For today’s article, I am taking a look at VeChain, a different kind of project as it’s blockchain is used to store data, as opposed to just being a ledger for transactions like most of the other projects out there. It has pretty good utility for managing supply chains so it’s worth having a look at.
As a quick note, I am adjusting my posting schedule to allow more time for researching some more in-depth articles, so going forward I will have posts coming out Mondays, Wednesdays and Fridays. Wednesday will still my weekly price analysis, with Monday and Friday being when I post out my normal articles.
For the usual disclosure, I am not a financial advisor, I don’t even work in finance at all. My day job is as a telecommunications software engineer. Treat everything you read here as some educational resources and not financial advice.
At it’s simplest, VeChain is a blockchain that companies can use to store data in order to facilitate tracking and management in a way that is immutable. It can be used to help identify inefficiencies in your supply chain, and even help locate fraudulent activities.
Companies can use technologies like RFID to track items in a shipment, and instead of storing this in a database that can easily be manipulated, it’s stored on a blockchain, where it become virtually impossible for someone to go and change say a quantity of received items to later pretend some “fell off the truck”, as they would have been scanned and tracked in an immutable way.
This data can then be analyzed to help find places where shipments may be getting delayed, or a warehouse not pulling it’s weight. It can be used to track potential health hazards in the case of food shipments being tracked. You could use the data stored here to validate a product is actually legitimate and not a fake as well, in the case of designer clothing which often falls victim to counterfeits being sold.
Basically, anything a large company may want to be able to learn about how it’s raw materials and products are moving around, being assembled, and being sold to consumers, you can store and search it using VeChain.
VeChain started off by storing it’s data on the Ethereum and used an ERC-20 token called VEN as it’s currency. In June 2018, it moved to it’s own blockchain and adopted a native crypto VET. This base currency is used to pay for the services, but unlike Ethereum, it is not used to pay for transaction fees.
They have actually separated the gas fees off onto it’s own VTHO token. They separated these out to help stabilize the prices, and let companies pay a consistent fee for using the service. As businesses are the primary customer targeted by VeChain, having a reliable and consistent fee is necessary.
For it’s consensus model, VeChain has gone with a Proof of Authority system. As the primary users are all businesses, and they are more concerned with speed and reliability over say decentralization, this works well. It works similar to a Proof of Stake system, in that there is a small subset of the nodes that get to be block producers, but they are not selected by “who has the most staked in their pool”, but are chosen by the VeChain foundation.
Now, they don’t get off scot free, and they still have to stake a large sum of crypto to be eligible to be an authority, to help ensure that the validators are working in the best interest of the network. This sits at a tune of 25 million VET tokens, which translates out to just under $3 million USD at current market price as of the writing of this article, which is a pretty substantial amount.
While VeChain is not a service end users are going to find a lot of use for, it has some pretty good utility out in the business world. It’s growth has been hampered in the last year, but the global supply chain issues caused by the pandemic and other factors, as companies have pulled back and been reluctant to adopt new technologies while also fighting the supply shortages, I think the long term potential is there for this network to do good things.
That being said, with the very narrow focus of what they do, I also don’t see a whole lot of growth potential in their cryptos, from an investment standpoint. I think the price will of course increase over time, as the demand for the service goes up, but it won’t be the same as we see when crypto gets adopted into say a payment service.
It’s a very good service, and for any businesses that are looking to up their supply chain management, I’d very much recommend it, but as an end user consumer, I see it more as an interesting project to watch, than something I would want to invest in, but hey, I’m not your financial advisor, so if you think the price is going to explode, don’t let me stop you.
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Want some more content right now? Check out some of my previous posts:
Potential Community DeFi Project
A few referral links, in case you are interested in the service, and it also helps me out.
Binance – large centralized exchange – referral link saves you 10% on trading fees
Coinbase – basic crypto exchange – referral link gets you bonus crypto on first deposit
Cointiply – very good crypto faucet and earning site – no bonus for you on this referral unfortunately
Originally Posted On My Website: https://ninjawingnut.xyz/2021/08/30/vechain/