Crypto Spotlight: VeChain (part 1)
VeChain is an innovative platform making blockchain technology more appealing and beneficial for businesses around the globe.
Our Crypto Spotlight series is made to expose the most established, innovative and contemporary projects in the blockchain industry. We delve into the different moving parts of these projects to provide readers with a digestible, informative and engaging discussion surrounding the vision and technologies being used. Here, we will take a look at the VeChain creation to see how it is making business owners rejoice.
The VeChain platform is an intricate and complex machine with multiple turning cogs. When learning about this platform and its technologies, there is a lot of information to take in. But don’t hide behind your desk chair or sofa just yet. With our help, you can be guided through each cog to grasp a beyond-superficial understanding of this platform.
The Main Aim of VeChain
Even though VeChain has multiple ambitions, it has one overarching aim – it wants to bridge the gap between advancing technology and global business needs.
Some blockchain ventures have been caught red-handed for advancing technology without purpose or real-world application. This does not deny that these ventures have advanced technology quite remarkably but finding purposeful and significant benefits of such technology leaves us scratching our heads. On the other hand, VeChain continually returns to its core objective of making its technology an attractive adoption by enterprises due to its worldly benefits. Noah Huo, CMO of VeChain, has stated that the success of the technology will be based on its integration and usefulness within the ecosystem of enterprises.
So, What Does VeChain Do?
VeChain’s earliest implementations were made to track quality wines. This was done to aid authenticity checks of bottles of wine that were produced in Europe and shipped to Asia. Naturally, this also points to other product-based uses for the platform’s technology.
Expensive items such as designer purses and handbags often become victim to counterfeiters. Thus, businesses are losing out on selling their products to illegal groups who sell knock-offs to retail outlets and consumers. Through adding NFC chips to luxury products, each item receives a unique ID. This ID is digital and kept on the blockchain readily available to be verified for authenticity through scanning.
VeChain has fingers in other pies as well. It is creating decentralised applications known as DApps. These DApps will play an influential role in developing a token system which can be applied to business processes. They will offer practical and timely solutions for businesses. Once again, dissolving the boundaries between blockchain technology and real-world uses for businesses.
Along with these DApps, another important aspect of VeChain lies in hardware which is physically embedded into products. This is to track conditions of the respective products during manufacturing and even shipping. These chips are complemented by the presence of IoT sensors. Such sensors are capable of recording and tracking conditions like humidity and temperature – and come in useful when monitoring medical supplies or foods and drink. They are especially useful when needing to track their condition during distribution.
Auto Industry Solutions
The end of VeChain’s capabilities to enhance business protocol, and product and consumer safety, appears to see no bounds. The technology is also useful within the automotive world by creating a somewhat “vehicle passport”.
These vehicle passports are similar to the ones we use to jet off to sun-drenched resorts to in the summer. They store unique information specific to that vehicle and track data as time progresses. Specifically, these passports can store a range of information, including mileage, insurance and maintenance records, a history of repairs and even driving behaviour. This is extremely beneficial to those purchasing a second-hand vehicle and want to consult seller claims against actual facts. It is also an important step in preventing mileage readings being faked to increase vehicle market value.
This is another instance where VeChain has the business world and consumers as their main considerations. With a moral objective of preventing fraudulent crime and behaviours, it harnesses the blockchain to maintain transparency and guarantee authenticity when people need it most.
Why These Objectives?
The aforementioned core objectives of VeChain stem from the past of its CEO, Sunny Lu. The blockchain pioneer had first-hand experience of the issues facing businesses and consumers regarding fraudulence and counterfeiting when working at high-profile brand, Louis Vuitton. These experiences propelled Sunny Lu to set out on a venture with the objectives and goals you see in VeChain. However, the platform does have other aims too, which we will return to in part two of our VeChain series.
How Does VeChain Work?
Now we have outlined the main objectives of VeChain, it is time to take a wander through their technical department and see how some of their cogs turn.
The platform makes use of two types of tokens. It uses VET (VeChain Token) and VTHO (VeThor). VET tokens are adopted for storing and transferring a value in the economy and to record data, while VTHO is the fuel for verification processes that are needed by partnering companies.
The problem: as many readers will already be aware of, blockchain transaction fees can be volatile and highly unpredictable. This raises concerns for businesses wanting to make use of the blockchain to enhance business processes.
The solution: the second token, VTHO, counteracts these issues. VTHO has been created to remain stable and lack scarcity as it can be injected at large quantities into the economy, as required. VeChain possesses a large number of VTHO and VET to act like a VTHO reserve. This is how they improve price stability.
The Dividend Factor
Just like a dividend in traditional markets, VET generates VTHO. This not only circulates “fuel”, but also works as an incentive for businesses that have accumulated VET. Businesses are therefore able to cover transactions by simply holding VET – or buy VTHO at stable prices.
The Business Appeal
VTHO tokens are an innovative way of reeling businesses to the blockchain, who otherwise were discouraged from cryptocurrency adoption.
This is a step in the right direction. Yet, many businesses may still be reluctant to join the VeChain revolution due to a lack of knowledge or inconveniencies regarding handling, storing and exchanging cryptocurrency. This remains a barrier in getting businesses to jump on board the VeChain ship to their corruption-fighting destination.
However, VeChain has also thought of this obstacle as well and started building the foundations to appeal to more enterprises. They developed MPP and MTT protocols to make blockchains transactions recognisable to regular transactions. So, what does that mean?
What Is MTT?
MTT is a process that enables an individual to send multiple transactions as one large transaction. These multiple transactions are termed “clauses”. Not only does this reduce transaction costs, but it is also often more convenient for both the sender and receiver.
But What About MPP?
MPP may even have more of an appeal factor to businesses. MPP is a protocol which allows more than one party to handle their transactions. This means clients are not required to contend with paying fees. Instead, network fees may be operated through a sponsored agent using smart contracts.
In essence, third parties may pay for transactions, enabling businesses to reap the benefits without getting involved with processes. It is quite possible that a business could operate without ever knowing that blockchain technology is being used. Transactions would be seamless and handled behind the scenes by sponsored agents and VeChain.
The uses of this system are surging throughout the world of business for the greater good – as will be explored in the next helping of our VeChain series.
Stick Around For More On VeChain!
Would you leave a restaurant after your starter? We thought not. Stick around for your main serving and more engaging content on the VeChain platform.