VeChain is an enterprise-oriented platform that strives to connect blockchain technology with concrete business use cases, particularly in the field of quality control, data authenticity management, and supply chains.
|Market Cap||Volume 24h||Circulating Supply||Maximum Supply|
|$7,774,541,258||$367,072,607.12||64315576989.0 VET||86712634466.0 VET|
What Is VeChain
The VeChain project was born out of the desire to provide a robust, blockchain-powered infrastructure for data management and the Internet of Things (IoT) applications, with the aim of resolving real-life economic issues faced by modern-day businesses. While the scope of the application of VeChain is constantly broadening, its main drive have been issues such as frauds and counterfeit goods in which this platform serves to provide guarantees for a product’s authenticity, source tracing and adherence to safety standards.
VeChain is all about managing information relevant to businesses, such as data on various stakeholders, events or products, with blockchain playing the role of protector of the authenticity of various digitized data. Its business model revolves around the recognition that trust is an important resource and a common point of interest for both businesses and their customers. The platform’s main components are the VeChain network (VeChainThor), which implements the platform’s native Proof-of-Authority consensus protocol, and its dual token system encompassing VeThor (VTHO) and VeChain (VET) tokens.
Founded in Singapore in July 2017 as a non-profit organization, the VeChain Foundation is the overseeing body for the VeChainThor protocol and VET blockchain as the foundations of VeChain. It was previously simply known as VeChain (VEN) but was rebranded in 2018, the same year in which it launched its mainnet. Back in 2015, the project was initially thought out as a platform dedicated to tracking luxury goods. Sunny Lu, the project’s co-founder, and CEO, worked with some of the largest global companies and made this experience a part of VeChain’s mission to harness blockchain for the needs of the business world.
What Is VeChain Trying to Achieve?
Based on this, the VeChain team set out with the aim of meeting several specific goals by means of their platform:
- VeChain sees the transparency of information exchange on a global scale as the key driver of business collaboration and lightning-fast value transfers. VeChain seeks to link businesses, application users, smart contract and infrastructure providers within a single ecosystem focused on ensuring symmetrical and transparent information flow based on the digitization of data. Within it, businesses will profit from reducing associated trust-related costs, such as in the case of verifying the authenticity of procured goods via digital means, instead of doing it so via manual and paper documents.
- One of the examples involves the use of VeChain in fighting the proliferation of counterfeit wines. Customers can use a smartphone app to scan bottles’ QR codes and peruse blockchain-verified winery details, grape types and Chinese customs declaration numbers. They will also be able to see exactly when the bottle left the warehouse in France, and when it arrived in Shanghai. Other use cases include luxury goods, automobiles, retail, and logistics.
- VeChain wants to pioneer technologies which will make life easier for the customers who want access to genuine products for their money. VeChain’s focus on establishing partnerships with various industries does not end with the promised benefits for businesses only. Based on the use of IoT sensors and tagging technology, the goal of the project is to have the platform serve as the repository of registered products, with information on its authenticity and origins, date of manufacture and the manner of storage being available to the customers without the possibility for manipulation.
- To achieve this, the platform wants to offer a range of identifiers which are stored on its blockchain and given material shape in the form of RFID tags or QR codes attached to the finished products. One of the pioneering implementations of this tech was launched as part of the pilot project with H&M fashion outlets. Upon scanning the identifiers, the users will have genuine insights into the products they want to use, thus strengthening their levels of trust in a particular brand and helping the authorities ensure the products’ compliance with various anti-counterfeiting and food safety regulations. The same goes for distributors and third parties partnering with the manufacturers of labeled products, which can do the same at any stage of the product cycle.
- To promote mainstream adoption, VeChain wants to make its blockchain easy for deployment and available as a service. With that in mind, the VeChainThor is promoted as a robust and secure infrastructure designed as a turnkey solution for enterprises that have neither the time nor the resources to develop their own similar systems. VeChain features both hardware and software components which exist alongside a well-developed technological and business partner network whose innovations are available to all participants in the VeChain ecosystem. At the same time, VeChain also offers access to the Blockchain-as-a-Service ("BaaS") platform called ToolChain which offers features relating to supply chain process control, product lifecycle management, data management, and certification. ToolChain is designed as a gateway for small and medium-sized enterprises to get access to the blockchain technology without being hampered by the lack of financial resources for such a migration.
What Is the VeChain Platform’s Economic Model?
VeChain’s VTHO represents the underlying cost of using VeChain and will be consumed after certain blockchain operations are performed. The function of VET is to serve as a value-transfer medium, or in other words, smart money, to enable rapid value circulation within the ecosystem based on VeChain. VET is also awarded to network nodes that help facilitate the ecosystem via their operation as a form of incentive. These economic nodes are not part of the consensus model (see below) and are expected to act as a stabilizing component of VeChain.
The system is designed in such a way that VTHO is generated automatically by holding onto VET tokens. In other words, whoever holds VET will be given VTHO for free and be able to use VeChain for free as long as the operations performed consume less than the VTHO generated. The VTHO tokens can be transferred and traded to allow users to acquire extra VTHO for performing larger scale of operations such as running applications hosted on the VeChain Thor blockchain.
How Does Proof-of-Authority Work?
VeChain’s governance model is designed to promote balance between decentralization, centralization transparency and efficiency. The governing body is the Steering Committee which is elected by the members of the VeChain community. The network relies on the Proof-of-Authority (PoA) consensus. VeChainThor platform features stakeholders consisting of VET holders who sometimes get assigned specific roles, such as Smart Contract Owners and Authority Masternode holders. The number of Authority Masternodes is limited to 101 and they are required to be authorized by the VeChain Foundation and VeChain community.
Transactions and blocks on the network are validated by approved accounts which are designated as validators. Validators run software allowing them to put transactions in blocks. Prior to that, these individuals or entities must voluntarily reveal their identity and provide information on their reputation in order to be granted the right to validate and generate blocks. The process is automated and does not require validators to constantly monitor their computers. It, however, does require keeping the computer (the authority node) uncompromised.
Based on this, VeChain promotes this consensus model as offering the following key benefits:
- A low requirement of computational power
- No need for communication between Authority Masternodes to reach consensus
- System continuity does not depend on the number of available Masternodes
- Proof-of-Authority is managed by means of built-in smart contracts, with hard forks being avoidable in situations when the Authority Masternodes fail to effect an upgrade.
Technology Featured in the VeChain's Architecture
The VeChain platform features several components which, together with supported technologies, make up the bulk of its architecture:
- VeChain Mainnet is the heart of the platform.
- Smart contract support engine is part of the VET blockchain.
- Multi-Party Payment (MPP) is the protocol supporting easier onboarding of parties in charge of paying for transactions initiated by other parties. It is part of the platform’s Meta-Transaction set of features.
- Multi-task Transaction (MTT) system supports atomic transactions, batch payments and multiple calls to various contract functions into a single transaction.
- VeChain’s native ICO platform is primarily intended for startups which can organize proper cryptocurrency offers with the help of the VET blockchain.
As of September 2019, there are more than 55.5 billion VET tokens in circulation, out of a total supply of around 86.7 billion. Its market cap stands at USD 186 million as of the time of writing, while its all-time high saw the currency’s cap being valued at more than USD 1 billion, back in September 2018. The coin, VET, can be found on cryptocurrency exchanges such as Binance and HitBTC. The official VeChainThor Wallet is available for Android and iOS.