VeChain is a platform that aims to make supply chain management more efficient, transparent and cost effective. It plans on doing this by using blockchain technology to create a tamper-proof, irrefutable ledger that will track the movements products and shipments in real time.
The technology that VeChain provides offers a huge amount of utility and flexibility to many industries, but we’ll take supply chain as an example here.
How does VeChain work?
Vechain is based upon blockchain technology which is a decentralised way of tracking asset ownership. Information is entered into the blockchain, and that information can be viewed by a number of parties – the key is that after the information has been entered and confirmed to be correct, it can’t be altered after the fact.
The information is held in multiple different locations which are constantly compared against each other, ensuring that every database is the same and producing a consistent result. This is one of the ways in which blockchain is decentralised as there is no one person or company that controls the information, and so no one holds the power to edit it.
This technology has a wide array of uses across all different types of industries, but has a very obvious and immediate benefit within the world of supply chain. Different companies within the supply chain from producers and distributors, to couriers and merchants can track items through every stage, in real time, and be sure that the information is correct.
The way this works in the real world is through the use of VeChain Identity Technology (VID) to physically mark and track a product. This identity can be attached to a number of different mediums including QR codes and RFID tags, to quickly scan and identify products onto the blockchain.
A frequent example used is a bottle of wine that is fitted with VID when it leaves the winery, and will make it’s way through several steps of the supply chain to the consumer. The wine can be checked at every step of the chain, ensuring that it’s the same bottle of wine and that it has not been tampered with, from information on the blockchain that can’t be faked or altered. Even the consumer when they receive the bottle, could scan a QR code and see exactly where that bottle has been, to be completely confident in it’s authenticity.
Why does VeChain need a cryptocurrency?
A large part of the way the VeChain Network operates is through it’s currency known as VEN, or from the 26th of February, VET.
Vet can be bought or sold, and it’s movements are tracked through the blockchain, so it is always known where it is held and who owns it.
If you hold VET in VeChain’s cryptocurrency wallet, you will generate a second currency called Thor. Thor is a currency that will be used to pay for services on VeChain’s network.
So if a company wishes to use the VeChain network for supply chain purposes, which is just one of a number of uses, they will need to pay an amount of Thor for the transactions that are made on the blockchain as their information moves through it.
Now, if you’re holding VET you will passive generate an amount of Thor based upon how much VET you are holding. The more VET you have, the more Thor you generate.
In a very roundabout way, holding VET is almost like holding a stock – as you control a very small part of the VeChain ecosystem, and as you generate Thor which you can store, use yourself, or sell – so you are also generating a form of interest from your holdings.
This sounds great, why isn’t it being used already?
The VeChain network is still being developed and has yet to be launched, but it has already gathered endorsement and partnerships from some of the largest brands in the world, including:
DNV GL
BMW
PWC (Pricewaterhousecoopers)
Kuehne + Nagel
China Unicom
And even a national level partnership with the Chinese Government.
Considering the size of some of these players, it’s extremely hard to ignore VeChain and it’s place in the industry moving forward
The VeChain Foundation
The VeChain foundation is responsible for the construction, maintenance and continued development of the VeChain network and it’s projects. It also plays a large role in business development, encouraging and promoting partnerships. The foundation is comprised of an experienced team from various different industries, and headed up by CEO Sunny Lu.
Blockchain technology is becoming a larger part of the business world with each coming month, and with numerous blockchain projects launching in 2018 this is going to be a massive year. Initiatives like VeChain are certainly leading the way, bringing the technology closer and closer to mass adoption.