VeChain is a blockchain-based platform with specialized capabilities to enhance the processes entailed in supply chain management. It utilizes a tamper-proof distributed ledger technology to ascertain the authenticity and quality of the products bought by the users on the platform. Be it spare part replacements, servicing history, cost, inventory level or anything else, all information about a product in the supply chain management system can be securely recorded for all participants of the platform.
- It aims to build a trust-free and distributed ecosystem based on blockchain technology for a transparent flow of information, high speed value transferring, and efficient collaboration.
- It plans to achieve secure supply chain management solutions through asset digitization.
- The platform enables product manufacturers to assign unique identification to each available product in their inventory. This way, all stakeholders, including customers, manufacturers, and supply chain partners will be able to track the movement of the products in the supply chain at any point in time.
The supply chain is a large industry with several moving parts. Elementally, supply chain entails everything from seed to sale, farm to table, retail stores, manufacturing, and manufacturing to shipping. Simply put, everything pertaining getting everything you purchase, from electricity to food, gas, luxury items, as well as even drugs has a supply chain.
What is VeChain Thor?
VeChain Thor, a dual-token, BaaS (Blockchain-as-a-Service) platform, was originally built on the Ethereum smart contract network to offer services to enterprise users. The platform’s mainnet launch occurred on the 30th of June, 2018. The project focuses fundamentally on the supply chain, as well as on delivering IoT (Internet of Things) solutions. Whereas VET is VeChain Thor’s proprietary crypto coin, the VTHO token’s use entails paying for tokenized transactions.
VeChain uses a proprietary smart chip to implement QR codes, NFC chips, and RFID trackers to bring enterprise Internet of Things aboard the blockchain.
VeChain Technology and how the Platform Works
- Supply Chain Management & Anti-Counterfeiting
In its present form, VeChain is all about capacitating manufacturers to effortlessly gather and manage data regarding a commodity throughout its life, as well as share this with vendors and customers.
The latter can help make better the manner in which businesses manage their supply chains. It as well alleviates the possibility of consumers being swindled into purchasing counterfeit products.
VeChain realizes this through the digitization of physical items and caching the information regarding the items on the blockchain, updating this data as the commodity through the various stages of the supply chain. As such, at any particular point in time, a user is in a position to look up an item and get to see particularly where it has been as well as what has happened to it.
Businesses implementing VeChain assign unique IDs to their items and write this data into VeChain’s blockchain network as well as into some kind of tag attached to the product. The latter could be achieved utilizing an NFC chip, an RFID chip, or a QR code, being contingent upon the particulars of the item or product in discussion.The tags are attached in such a manner that interfering with or damaging the tag will as well tamper with the product.
Each party involved in the product’s life is allotted a private key for the item, enabling them to update the product’s details as they handle it.
Consequently, in the event the product is received by the consumer, they are able to use VeChain’s application to scan the tag and have a view of the full history of the product. So far, they are in a position to ascertain it is real, and learn more about the other details as regards the product.
- The Tokens
- VET (VeChain Tokens):
VeChain Tokens (VET) are used as medium of value transfer between accounts. They are used to determine the significance of an account on VeChain in the sense that accounts with larger holdings are given more priority as compared to those with lesser holdings, and they generate the THOR Power tokens.
THOR Power is generated at a rate of 0.00042 THOR per VET per day. The implication of this is basically that roughly 2,381 VET tokens are required to generate 1 THOR per day.
- THOR Power:
THOR Power is needed to pay for the execution of smart contracts as well as run decentralized applications (dApps) on the blockchain. Every time these payments are made, 70 percent of the THOR is destroyed. Consequently, the remainder is given to the nodes that operate on the network.
- The Nodes
- Authority Nodes:
VeChain Thor is run by 101 Authority Nodes, referred to as Thrudheim Nodes. It is these nodes that receive the data that is to be incorporated into blocks and generate the blockchain.
To become a ThrudheimNode is extremely difficult as one will need at least 250,000 VET to even be considered. Most significantly, accounts with adequate VET will undergo vetting by the VeChain Foundation to make certain they fulfill the criteria prior to being qualified a Thrudheim Node status.
Nonetheless, there are significant rewards available for authority nodes, for instance, an enhanced voting right in important decisions, a share of the VeChain Foundation Thor Power Rewards Pool, and access to the 30% of unburned THOR tokens.
- Building the Supply Blockchain (Supply Chain 3.0)
VeChain Thor isn’t the most consumer-friendly blockchain name, and they don’t care. The average person isn’t the target demographic for this blockchain. VeChain Thor’s team has a strong pedigree in enterprise supply chain management, and that’s where this platform has its roots.
Digital ledgers are used throughout the supply chain, from manufacturers like Clorox and Cintas to distributors like FedEx and the United States Postal Service and retailers like Best Buy and Walmart. A well-functioning company in this sector has a 98 percent fulfillment error rate using present technologies.
