VeChain is a blockchain platform designed to enhance supply chain management and business processes.
By using distributed ledger technology (DLT), it aims to streamline these processes and improve the flow of information for complex supply chains.
Our VeChain (VET) guide will discuss how it works, how it solves real-world business problems and ultimately whether it’s worth buying as an investor.
At its heart, the VeChain blockchain is designed to make supply chain management easier.
Originally, it was developed to prevent frauds and knock-offs by determining if a real-life product is fake or not.
Major corporations now use VeChain to track everything from wine production to car manufacturing.
The way it achieves this goal is simple:
Let’s jump straight into our guide.
In this subsection of our LeoFinance VeChain (VET) guide, we investigate how VeChain works.
To accomplish this task we will look at VeChain in four parts:
Why does IoT and blockchain-based solutions make sense for businesses?
By combining IoT with blockchain technology, businesses can secure their information and maintain data integrity in a transparent manner.
If this information is also made compatible with existing Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and/or Warehouse Management Systems (WMS), businesses can automate processes and increase efficiency.
Specifically, VeChain works by assigning various physical products unique identities by utilising radio frequency identification (RFID), QR Codes, and/or near-field communication (NFC).
Sensors record the identifiers broadcast by these technologies at each stage of supply chain progress and the information acquired is recorded and linked to the product's unique identity.
The Internet-of-Things (IoT) devices used in this process were designed by VeChain and manufactured by companies such as Bosch and Qualcomm.
As the information gathered by these devices is entered into blockchain technology, the data so recorded cannot be modified in any way.
Using the blockchain allows for totally truthful information concerning what conditions were present as the product moved through the supply chain.
Should any problem arise (i.e. products are misdelivered) the blockchain record is available to display exactly where the error occurred.
VeChain originally issued tokens on the Ethereum blockchain then known as VEN.
In 2018, VeChain released its own blockchain platform and rebranded itself as VeChainThor, now known as VET.
The VET coin is the payment vehicle used in the VeChain ecosystem and is the coin available for investors.
VET can transfer value across the blockchain and trigger the execution of smart contracts.
The more VET coinage owned by an individual or entity, the higher rank in priority the individual or entity has to utilise VeChain's blockchain resources.
VeChain is a dual-currency ecosystem.
The VET coin may be used to generate the second system token, known as VeThor or Thor Power (VTHO).
The VET coin is used to store and transfer value and VTHO is used for blockchain transactions.
So for a company to use VeChain's supply chain tracking system the company would have to pay VTHO in order to add information to VeChain's blockchain.
Due to its dual coin design, VeChain applications are able to charge stable fees (since the VTHOR supply can be adjusted to maintain a stable price for transactions).
The platform used to accomplish all of the above is known as the VeChain Mainnet.
The VeChain Mainnet may also be used by other blockchain projects to launch their own protocols and issue their own coin.
It has been the expansion of the VeChain platform that has permitted VeChain to move beyond supply chain solutions allowing it to expand into other Decentralised Applications and Non-Fungible Tokens.
As a direct result of the very nature of VeChain's business, it is necessary for its blockchain to deliver secure and timely consensus.
To accomplish this VeChain has introduced a unique proprietary consensus mechanism known as Proof-of-Authority (PoA).
This PoA mechanism was built intending to improve upon PoW, PoS, and DPoS consensus strategies.
The PoA system uses less energy than the other mechanisms and does not require communication between nodes to reach consensus.
VeChain relies on 101 Authority Masternodes to reach consensus:
To be an Authority Masternode (AM), the individual or entity voluntarily discloses who they are (identity and reputation by extension) to the VeChain Foundation in exchange for the right to validate and produce blocks. It is their identities and reputations placed at stake that give all the AMs additional incentives to behave and keep the network secure. In VeChainThor, each AM has to go through a strict know-your-customer (KYC) procedure and satisfy the minimum requirements set by the Foundation.
Accordingly, there are no anonymous nodes in the VeChain network.
Both KYC and AML identification is required to validate blocks in this system.
