Coin Review: VeChain
What is it?
VeChain is a blockchain platform with extremely ambitious goals to develop a distributed ecosystem for businesses that will enable the movement of transparent and secure data, resulting in a more visible, trust-free, and collaborative system of business across numerous industries. If successful, the project will have extraordinary effects on how we (businesses and consumers) interact with products, information, and each other. Established in July 2017, the non-profit VeChain foundation is currently comprised of over 150 team members and is led by CEO Sunny Lu, who has over 15 years of experience leading IT projects. His most notable position is as former CTO and CIO of Louis Vuitton. What primarily sets this platform apart from others, and gives validity to its ambitiousness, is that the VeChain foundation already has customers using a working product and also that the foundation has made more partnerships than almost any other blockchain platform.
In a basic sense, VeChain enables items to be tracked through a public supply chain by combining blockchain technology and custom built smart chips (utilizing RFID tags, NFC chips, or QR codes) to track an item throughout its entire lifetime. This technology is already being applied and tested in several industries such as luxury goods, automotive, agricultural, food and drug, logistics, auditing, and even in governments. For many of these industries, the VeChain technology enables a person to simply scan a smart chip attached to the item in order to view those items entire history. Essentially this allows us to verify that a product did indeed come from a specific location or place that it should have come from in order to be legitimate. For example, one of the many companies that are using this technology is DIG Wine. DIG imports a third of all wine that comes into China and utilizes the VeChain NFC tags and QR codes to prevent counterfeiting and enable consumers to verify the legitimacy of their purchase.
While this new fusion of Internet of Things (IoT) technology and blockchain is currently being experimentally applied and used across industries, the old version of VeChain ran on the Ethereum platform. After rebranding and a recent main net launch, VeChainThor is now on its own blockchain, no longer relying on Ethereum. VET will rely on nodes to secure and maintain the ecosystem. There are four different types of nodes (three economic nodes and one authority node) and each of them will receive rewards in the form of a token called THOR, which will be the “fuel” or “gas” needed to execute smart contracts and run decentralized applications on the VeChainThor network. Though the amount of required VET is relatively high for each of the nodes, holders of VET will still receive daily THOR rewards. This is similar to the NEO platform where holders of the coin generate a secondary “fuel” coin called GAS. When THOR is used to run a transaction on the network, the 101 authority nodes will receive the same amount of THOR as economic nodes plus 30% of all THOR consumed by transactions. The other 70% of THOR will be burned, or permanently gone.
In terms of partnerships, the VeChain Foundation has an impressive list of notable and established businesses that see the VeChain ecosystem as a potential game-changer and have agreed to partner with them to use the technology. These companies have backgrounds all across the world with several diverse use cases. Some of the most notable partnerships are with: PWC (Big 4 accounting firm), DNV GL (energy, food/beverage, healthcare), BMW (automotive), DB Schenker (global logistics provider), Oxford University (academic, helping develop VET economic model), Yida Group (real estate), the Chinese Government, and several more.
On a final note, this has been a complex and thought-provoking dive into the VeChain ecosystem, but we have barely touched the tip of the iceberg. The VeChainThor blockchain will attempt to disrupt almost every industry using a variety of techniques, however, this technology is still in its infancy and will probably not mature to the point of mainstream adoption for years. Furthermore, with many competing platforms (Waltonchain, Ethereum, NEO, etc), there is no guarantee that VeChainThor will come out on top, but with a sizeable and experienced team, a large amount of significant partnerships and functional hardware, it would be senseless to not keep an eye on this ecosystem.