Such technologies as Near-Field Communication (NFC), Quick Response (QR) and Radio Frequency Identification (RFID) are implemented to track products and supplies throughout the process so everything is accounted for.
Undoubtedly, any Six Sigma expert worth his or her Black Belt knows 100 percent is the only acceptable quality rating, but 99.999… percent is acceptable for as long as you constantly strive to add another 9.
Be that as it may, the current technology is not able to attain such limits, and that’s why the VeChain Foundation moved this process to a distributed blockchain ledger. Using VeChain Identity (VID) to track each item creates a stronger trust system for shipping, receiving, as well as warehousing.
VIDs are generated by “mining” an SHA256 hash function. They are then attached to the QR code, NFC tag, or RFID tag to create an IoT digital twin.As such, the company is in the position tokeep track of the entire supply chain.
The 2nd blockchain layer is the smart-contract network. Here, legal ownership and possession of the digital and physical assets can be easily transferred from end to end using the familiar public/private key value transfer system of cryptocurrency.
As for VeChain network mining nodes, each business and organization using the system will run and maintain their own individual nodes, creating a private and exclusive ecosystem. Individual members of the public can’t mine VET, but they can buy it and stake VTHO through VeChain Thor’s Proof-of-Stake system.
The larger part of the discussion around VeChain Thor revolves around its supply-chain roots, but its strong partnerships with enterprise-level clients inspired the Foundation to expand into other business operations.
VTHO is generated via holding VeChain Tokens (VET) with velocity 𝑣, which is established to enable any user with VeChain Tokens (VET) to make transactions at no extra cost if the user holds the tokens for long enough.
Based on the VTHO generation model, we can estimate the supply and demand of VTHO for each given day and dynamically for one year after the VeChain mainnet is officially launched. The total supply of VTHO is calculated to be 37,459,858 each day with the current 𝑣.
The demand of VTHO includes smart contract execution and payment transactions. The VTHO demand from the former is estimated by the forecast from the business development team and the VTHO demand from the latter by comparable cryptocurrency transactions data in the past three months.
To stabilize the VTHO price and maintain the equilibrium of demand and supply of VTHO, the Foundation might adjust variables of the economic model when the demand is close to the total supply of VTHO.
Generally, the VeChain Token (VET) price consists of three parts: the present value of all future
VTHO generated; the present value of VeChain Tokens (VET) as a cryptocurrency; and the present value of the use of VeChain Tokens (VET) as value transfer media (or smart money) on the VeChain blockchain.
So far, VET’s all-time high stands at $9.55 USD, which occurred on the 22nd of January 2018, a time when it was an ERC-20 token running on the Ethereum blockchain network and was referred to as VEN. Upon the launch of the VeChain Mainnet (as it was referred to at the time), VEN was changed to VET at a 1 VEN: 100 VET ratio. What’s more, VTHO (similar to GAS on the NEO Network) is produced and awarded to holders of the VET token at a base rate of 0.000432 VTHO: 1.0 VET.
As of 9th November 2018, VET’s circulating supply rests at 55,454,734,800 VET out of the total supply of 86,712,634,466. Most noteworthy, there is no cap on the VTHO supply.
With all the above taken into consideration, in so far as price goes, the all-time high of VET thus far is $0.019533 USD which was attained on 4th September, 2018. On the other hand, VTHO on the 1st of August, 2018 hit its peak price at $0.040216 USD.
The VeChain Thor Initial Coin Offering (ICO) took place as from the 17th of August 2017 through the 17th of September, 2017. Most noteworthy, the ICO raised just about $20 million USD worth of ETH. May 25, 2018 remains in the books of history as the day when the launch of the very first Initial Coin Offering on the VeChain mainnet occurred, and it was called Plair, a VeChain-backed, blockchain-based gaming rewards ecosystem.
Digital currency markets that support VET are inclusive of Gat.io, Kucoin, Binance, LBank, DragonEX, Bitfinex, Huobi, and BitMart. The trading pairs of VET include; USDT, BTC, ETH, and such fiat currencies as the US Dollar. Just about $13 million USD worth of VET is traded every day.
Both VTHO and VET can be held on their official cryptocurrency wallet referred to as the VeChainThor Wallet, as well as the Ledger Nano S hardware wallet. Unless explicitly stated otherwise, holding VET in a cryptocurrency exchange does not accumulate VTHO.
The Team behind VeChain
VeChain implements a fascinating model of governance in which case they have endeavored to arrive at a balance between decentralization and a more efficient centralized governance.
VeChain is originally run by the VeChain Foundation, who are governed by the Board of Steering Committee. This board’s members are elected by VeChain’s stakeholders. Most significantly, the stakeholders comprises of various nodes on the VeChain network.