This follows the underlying design philosophy of the VeChain developers concerning governance to wit: "neither a total centralisation nor a total decentralisation would be the correct answer, but a compromise from and balance of both would."
The last word on this consensus mechanism is that it exhibits both advantages and disadvantages.
It has the advantage of allowing for large volume transactions to be processed quickly, but it has the disadvantage that it relies on a central authority to check and authorise users who can process transactions.
VeChain clearly demonstrates that as the blockchain matures, it is becoming much more than simply cryptocurrency.
Platforms integrating blockchain with other developing technologies are expanding disruption of the status quo and increasing efficiency in the process.
No longer are the cryptocurrencies that power blockchain tech purely the domain of speculators.
We’re finally seeing blockchain technology being used to solve real world problems.
One project that’s forging ahead in this regard is VeChain (VET) with a solution to the way companies approach supply chain management.
VeChain features an increasing number of technological advancements and international business partnerships that are worth looking at.
This section of our VeChain (VET) guide takes a deeper look at what the blockchain is used for, highlighting its top 4 use cases.
Let’s dive straight in.
After expanding to the point where its ToolChain onboarding platform can now accept new applicants, VeChain can start solving real world business problems.
4 of which we go over below.
The first use case for VeChain (VET) is for use within the energy industry.
The VeChain blockchain can be used to track an individual or company’s carbon credits, which in turn can be traded on the open market.
As we move toward a global solution for climate change, economic incentives such as carbon credits are going to have to be transparently tracked.
With an already working solution, VeChain has positioned itself to take advantage early.
Second up, another use case for VeChain (VET) is for use within the medical industry.
While privacy is an obvious concern for many, inaccurate health records can also lead to disastrous medical outcomes.
Currently we see a large proportion of medical records stored on outdated, legacy systems.
As a result, they are not easily transferred between doctors, sometimes with catastrophic results.
If medical records were securely stored on chain and available to professionals when needed, lives will be saved.
The next VeChain (VET) use case we want to highlight is for use within the food industry.
Delivering food from farm to plate takes movement along a long, multi-faceted supply chain that is open to problems every step of the way.
Using VeChain to track food as it moves along will ensure quality and integrity of the product is maintained.
Ultimately leading to a safe, delicious product once it hits the consumer’s plate in the end.
While the previous 3 VeChain use cases have focused on specific industries, we finally want to highlight VET’s ability to limit counterfeiting.
An issue that is seen across industries, counterfeiting not only sees the supplier lose revenue, but the consumer potentially delivered sub-standard product at the end.
VeChain offers the ability to track items from production, through distribution networks along the supply chain and finally to delivery.
This transparency ensures the product delivered is legitimate and of the expected quality.
This section of our guide to VeChain (VET) has gone over just a few key examples of how VeChain can be used.
Ultimately you can see that VeChain is helping real businesses solve problems relating to supply chain management.
A massive global market that crosses over to almost every industry, in every corner of the globe.
For a full directory of dApps running on VeChain check out the list on VeChainWorld.
This section of our VeChain (VET) guide is designed to show you an unbiased feature set comparison of two blockchains:
Our side by side comparison of each blockchain in table form.
