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We always talk about the great things that crypto and blockchain can do for our world, but how many projects actually enhance existing industries? Some are too out there, and some aren’t exactly applicable, although incredibly innovative.
But there are crypto platforms and companies that are already transforming the way real-life issues can be addressed — and VeChain is undeniably one of them.
What Is VeChain?
VeChain is a crypto project that set out to fix some of the fundamental problems in the supply chain management industry. Primarily, it addresses the lack of transparency and solves major data hurdles at every step of the supply process. It does this by setting up trustless communication and data transfer with the help of distributed ledger technology.
To put it simply, VeChain both simplifies and makes the supply chain process more transparent. It connects all the different companies involved in transferring and creating products and services in a trustless way.
History of VeChain (VET). Who Created VeChain?
VeChain was founded back in 2015 by the former Louis Vuitton China CIO Sunny Lu. Originally, it was just a subsidiary of another blockchain company called Bitse.
Its token was known as VEN, and it was based on the Ethereum blockchain. Later, it rebranded to VET and transitioned to its own blockchain — VeChainThor — where the project exists now.
How Does VeChain Work?
VeChain lets manufacturers place specifically designed tags on the products they make. These tags (sometimes, they can also be sensors) are designed to record various data onto the VeChain blockchain.
The information recorded by VeChain can be used to control things like quality, temperature, authenticity, and so on. These details can be accessed in real time using the project’s own software tool (VeChain ToolChain).
The VeChain foundation works with businesses of any size. The project’s team has specifically designed the platform to be accessible for users of all kinds of experience and knowledge of blockchain technology — so there are no entry barriers.
VeChain’s Blockchain Platform
The VeChain Blockchain, also called the VeChainThor blockchain, is quite advanced: it has smart contract functionality and dApp capabilities.
Dual Token Economy
The VeChain blockchain operates using two tokens: VET and VTHO. VET, the cryptocurrency this article is about, is used to carry value. Therefore, it is used by dApps that want to make transactions on VeChain’s blockchain.
Its other function is rather simple: VET generates VTHO, the second token that belongs to the platform. VTHO, short for VeChainThor Energy, does exactly what that title suggests: powers the blockchain.
Governance
VeChain uses a proof-of-authority consensus mechanism. This means that governance is based on VET holdings and “disclosure.” Basically, VET holders that passed KYC and have 1M tokens in their account get 30% of the votes, while holders with the same amount of funds but without KYC verification get 20%.
VeChain Use Case Examples
Let’s take a closer look at some use cases of the VeChain platform. Here are some of the things it can help track:
- Quality
- Storage temperature
- Transportation medium
- Authenticity
These things are vital for almost any product, but the field that probably benefits from them the most is medicine. Pills often have to be kept in very precise conditions, and if those are broken, the medicine may no longer be safe for consumption.
VeChain uses smart chips to track medical packages from the manufacturer to your pharmacy to ensure they are authentic and safe for consumption. With VeChain’s real-time updates, both the manufacturer and the customer will be alerted if, for example, a drug gets stored outside of its recommended temperature range.
The data provided by VeChain is useful not only for tracking statuses and measurements but also for keeping an official ledger in case of insurance or legal disputes.
The Pros & Cons of VeChain
Every cryptocurrency project has its pros and cons, and VeChain is no exception. It offers things others don’t and is already ahead in its partnership game. And yet, it does have some downsides, too. They can be important to consider if you want to invest in the token.
Pros
Partnerships
VeChain has a lot… a lot of partnerships. And many of them are with major companies, too.
VeChain does not just partner with potential clients, no: it also works with companies that can help it with technological research in the industry, like Amazon Web Services.
High market cap
Although this is not directly related to the project, VET being a top 50 cryptocurrency by market cap is a great sign. It shows that a lot of people have put their trust in the project and the VET coin.
Cons
(De)centralized?
The VeChain team has stated that it aims to reach a balance between centralization and decentralization — which isn’t an easy thing to do. By trying to side with both teams at once, the project might become a jack of all trades but a master of none.
Blockchain technology fans will be disappointed about needing to disclose their identity to get extra benefits in governance, and centralized authorities may become concerned about insufficient verification. So far, VeChain has been managing this issue well, but only time will tell how it will be resolved in the future.
Business only
VeChain as a project is relatively inaccessible to the average user — after all, it only works with businesses. As a result, its potential pool of interested audiences in the crypto space may naturally be smaller.
How to Buy VeChain?
You can buy VET tokens on most major exchanges like Coinbase or Changelly. It’s really easy — just make sure you have a crypto wallet that supports this token first. Both hardware and software wallets are okay, but we would recommend against using exchange wallets.
The Future of VeChain
The VeChain project has quite a bright future ahead of it, at least based on what we can tell about it now. It is smart about its partnerships, manages its token well, and continues to innovate. As long as it stays on this path, it should be able to keep growing.
Another thing VeChain has going for it is its real-world applicability. Unlike many other crypto projects, the VeChain ecosystem does not just exist within the realm of blockchain and digital assets and can be successful even if there is volatility or downturns in the market.
Check out our VeChain price prediction to get an idea of how the VET coin might behave in the future, but please remember that it does not constitute financial advice.
FAQ
Why is VeChain special?
VeChain aims to enable efficient data transfer and solve some of the issues plaguing complex supply chains. Unlike other crypto projects, it uses blockchain to support existing industries and traditional companies.
Is VeChain a good investment?
If you want to buy or trade VeChain, make sure you’re okay with the risk and that it fits into your portfolio first. The VET token has a good reputation and a high market cap, and the project has a lot of support.
Is VeChain partnered with Amazon?
Yes, VeChain and Amazon (specifically, Amazon Web Services) partnered to develop eco-friendly supply chain solutions in 2022.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.