Hey everybody, welcome to a new episode on BLOCKCHAIN CENTRAL! Today I want to introduce to you VeChain. It was founded in 2015 in Singapore. The project is commonly known as the Ethereum for business. VeChains vision is to build a trust-free and distributed business platform.
The goal is to enable transparent information flow. Efficient collaboration and high-speed value transfers are also planned. Overall it tries to fix the biggest issue of supply chain management. The problem is tracing products from the point of origin to the point of consumption.
With the help of VeChain, production and supply chains should become transparent. This is true for all market participants. Those are companies, suppliers, retailers, and consumers. VeChain wants to make blockchain ready for mass adoption. For that, they created the VeChain Thor blockchain network.
It went live in July 2018. The network features new economic and governance models. VeChain Thor combines two main functions: Smart Contracts and IoT. Smart Contracts help to automatically trigger actions on the blockchain. It follows the “if-then principle”.
Thus, a certain condition can trigger a payment. On the other hand, VeChain uses state-of-the-art IoT solutions. This helps realize the interface of the VeChain Thor blockchain to the real world. Technical solutions such as RFID tags, NFC chips or QR codes are used. RFID chips are tiny chips that transmit data in form of radio waves. They are also used in contactless credit cards.
NFC is a similar technology which most phones have. It is used when paying by smartphone. These two features help companies to track products in a digitized supply chain. For example, imagine the following scenario. You are the head of a big fishing company. Your customers care about the quality and the freshness of your fish. However, you rely on the logistics company and the grocery store.
They need to handle your fish in the right way to deliver your promise to customers. With VeChain your product gets tracked along every step of the supply chain. RFID tags or QR codes record at which time the product arrived at which place.
IoT sensors can, for example, check the temperature and humidity. This information is then saved on the tamper-proof blockchain. It enables you to closely follow the product journey and the quality of your product. Customers yield a lot of benefits from VeChain, too.
They can scan a QR code on the product. The VeChain app then tells the customer about the quality of the product. As the blockchain is immutable, fraud is easy to detect.
This has a lot of potential for medical drugs and luxury goods. Both industries suffer from counterfeits. So, with the VeChain blockchain, companies can closely monitor their supply chain. Monitoring can now extend beyond the compounds of the factory. Customers can check the quality of their product and are protected from counterfeits. This helps the company to gain trust and establish a business relationship.
But this is not the only thing VeChain can do. According to the VeChain whitepaper, the blockchain will support the development of dApps. dApps are distributed apps. On VeChain they have a B2B focus. ICOs can also be launched on VeChain.
Finally, the platform can host blockchain-as-a-service applications. To support all this, VeChain is fast. The block creation time is one second. This gives the network a capacity of 10000 transactions per second.
In the VeChain ecosystem, two cryptocurrencies are in circulation. The first one is called VET and is used for transactions and smart payments. It also incorporates voting right for the networks governance structure. VET can be staked.
Staking means putting VET into a dedicated wallet and not using it. It then generates interest payments in form of Thor Power Tokens. This is the second currency. Adding information to the blockchain costs Thor Power Tokens.
In this process, 70% of Thor Power Tokens are eliminated. The other 30% go to the validation nodes as a reward. This dual currency strategy is supposed to keep the VET token price at a stable rate.
It prevents price fluctuations that are harmful to customers and businesses. In general, the VeChain Thor network has the potential to attract large enterprises and small business. They all can conduct transactions via the blockchain.
VeChain is so attractive to businesses because the team tried to focus on their needs specifically. I hope you enjoyed this video. Don’t hesitate to read the VeChain white paper for further information. Please feel free to leave your thoughts on VeChain in a comment below.
Before you go, please note that this content does neither represent financial, legal, or tax advice, nor is it supposed to be understood or interpreted as a solicitation to buy or sell any securities, coins or tokens.