VeChain (VET)
What is VeChain?
VeChain is a blockchain platform powered by the VET token and focused on helping enterprises enhance their supply chain management and business processes, which were issues many experienced during 2020.
2020 was arguably one of the best years for cryptocurrencies, as evidenced by Bitcoin’s reaching its all-time high. While the crypto market was a big winner in 2020, enterprises worldwide experienced issues when humanity found itself facing an unprecedented challenge: COVID 19.
Unplanned quarantines around the world disrupted not only retail sales and acquisitive power but also the supply chains on which companies relied on.
This forced companies to look for ways to improve their supply chain management to mitigate and minimize the effect of future disruptions, with blockchain being one of the most adopted technologies.
With VeChain, retailers and consumers are able to sell and buy with confidence on the quality of the products while helping create a healthier supply chain management ecosystem. The VET token is at the heart of the system, and it has found a supportive market for its growth.
What is the Purpose of VET?
VeChain was created with the purpose of harvesting the security, reduced costs, improved efficiency, and increased transparency that blockchain technology can provide and add them to the supply chain management sector.
Blockchain has already shown how powerful it can be in logistics, but most platforms have been created by private companies.
VeChain and the VET token allow retailers and consumers to verify the authenticity of the products they are acquiring by accessing records stored in a distributed ledger, providing information on transit, raw materials, sources, and any other information regarding movements in the supply chain.
This results in retailers being able to better focus their efforts in areas like ethical manufacturing, the efficiency of transportation, determining quality issues in materials, and similar factors that can affect their business in different ways.
For consumers, VeChain offers the ability to verify the authenticity of any product they acquire and avoid counterfeiting and make better decisions based on aspects like environmental or ethical concerns, source of ingredients/materials, etc.
By breaking the existing asymmetry when it comes to information, VeChain aims to empower the owner at any given time by giving ownership over the data and helping them make better decisions.
VeChain is also expected to become a platform in which Initial Coin Offerings (ICOs) and Decentralized Apps (dApps) can be launched.
How does VeChain work?
VeChain works by identifying physical products in a unique manner by using different types of hardware or technology such as Near-field communication (NFC) tags, QR codes, radio-frequency identifiers, or other types of sensors manufactured by VeChain’s partners (like Qualcomm and Bosh), to track products at every stage of the supply chain.
The information harvested by these sensors is then categorized and recorded in a distributed ledger, always linked to the product's unique identity, ensuring the integrity of the data in the long term due to the tamper-proof nature of blockchain technology.
As this data can’t be modified in any way, every part of the supply chain process will be auditable at any point by the manufacturer or consumer by using the sensor to access the information.
Since the launch of VeChain’s own blockchain network (VeChain Thor), the platform has been powered by the VeChain Token (VET) and VeChain Thor Energy (VTHO) tokens. VET is used to power the network’s smart contracts and transfer value, while VTHO is used to pay for transactions in the network.
VeChain used a Proof-of-Authority consensus algorithm, which requires lower computation power and provides more efficiency than other consensus algorithms but requires verification and assignment of Authority Masternode Operators.
