Table of Contents
What is VeChain?
VeChain is a blockchain designed to revolutionise the contemporary supply chain management structures that are being utilised by using foremost multi-billion greenback corporations around the sector. Founded in 2015, it aims to harness the unique decentralised electricity of public blockchain generation to record the complete delivery chain system of groups. The transparency of facts now not best allows for higher management of the delivery chain manner but also guards towards counterfeit items and offerings that account for billions of greenbacks in losses for businesses globally.
VeChain has designed and developed all the infrastructure needed for the entire supply chain to be tracked on its blockchain. VeChain has hardware such as NFC and RFID chips, which can be embedded in goods, allowing users to track and record data of goods as they progress through the supply chain process. The recorded information is all performed in real-time and is traceable and immutable. Businesses can use this information to better manage their supply chain process, while consumers can use this information to make better purchasing decisions and not get misled by merchants selling counterfeit goods.
Primary Use Cases of Vechain
In the luxury goods industry, where counterfeiting is a major problem worldwide, VeChain has partnered with Louis Vuitton to uniquely tag their luxury goods. Information such as the leather source, completion date and ownership of goods are recorded. Consumers can not only use the VeChain system to verify the authenticity of their purchased products, but the system also allows for the transfer of ownership from boutiques to consumers, and also between consumers in the secondary market practically eliminating the unknowing purchase of counterfeit products.
The food industry is also particularly rife with counterfeit products and VeChain has partnered with Walmart China and Foodgates to combat this problem. RFID chips are used to tag animals, recording their location and date of meat processing. Customers can scan the product to obtain all the recorded information to determine the freshness and quality of the products.
The automobile industry can also benefit from using VeChain. Information such as car location, distance travelled and servicing records are all transparent and accessible to businesses and consumers. This helps guard against odometer fraud, unaccounted repairs and negligent car servicing. VeChain has partnered with BMW to implement the VerifyCar digital car passport system, which monitors the cars from manufacturing to servicing and repairs. With this system, businesses such as car manufacturers, insurance companies and also consumers can obtain information about a car’s history, thereby protecting themselves against any costly mistakes due to misinformation when purchasing a car.
How does the Vechain Blockchain Operate?
A consensus mechanism, which enables every component of the distributed “ledger” to confirm data and make sure it agrees with each other, is necessary for all blockchain systems.
The proof-of-work and proof-of-stake consensus processes are the two most popular and extensively used ones. Nevertheless, VeChain’s blockchain does not make use of any of them.
Rather, VeChain employs a mechanism known as proof-of-authority. To validate transactions in this system, verified validators known as Authority Masternodes must reveal their identities, complete a KYC procedure, and fulfil other standards established by the VeChain Foundation.
VeChain (VET) and VeChainThor (VTHO) are the 2 precise cryptocurrency tokens used by the VeChain challenge. This makes VeChain better perfect for corporate usage by making sure a mile extra degree of charge stability and preventing transaction charges from being impacted with the aid of token fee fluctuation.
VET is used as a way to transfer value within the VeChain ecosystem while VTHO is used for transaction fees and is generated as a reward for running proof-of-authority nodes.
Tokenomics & Price Potential
Potential investors must comprehend the token omics of any cryptocurrency. As previously indicated, Vechain uses a utility token architecture, with $VET acting as the network’s native coin. 72,714,516,834 tokens of the 86,712,634,466 tokens that make up the entire supply of $VET are now in circulation. With a price of just $0.028 as of January 20, 2024, Vechain has a market capitalization of $2,068,160,764, ranking it 45th out of all cryptocurrencies.
Using a simple crypto market cap calculator we can project the potential price and market cap if $VET was to perform a 10x from today’s price. $VET would reach a price of only $0.28 and have a market cap of $20,642,226,124. On April 19th 2021 $VET reached this price and market cap so this price prediction would only bring it back to its once all-time high.
Pros and Cons of Vechain
Pros of VeChain
In contrast to some blockchain projects that have purely theoretical use cases, VeChain has identified important real-world applications, demonstrated promising implementations, and even has its solutions in use by some businesses and customers.
The validation VeChain has received through some well-known business partnerships is also a reason for optimism about VeChain’s future.
Finally, with its founding in 2015, VeChain has already outlasted many other flash-in-the-pan crypto projects that have held so much promise but failed to deliver and are led by an experienced and well-organised team.
Cons of VeChain
For a lot of crypto enthusiasts who place great importance on the decentralization and anonymity that cryptocurrency can offer to users, getting on board with VeChain might prove against their core principles.
Users who want to run authority nodes and have a greater say in the project’s governance have to disclose their identity by going through a KYC process. In the future, some of VeChain’s partners may eventually demand even greater and stricter verification protocols in place.
Finally, with its focus on business supply-chain applications, VeChain may not be able to generate the level of interest from individuals which may in turn cause other cryptocurrencies to see huge gains in value while Vechain stagnates in terms of price performance.
Conclusion
VeChain stands out as a robust project, particularly in its application within supply chain management, showcasing significant potential if widely embraced as the preferred solution for businesses. In an era where cryptocurrency and blockchain technology are rapidly growing, with an increasing number of businesses seeking to integrate and explore this nascent technology, VeChain holds a leading position in the supply chain sector. Nevertheless, individuals must conduct thorough research before investing in cryptocurrency projects, given the industry’s youthfulness and susceptibility to substantial volatility swings.