The Board of Steering Committee will be at the helm of functional committees focusing on various aspects of VeChain, for instance, the Technical Committee who work on R&D as well as Technical Support, or the Public Relation Committee whose focus is on business collaborations, public relations, and marketing.
The board presently in place is rather impressive, with the entirety of its members seeming very skilled with significant work experience in pertinent areas.In addition, the fact that a number of the members of the team work, or formerly worked at such notable organizations as Deloitte and PricewaterhouseCoopers (PwC), which are fundamentally huge accountancy firms that could benefit from the VeChain project, is impressive. Consequently, the latter implies that the team truly understands what they want as well as the needs of their target industries.
Needless to say, the executive is significantly important, but there are a lot more individuals other than the managers who involved in any project, and VeChain boasts a somewhat sizeable team in so far as cryptocurrencies are concerned.
As per their LinkedIn profile, the team comprises of forty three members, although there are reportedly as many as sixty employees currently employed by the VeChain Foundation. These individuals are laid out across a number of departments, from blockchain development to R&D of Internet of Things (IoT) devices.
VeChain has already picked up a number of impressive partnerships.
Here’s a few of them:
National Level Partnership in China
VeChain is acting as the official blockchain technology partner of in the development of Gui’an, a region set to be a testbed for innovative technology designed to improve administrative efficiency.
If the governors here like what they see, it wouldn’t be a surprise if they chose to roll out the technology across the rest of the country as well.
An E-Government system based on VeChain Thor’s blockchain technology has already been developed, designed to store business registration documents with the intention of eventually allowing for rapid and simple auditing.
Additionally, they’re working to build a blockchain-powered exchange for physical goods in the region, and VeChain believe they are nearing the ability to power an entire smart town in the Gui’an region.
VeChain is part of PwC’s incubator program, giving VeChain access to significant resources and contacts.
PwC is one of the world’s largest auditing companies, and they could greatly benefit from VeChain’s technology.
As a result, it’s easy to imagine them extending their relationship out of the incubator program in the future.
VeChain is working with DNV GL to assist with cold chain logistics, which is all about the transport of chilled goods that must be maintained within certain temperature parameters.
VeChain will integrate smart sensors into products, allowing for the temperature, humidity, and location of items to be recorded and monitored at all times.
Now, once goods reach a retailer, for example, they can easily look over its journey and be confident the items are safe to eat, improving customer safety and satisfaction.
There are several more partnerships already announced, with more likely held back by NDAs.
I highly recommend looking into some of these partnerships yourself, it makes for some impressive reading, and there’s really no other cryptocurrencies boasting the same level of connections.
Of course, many of these partnerships are still in the ‘proof of concept’ and development stages, with companies looking to see how VeChain could help them in the future. So, there’s no guarantee that the people they’re working with now will continue with them in the future.
However, it’s still very encouraging to see such high interest in the project, and VeChain has its foot in the door with many powerful and important companies. If they can impress them now, VeChain could be set for great things in the future.
Product & Traction
Bank of America made its vigorous expansion in the United States consumer banking market by buying regional banks. For quite some time, the bank’s customers in California, whose banks used the legacy COIN platform, were not in a position to use their debit cards at Automated Teller Machines outside of California.
A similar case was witnessed by the bank’s customers in Washington as well as Oregon. Nonetheless, the proprietary system used in the Pacific Northwest was quickly changed to Bank of America’s proprietary system.
Governments and enterprises that have been existent for a number of centuries have an abundance of computers running a profusion of proprietary software on legacy operating systems.
Owing to the fact that they normally have multi-million-dollar, multi-year contracts with their current 3rd party vendors, upgrading enterprise systems is no easy affair. Every single program was tailor-made for a particular platform, and most of the times these cycles of development take up 2 or more years to go through all the appropriate ratification processes.
The VeChain Thor project proved its concept with its present allies, which comprised of, among others, PwC, Healthcare Co Ltd., Xiamen Innov Information Technology Co. Ltd., Microsoft, Renault, and Babyghost, just to mention but a few.
The team came to the realization that they were not serving the entire supply chain up till they went ahead to further support the operations. Operational teams, for instance, sales and marketing, accounting, the c-suite, and accounting require real-time access to VID data. What’s more, all systems are required to be in a position to accept the data and present it.
VeChain is spirited to not only incorporate supply chain, but all aspects of enterprise as well. Most noteworthy, development is ongoing, and additional alliances are constantly being sought.
On the assumption that you are looking for a reputable information services provider and products company, VeChain scores all the brownie points. The organization boasts a good reputation among clients with its consistently high level of services. The company offers distributed data storage where information is stored in more than one node to ensure its integrity, security, and safety. VeChain ICO tokens are set to be well received by businesses whose core capabilities are related to the collection and dissemination of data. Presently focusing on the supply chain and information integrity solutions, the company’s management has plans to expand the platform’s reach to other industries in the future, based on its success in the current industry segment in which it competes.