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What Is VeChain?
Unlike most projects in the crypto world, VeChain isn't about decentralised finances. It is an innovative and unique supply chain platform that uses blockchain technology to make supply chains and logistics more efficient and transparent. The goal is to become an "internet of things."
VeChain offers trustless, transparent automation in logistics monitoring without weak point or control entity, which enables more safety, efficiency and traceability for products in the supply chain. This is done by marking products with a smart chip that automatically updates the public blockchain with information about how and where the product is stored and shipped.
Counterfeiting is a major reason why this sort of technology is needed. In 2013, there was a huge scandal in Europe where most beef actually turned out to be horse meat. Food products, designer labels, and even pharmaceutical drugs are very often victims of counterfeiting. With VeChain's technology, this couldn't happen, so there is great demand for it.
The project originally started on the Ethereum network, but it soon moved to its own blockchain. The VeChainThor blockchain uses two separate crypto tokens; the VET token and the VTHO token. The network can be used as a platform for smart contracts and DApps with a focus on supply chains.
Whats the Point of the Technology?
With VeChain, supply chains become more transparent and efficient. The way this works is by simply marking products with a tracker called a VeChain smart chip, which updates the blockchain with information like where the product has been and how long it was where.
Businesses, as well as their customers, will know exactly where their product was produced, when it was made, which warehouse it was stored in, how long it stayed there, how and when it was shipped, what temperature it was stored at, etc. Once on the blockchain, this information cannot be altered, so buyers never need to blindly trust sellers.
With VeChain, you will know for a fact that your luxurious bag is real and not an imitation. You will know that the food you are buying hasn't been stored next to a radioactive power plant. In the near future, there will likely be apps that let you scan products conveniently with your phone to get this sort of information.
Companies also profit from VeChain because it helps them simplify their logistics. With VeChain, information would not need to be manually added into multiple programs, as is often the case. With VeChain, all important information is automatically saved and always up to date.
The VeChain technology is already being used by many different companies, many of which are household names and well-established businesses. Renault, BMS, Walmart, DHL, H&M and many more are already using VeChain. Even the Chinese Government has hinted at using VeChain to strengthen their health system with traceable supply chains to help to fight the coronavirus.
VET and VTHO tokens
The VeChainTHOR block chain uses two cryptocurrencies—the VeChain Token (VET) and the VThor Token (VTHO). Both tokens are needed to keep the blockchain going as well as to build and use DApps.
VET is being used to run the nodes, which are necessary to keep the network running. No VET means no VeChain. Holding VET also generates VTHO, which is being used for transactions and to fuel smart contracts and DApps. VET has a max supply of 86,712,634,466, and this number will not increase, so VET can be used as a store of value.
VET holders automatically receive VTHO. It is used to run smart contracts (AKA DApps) on the block chain and to send transactions. On Ethereum, users have to pay fees with ETH, meaning that if the ETH price goes up, so do the fees, VeChain's fees are independent from the VET price, which makes it easier to adopt in real life.
The more the network is being used and the more DApps are being built on it, the higher the demand for the VTHO token will become, and with that, the higher the demand for VET tokens will become because they are needed to generate VTHO. The value of the tokens is directly related to the activity taking place on the blockchain.
VeChain is making important improvements to an industry where quality is needed. The project is already being adopted by many well-established businesses, and the more users VeChain gets, the higher the value of the VET token will become. It could be a very good investment, especially since you gain a passive income in form of VTHO just by holding VET.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.