for a certain number of underlying tokens. Which are not expose to the public in order to conduct transactions for their decentralized applications. Per VeChain’s white paper, the two-token system was devise for effective governance. And to have a predictable economic model for decentralized applications developers.

Advantages of VeChain

Enhance Trust along the supply chain: Removes the need for trust between parties among transactions

Removes the need for trust between parties among transactions Quality Control: Helps companies maintain consistent product standards in the supply chain

Helps companies maintain consistent product standards in the supply chain Automated process of tracking products: Helps logistical partners simplify product tracking. Tracking products no longer becomes a manual process

Helps logistical partners simplify product tracking. Tracking products no longer becomes a manual process Provides transparent and symmetrical information: Allows companies to have a clear insight. Include sufficient visibility into their products at any given point in time

Allows companies to have a clear insight. Include sufficient visibility into their products at any given point in time Semi-centralized model: Governance structure is a decentralized system through centralized channels. Completely decentralized models can be slow and inefficient when it comes to governance

Disadvantages of VeChain

Extreme fast growth: VeChain is growing extremely fast which can be a big risk without proper guidance

VeChain is growing extremely fast which can be a big risk without proper guidance Not completely decentralized: Proof of Authority principle relies on 101 nodes to validate transactions. Therefore, it is not completely be a decentralize-system and can run into issues if a few nodes go corrupt.

Proof of Authority principle relies on 101 nodes to validate transactions. Therefore, it is not completely be a decentralize-system and can run into issues if a few nodes go corrupt. Centralization of governance: VeChain has a Board of Steering committee. Which makes the public blockchain more private and centralized than other platforms like Ethereum

VeChain has a Board of Steering committee. Which makes the public blockchain more private and centralized than other platforms like Ethereum Extremely broad: Since VeChain is working with many different industries and rolling out the new VeChain Thor update. It could very hard for the team to deliver good results for every niche. It may have been better for the VeChain team to start with a smaller niche and then branch out to larger ones.

Lifecycle of a VeChain token:

End user : purchases the VeChain Token (VET). VeChain Foundation : receives the VeChain Token (VET) from each smart contract development and service provider to pay for the GAS needed to run the smart contract and maintain the operation of each business smart contract. Smart contract service providers : use VeChain Token (VET) to pay for GAS and provide smart contract service of BaaS (Blockchain as a service). The application provider : builds off of smart contract services and develops applications and products based on end-user’s needs in exchange for VeChain Token(VET) as corporate income. End-users : can pay VeChain Token(VET) to obtain enterprise products and services.

VeChain Market

Historical Data

Conclusion

VeChain’s market capitalization shows that there is significant demand and growth in the market. Their vision and goals are without a doubt very ambitious. Although it’s uncertain what the future of VeChain will look like, it’s development plan definitely brings excitement to the cryptocurrency community.

Source : mycryptopedia, investopedia.

Photo Credit : Crypto Up Close, CoinMarkeCap.

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