| VeChain (VET) | Chainlink (LINK) | |
|---|---|---|
| VeChain started in 2015 and was launched in 2016. | Chainlink started in 2017 and its final mainnet release was in 2019. | |
| VeChain has a total supply of 86,712,634,466 VET coins and a circulating supply of 64,315,576,989 VET coins. | Chainlink has a total supply of 11,948,821,571 LINK and a circulating supply of 452,009,554 LINKs. | |
| VeChain makes use of the Proof of Authority (PoA) consensus algorithm in its blockchain. | Chainlink uses a Proof of Stake (PoS) consensus in its blockchain. | |
| VeChain also supports Solidity as its programming language and is compatible with the Ethereum Virtual Machine. | Chainlink uses Solidity as its programming language and it's compatible with the Ethereum Virtual machine. | |
| VeChain has VeChain (VET) and VeThor (VTHO) tokens. Vechain is used for transactions and VTHO is generated on the basis of VET token holdings. | Chainlink has LINK as its token which is used for transactions on the chain. | |
| VeChain blockchain is designed to solve the supply chain management industry specific problems. | Chainlink blockchain is designed with Oracle service for blockchains in mind. | |
| VeChain has recorded 500 TPS based on current data but it is speculated to touch 1000 TPS. | Chainlink allows transactions per second of about 70 TPS based on available data. | |
| VeChain has VTHO on its smart contract layer and supports developer smart contracts on it. | Chainlink being the Ethereum Virtual Machine compatible chain, supports the ERC smart contracts. | |
| VeChain's VET tokens can be staked and exchanged in major exchanges. | Chainlink's LINK tokens can be staked and exchanged. | |
| VeChain is available on Binance, Huobi and a few major exchanges and is available on only few wallets compared to Chainlink. | Chainlink being the popular Oracle token has relatively more exchange and wallet support. |
Chainlink is being used in a use case specific to the Oracle service and the cross-blockchain bridge system.
Vechain on the other hand is designed for the supply chain management use case.
Both of these blockchains intend to solve different use cases and be used in different industries.
Depending on the developer’s use case or investor interests, the choice for choosing one out of the two differs.
If you are a developer who wishes to make use of the Oracle service or cross-bridge based functionalities, then your default choice should be Chainlink.
Whereas if you plan on making use of a blockchain specific to the supply chain industry with an enterprise focus, then VeChain is the right option.
While the majority of the cryptocurrency space is focused on shiny new consumer-focused things like DeFi and NFTs, VeChain’s potential lies in solving real-world business problems.
As a blockchain built to increase efficiency across the entire supply chain management process at the enterprise level, VeChain and the VET token has a very specific niche.
By using a combination of immutable blockchain records and physical IoT devices to track goods as they move through supply chains, VeChain has the potential to not only succeed as a business-specific blockchain, but also to improve lives.
This section of our VeChain (VET) guide goes over the potential of VeChain, discussing the blockchain's future.
Yes, the project’s potential to solve business supply chain problems will ultimately ensure that VeChain has a future.
You see, VeChain isn’t aimed at your average consumer who’s looking to buy products at retail prices, but instead their target market is major enterprises.
For this reason, the future of VeChain and the VET price relies much more heavily on the partnerships that they can form in these initial phases.
VeChain’s future potential will be determined by a completely different set of metrics to that of say Bitcoin or Ethereum.
Ultimately, the project’s future potential lies within a major consensus upgrade that has been slated VeChain 2.0.
According to the VeChain team, this upgrade will see the implementation of major infrastructural updates such as:
You see, VeChain uses a consensus mechanism called Proof of Authority (PoA).
This enables the VeChain network to efficiently process high-speed transactions based on identity and reputation as a stake.
The network uses 101 authority nodes and while centralisation is an issue, there’s an argument to be made that for business-focused supply chain management, this isn’t an issue.
VeChain’s planned upgrade will see the implementation of a next-generation consensus mechanism that they’re calling PoA 2.0-SURFACE.
PoA 2.0-SURFACE can be viewed as a secure, use-case adaptive and relatively fork-free approach to chain extension.
If you trust the validators, and as we mentioned above, this may not be an issue for businesses, then on-chain security will be increased tenfold.
Ultimately, VeChain has a long way to go before we can say if the blockchain and VET token will be a success.
But there’s no denying that our guide to VeChain (VET) is starting to show the project’s potential heading into the future.
While VeChain will always be a business-focused blockchain, they have recently indicated that the time is now right for the network to host DeFi applications.
While this will no doubt be exciting for retail investors, moving into the DeFi space certainly doesn’t help VeChain solve supply chain efficiency problems in the business world.
Yes, VeChainhas potential, but they need to ensure their focus remains on solving problems faced by their specific niche.
Not by chasing the latest buzzword that excites retail investors and mainstream media outlets.
This section of our guide to VeChain will discuss both the pros and cons of the blockchain and the VET token itself as an investment.
