14 August 2020
In late July of 2020, Sunny Lu, the CEO of VeChain, issued a bold, and what some believed to be overambitious, claim that his platform will be bigger than Ethereum.
Ethereum is the pioneer smart contracts platform, and one of the most established cryptocurrency networks. However, what is it about VeChain that made Sunny Lu have such a bullish attitude on its growth?
What is VeChain (VET)?
At its core, VeChain is a duo-token public blockchain that derives value from the activities of its ecosystem’s members. The platform says it solves real-world problems, and its products are better because of the path they took.
Their goal is not to attract the ordinary retail user but rather the demanding enterprises and business with timely execution and better services.
VeChain wants to transform the procurement and supply chain industry. This project has its sights focused on this segment of the global economy. And rightly so, VeChain was initially designed to weed out fakes and knock-offs.
Its solutions are designed to record verifiable events at each stage of the supply chain, considering how broad the industry is and the near-infinite moving parts that complicate traceability. This is where VeChain finds its roots.
Meshing the Physical and the Digital
To execute these daunting tasks, VeChain combines two approaches to ensure that physical records tally with those saved in the high throughput blockchain, thereby minimizing fraud.
From production to delivery, each product is given a unique identity via the VeChain Identity (VID). Sensors are then used to record and track events at each stage of the supply chain, enabled in its first Internet-of-Things (IoT) layer.
VID is created through a “mining” process, meaning each identity tag is unique to the product and hard-coded in the transparent blockchain. Sensors installed along the supply chain are designed by VeChain and manufactured by leading manufacturers at Bosch.
Because of “mining”, partner businesses must operate a VeChain node creating an exclusive and private ecosystem that is perfectly suitable for privacy. This feature is very attractive to businesses. With a verifiable and tamper-proof identity secured by the blockchain, there is a stronger trust system right from shipping to warehousing.
The Role of VET
The smart contracting layer of VeChain is where a digital and physical transfer of the tagged asset is approved. Here, participants can confidently exchange ownership and pay accrued fees using VTHO, a token received when staking VET.
VET is the main token, but retailers can’t mine it. Instead, the coin can be bought at different exchanges and used to stake for VeThor (VTHO) through the network’s staking system.
VET is primarily used for payment, while VTHO is for businesses that want to access the supply chain ecosystem. VTHO is like a pass for these companies who want their supply chain records registered in the VeChain blockchain.
By blending rigor and transparency in the traceability of products, VeChain makes supply chain management simpler. This is why it is described more as a Blockchain-as-a-Service (Baas) because of its effort in product traceability.
In the end, a consumer can easily determine the authenticity and quality of the product. While manufacturers can be confident that their products were handled carefully at all stages of the supply chain.
A standout in the last few years has been VeChain’s solid track record and their delivery on several promises. It continues to strike desirable partnerships with authorities and renowned companies like BMW and Renault.
Such partnerships are crucial to making VeChain a true world-beater. Supply chain and procurement are competitive sectors with many established companies.
VeChain has the vital hurdle of proving its competitive edge over such competitors to have an enduring footprint in this lucrative sector.
Blockchain efficacy in supply chain management is an idea that has finally come to fruition. VeChain actualizes this utility. The transparency of an immutable ledger is one that this industry could use. In the future, the project’s leadership will have to chart this platform’s course. If done right, maybe, just maybe, VeChain could end up eclipsing Ethereum. The stage is most certainly set for this platform to transform the commerce industry.