What is VeChain?
A blockchain technology called VeChain was created to improve corporate procedures and supply chain management. It uses distributed ledger technology (DLT) to simplify these procedures and information flow for intricate supply chains.
The Vechain platform has two unique tokens: VeChain Token (VET) and VeChain Thor Energy (VTHO). While the latter serves as “gas” or energy to fuel intelligent contract operations, the former transmits value around the VeChain network.
Comprehending VeChain VeChain’s mission statement is to “create a distributed, trust-free business ecosystem platform to facilitate high-speed value transfers, effective cooperation, and transparent information flow.”
Multiple stakeholders currently divide up supply chain data into silos for business activities. This influences information flow, which is again fragmented among parties.
VeChain’s white paper states that blockchain technology can address “this asymmetric information problem and allow ownership of data to return to and empower its owner.” The VeChain platform promises to increase market openness by giving authorized stakeholders a 360-degree view of the data required to understand a product and its business operations, including supply, transit, and storage.
Examples of Applications for VeChain
For instance, the platform may be used to monitor the authenticity, quality, storage temperature, mode of transit, and last-mile delivery of an alcohol bottle or medication pack from the production facility to the final delivery to the end user. VeChain combines sensors, smart chips, and RFID tags to achieve this purpose. These devices broadcast essential data into the blockchain network, where authorized stakeholders may access it instantly.
The sensor application enables continuous monitoring of all product parameters and allows for reporting any issues to the appropriate parties. Manufacturers and consumers are notified if a medication package is kept outside the recommended temperature range, enabling greater quality control and service enhancements.
Another example is that car owners may control their data and use the VeChain platform to bargain with their insurance companies for better terms and coverage.
Background of VeChain
Sunny Lu, a former Louis Vuitton China chief information officer (CIO), established VeChain in 2015. It began as a division of Bitse, one of the biggest blockchain firms in China, and is one of the few blockchains with a sizable client base among well-known businesses.
The VEN token operated on the Ethereum network at first. 2018 saw VeChain change its name and move to its blockchain. The VeChainThor (VET) blockchain replaced the VEN blockchain as part of the rebranding.
The white paper for the VeChain blockchain platform describes its objectives. Its original goal was to transform the supply chain sector by enabling transparent and actionable data. It also intends to lead the way in decentralized applications (dApps) and VeChain-powered initial coin offerings (ICOs), acting as a middleman for the Internet of Things (IoT).
VeChain has signed strategic alliances with several businesses throughout the years to achieve this objective. One is a partnership with PricewaterhouseCoopers (PwC), where PwC’s clients will use VeChain’s blockchain-based products to improve product traceability and verification.
VeChain is the government technology partner for Gui’an, an economic development zone for the Central Chinese government. It has also worked with Renault to create an unhackable digital automobile maintenance book in collaboration with Microsoft and Viseo.
The Blockchain Platform of VeChain
A public blockchain designed for “mass business adoption” is the VeChainThor platform. The two tokens it possesses are VTHO and VET. The VeChain token, or VET, is what intelligent contracts utilize to transfer value, or “smart money.” To put it differently, VET will be used for decentralized application transactions on VeChain’s blockchain. The whole public is allowed to invest in it.
VeChainThor Energy, or VeThor Energy, is what the VTHO token stands for. It is equivalent to the cost of carrying out transactions on VeChain’s blockchain and powers such transactions.
The idea is similar to NEO’s “gas” and Ethereum’s “ether” in that developers must set aside a certain amount of underlying tokens for their decentralized apps to complete transactions. These tokens are kept private. According to VeChain’s white paper, the two-token system was developed to provide decentralized application developers with a predictable economic model and efficient governance.
Ethereum does not yet have such a model because of the volatility of the price of ether, the platform’s native gas token. Because of this, developers must calculate how much ether will be needed for a given transaction. If their estimate proves to be accurate, the deal is successful. VeChain’s white paper describes several technological improvements its platform has implemented to address this issue.
For instance, Proof of Work (PoW) may be applied to each transaction on the VET blockchain. If a transaction’s original estimate proves incorrect, the parties involved may mine extra VTHO.
The Governance Process
Proof of Authority is the consensus technique used by the VeChainThor blockchain. Votes are allocated according to this procedure, based on VET holdings and transparency. 20% of the votes go to VET holders who do not have know-your-customer (KYC) credentials but have one million tokens in their account; those with KYC and the same amount in their accounts are liable for 30% of the votes.
The 101 controller nodes on the VeChain blockchain are in charge of agreeing on transactions. Bitcoin operates differently from this system in that all nodes must approve a transaction to reach a consensus.
Nodes operating in anonymity are prohibited, and revealing one’s identity is a necessary condition for attaining the status of an authoritative controller node. VeChain’s white paper claims that this system does not need a minimum number of validators to obtain agreement and utilizes less power.
The economic controller node is the other kind of controller node in VeChain. They are power checks and don’t generate blocks or ledger entries. This is accomplished by giving each economic controller node a certain amount of votes according to their holdings of VET. A single vote is awarded to a financial controller node for every 10,000 VETs it has.
The controller node mechanism controls voting rights in a decentralized system. However, the VeChain creators have said that this protocol’s architecture aims to balance centralization and decentralization.
Conclusion
- VeChain is an enterprise blockchain technology designed to remove information silos and provide a complete picture of a business.
- VeChain also aims to establish itself as a top platform for initial coin offerings (ICOs) and for facilitating cross-device (IoT) transactions.
- VeChain uses two tokens: an intelligent contract layer called VeChain Thor Energy (VTHO) and a value layer called VeChain token (VET).
