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VeChain is a blockchain-based platform that provides secure and transparent data storage solutions for businesses. Its functionality is diverse, including tracing product journeys, financing supply chains, and disseminating information in intricate, multi-party supply chain networks. VET uses smart contracts to help introduce innovative supply chain management solutions that are expected to change the face of business.
VeChain is a digital ledger technology that provides various solutions to enterprises seeking to streamline their supply chain activities, enhance transparency, and safeguard their operations.
Its blockchain employs a consensus algorithm termed Proof of Authority (PoA). The network entrusts a limited group of “authority nodes” with verifying and adding transactions to the blockchain.
VeChain’s smart contracts are flexible and can be personalized to cater to the specific requirements of a particular organization. They can also automate multiple supply chain-related tasks, including but not limited to, verifying the authenticity of goods, managing finances, and detecting and preventing counterfeiting.
VeChain addresses the challenges presented by supply chain management for businesses. With VeChain, companies can track their products throughout their entire journey from the manufacturer to the end consumer. Each product is assigned a unique identification number that is recorded on the blockchain, allowing for greater transparency and accountability throughout the supply chain. This innovative system provides businesses with a reliable way to ensure product quality and authenticity, while also streamlining supply chain operations.
By leveraging the power of blockchain technology and smart contracts, VET is helping to drive the adoption of next-generation supply chain management solutions that are set to revolutionize the way businesses operate.
How does VeChain work?
VeChain solves major data hurdles by allowing businesses to securely and transparently store and manage data on the VET blockchain. Its use spreads to a wide range of purposes, including product traceability, supply chain finance, and even information sharing within complex, multi-party supply chain networks.
VeChain’s blockchain platform Thor utilizes smart contracts and unique identification labels to improve supply chain management. It enables tracking and verification of the authenticity and provenance of products. This increases confidence in the quality and origin of goods for both businesses and consumers.
The VeChain blockchain operates on a dual-token system, where the VeChain Token (VET) is the main utility token, and the VeThor token (VTHO) deals with transaction fees. Through staking their VET, users can earn VTHO, which can be employed for transaction costs on the VeChain network. This system encourages VET holders to retain their tokens and contribute to the security of the blockchain.
Proof of Authority (PoA)
VeChain’s technology centers around the VeChainThor blockchain, a public, permissioned blockchain that leverages a proof-of-authority (PoA) consensus mechanism to ensure high levels of security and scalability. This framework likewise permits the usage of custom business rules and smart contracts.
In a PoA network, network nodes who validate transactions are recognized as “authorities”. The protocol selects these authorities based on their reputation and performance. They usually comprise individuals or organizations with a vested interest in the network’s success.
Within the VeChainThor blockchain, the responsibility of validating transactions and adding them to the blockchain lies with the authorities. To achieve this, authorities use their unique private keys to sign each block of transactions, providing evidence that the block has been verified. Consequently, this method allows for faster processing of transactions and improved scalability. That’s what sets it apart from proof-of-work (PoW) and proof-of-stake (PoS) mechanisms.
Beyond their responsibility of network maintenance, the authorities on the VeChainThor blockchain can also implement tailored smart contract rules. This feature allows for diverse business applications on the VET platform, such as automated supply chain processes and product tracking, including the ownership and movement of goods.
VeChain Identity (VID)
On the VeChain ecosystem, to verify and track the authenticity of products, each product gets assigned a unique identification label referred to as a VeChain Identity (VID). This VID can attach to the product itself, or embed into a QR code or NFC chip. The VID contains relevant information about the product’s provenance, such as production date, origin, and any pertinent certifications or compliance data. This enables companies to track their products throughout the supply chain and verify their authenticity.
Use cases for VET
VeChain’s capabilities in supply chain management and product traceability make it a valuable tool in various industries.
A particular use case is ensuring the authenticity and provenance of high-value items like luxury goods. By using VeChain to track the production and movement of their products, luxury goods businesses can protect their brand and reputation, providing consumers with a higher level of confidence in the quality and origin of the products they purchase. Considering this, we can apply VET to many industries and transform their chain management.
VET established in 2015 by Sunny Lu, an entrepreneur from China. He had previously worked as the Chief Information Officer of Louis Vuitton China. Lu’s aim was to use blockchain technology to improve supply chain management and increase confidence in the quality and origin of goods and products.
The network started as a private consortium chain and worked with select enterprises to explore blockchain use cases. However, in 2018, VET launched its own blockchain network, the VeChainThor blockchain, after rebranding. The company continues to focus on developing its technology to provide supply chain management and product traceability solutions.
In February 2020, project Chief Scientist Dr. Peter Zhou, and Blockchain Researcher Dr. Zhijie Ren, published a paper that introduced the concept of the next-generation PoA consensus algorithm for blockchain networks, later named PoA 2.0.
PoA 2.0 includes improvements and enhancements to the original consensus, mainly including increased security, scalability, and performance for future adoption.
The VeChain Foundation is a non-commercial organization that manages the expansion and uptake of the VET platform. The foundation strives to encourage the utilization of VeChain’s technology in a wide range of sectors: retail, logistics, and agriculture. Apart from supporting the development of the VeChain platform, the foundation and the VeChain team also contribute to community-building and educational initiatives aimed at promoting the adoption and comprehension of utilizing blockchain technology.
Frequently asked questions about VET.
Why is VeChain (VET) important?
VeChain’s platform provides a secure and decentralized solution for businesses and consumers to track and verify the authenticity and origin of products. This is crucial in today’s global economy where supply chains can be complex and difficult to navigate.
Counterfeiting, fraud, and safety concerns are some of the issues that can arise in such a scenario, and VeChain’s transparent and immutable blockchain records the movement and ownership of products, giving businesses the ability to trace the provenance of their products and verify their authenticity. At the same time, consumers now make informed decisions based on the quality and origin of the products they purchase.
What makes VET unique?
VeChain comprises unique features that distinguish it from other blockchains. One of its notable features is being one of the pioneers in applying blockchain technology to supply chain management. This enables businesses to streamline their processes and track physical products more efficiently and transparently.
Moreover, VeChain has a unique dual-token system consisting of VeChain Tokens (VET) and VeThor Tokens (VTHO). VET serves as the platform’s value token for smart contract execution and transactions. VTHO is what users utilize to pay for transaction fees. This system provides a flexible and cost-effective method for transactions and enables users to easily interact with the VeChainThor blockchain.
How does Proof of Authority compare to Proof of Stake?
Proof of Authority (PoA) is a consensus algorithm used in blockchain networks. It is a variant of Proof of Stake (PoS), where the right to create new blocks and validate transactions is determined by the amount of stake, or cryptocurrency, that a user holds.
In PoA, on the other hand, the reputation and trustworthiness of the user determines the right to create new blocks and validate transactions, instead of their stake. This means that users with a proven track record of honesty and reliability are allowed to participate in the network as validators, while users with a poor reputation are excluded.
Who uses VeChain (VET)?
VeChain has established collaborations in multiple global industries with major names, including BMW, LVMH, Walmart, and the Chinese Government. To clarify further, find the complete list of VeChain partnerships here.
What is the circulating supply of VET?
VeChain has a total supply of 86,712,634,466 VET, and a circulating supply of 72,511,146,418 VET.
Where do I buy VeChain?
To buy VET head over to any of the exchanges that support its trading: Binance, KuCoin and Kraken. Furthermore, the market cap and circulating supply of the coin determines the VeChain price.