From there, you’ll be able to make a much better informed decision on whether VeChain (VET) is the right project for you.
The 3 biggest reasons that VeChain will succeed.
Has a legitimate use-case: Unlike some of the more broad cryptocurrency projects on the market, VeChain has a clear and extremely legitimate use-case of solving business supply chain tracking issues.
Already formed a number of exciting partnerships: VeChain has built an absolutely stunning list of partnerships which can be viewed on VeChain Insider. Some notable partnerships on the list include PriceWaterhouseCoopers, H&M, BMW and even Walmart.
Features an experienced team: As an older cryptocurrency project launched back in 2015, VeChain has ridden through a number of market cycles. Led by founder Sunny Lu, the team is one of the more experienced in the industry.
An alternate 3 reasons that VeChain may fail.
Primarily business focussed: While this really only affects retail investors who want to use their VET tokens for their intended purpose, their focus is primarily on the blockchain. Not quite as sexy as say staking your tokens on an animal themed DeFi platform.
No DeFi options for retail investors: We’ve included the fact that VeChain doesn’t currently have DeFi options because the readers of our LeoFinance Crypto Guides are primarily retail investors. In saying that however, this could just as easily be seen as a pro as VeChain knows who they are and aren’t just going after the latest crypto fad.
Links to the Chinese Government: The CCP doesn’t partner with projects, they control projects. If not, their founders end up dead. Be extremely wary of anything the Chinese Government has ties to.
As for whether VeChain’s pros outweigh the cons, this is all a matter of interpretation.
If you’re looking at VeChain from the point of view as a business with a specific supply chain problem that is bleeding money and reputation thanks to counterfeit goods, then the answer is yes.
On the other hand however, if you’re looking at VeChain from the perspective of a humble retail investor who simply wants to lock their VET into high yielding DeFi platforms and walk away, then the answer is probably no.
My own final verdict is that VeChain’s targeted, supply chain focus is nothing but a positive.
Not only are they talking the talk, but the list of partnerships we’ve linked to in the pros section above shows that they’re also walking the walk.
As our VeChain (VET) guide has continued to emphasise, the key to buying VET at the right price will be down to watching potential new partnership rumours and success stories.
That is where you’ll find your edge.
VeChain (VET) is not the usual type of cryptocurrency that we are used to reading about.
As per the VeChain whitepaper, It is a stated goal to build a trust-free and distributed business ecosystem platform to enable transparent information flow, efficient collaboration, and high-speed value transfers.
To clarify this, we can think of VeChain as 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).
In this section of our LeoFinance VeChain (VET) guide, we investigate this novel blockchain with a view as to whether or not you should buy VET in 2021.
Per CoinMarketCap, at the time of the writing of this section (November 9, 2021) there is a circulating supply of 64,320,000,000 VET.
With the current price of $0.1791 the market capitalisation of VeChain (VET) is $11,516,640,389.
There is a total supply of 86,712,634,466 VET coins authorised, yielding a fully diluted market capitalisation of $15,531,082,910.
Presently, VeChain (VET) is ranked No. 22 by market cap.
Key points:
A review of the VeChain (VET) price chart for the entire history of the project demonstrates the parabolic rise in the first four months of 2021 as well as the 80% crash in mid-May.
However, thereafter, the chart demonstrates a nice upward resilient trend (with obvious corrections), especially when taking into account external market forces and periods of unrelated project market volatility:
VeChain (VET)’s success all comes down to the success of their partnerships.
This LeoFinance Crypto Guide has provided you, a potential investor in VeChain (VET), with the key elements to consider in reaching a final decision on this token.
In reaching a final investment decision many differing opinions should be sought out.
Reliance on one source is highly discouraged.
Please remember, this section of our guide to VeChain (VET), is merely a starting point and should not be deemed a substitute for doing your own diligent research.
LeoFinance Crypto Guides.
Why not leave a comment below and share your thoughts on our guide to VeChain (VET)? All comments that add something to the discussion will be upvoted.
This VeChain (VET) guide is exclusive to leofinance.io.
