With a long list of corporate partners and a native token (VET) that’s grown into one of the world’s top 20 largest cryptocurrencies by market cap (at the time of writing), VeChain is a blockchain platform that’s generated plenty of hype in recent times. Focused on data management and Internet of Things (IoT) solutions, and with plans to evolve into a platform for decentralised applications (dapps) as well, VeChain offers a wide range of real-world use cases.
Let’s take a closer look at the platform behind it all, how it works, and where VET tokens fit into the equation.
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What is VeChain?
VeChain is a blockchain company focused on products and information. In its own words, VeChain “strives to build a trust-free and distributed business ecosystem, which is self-circulating and scalable”.
Unlike many other projects in the cryptosphere, VeChain actually has a working product.
It involves assigning a product a unique ID and fitting it with a VeChain smart chip tracker, such as an NFC chip or RFID tracker, so that the details of any product can be collected, stored and easily reviewed. This allows businesses and individuals to track items through a supply chain, verify the authenticity of goods and combat counterfeiting, and VeChain’s technology is already in use in areas like cold-chain logistics, luxury goods, healthcare, fashion and a number of other industries.
However, with the scheduled launch of its own blockchain in Q2 2018, VeChain is also set to evolve into a platform for enterprise-grade dapps. This will see it compete with other dapp platforms like Ethereum and EOS.
Where to buy VeChain
VeChain to become VeChain Thor
In February 2018, VeChain officially rebranded to VeChain Thor. Much more than just a new name and logo, the rebrand was, in VeChain’s own words, a “full revamp from a private blockchain to a qualified decentralised application platform servicing public applications, on a decentralised ledger, capable of evolving how the world defines business ecosystems.”
All of which is quite a mouthful, but which refers to the fact that VeChain Thor will feature a new blockchain, known as the Thor blockchain. Set for launch in June 2018, the new mainnet will be designed for the creation and deployment of dapps.
It will also see VEN tokens become VET tokens, with a token swap scheduled to take place following the launch.
What are VeChain tokens (VET)?
The VeChain token (VET) is the native currency of the VeChain network and is used as a unit of exchange. These tokens are required to perform all transactions and services on the VeChain platform. The total supply of VET is 873,378,637, of which approximately 525 million were circulating at the time of writing (May 2018).
However, remember that VET tokens will soon become VET tokens when the Thor blockchain launches, and will represent the right to use that blockchain. The Thor platform will also use a second token, Thor Power (THOR). THOR can be generated by holding VET tokens, in much the same way that NEO holders generate GAS, and will be used to deploy smart contracts and applications.
What problems does VeChain aim to solve?
The main focus of the VeChain platform is on giving retailers and consumers access to reliable and accurate information on the products they buy and sell. This includes:
- Preventing counterfeiting by ensuring the legitimacy and quality of products
- Tracking products through the supply chain from start to finish to streamline supply chain management
- Providing more information to product buyers about where an item was made, how it was made and how it was shipped to the store in front of them
With the impending launch of VeChain Thor and its expansion into the world of dapps, the platform will allow businesses that integrate their business processes with the Thor blockchain to create and run their own applications.
VeChain has already announced some of its own dapps that will run on the platform, including:
- VeVid, a digital ID and KYC system used to validate members of the system
- VeVot, a voting system for businesses
- VeSCC, which will certify smart contracts on the blockchain
How VeChain works
To understand how VeChain helps track and manage product information, let’s consider the example of a bottle of wine. Using VeChain’s tracking and authentication platform, data about the wine can be collected at every stage of the production process and stored on the blockchain.
First, a unique product ID is created for the bottle of wine and it can be fitted with a tracking mechanism, for example a QR code or an NFC chip. Transportation companies can then update logistical details on the ledger as the bottle moves through the supply chain, and manufacturers can track their products right from the start of their life cycle until they reach the consumer.
The end result is that businesses and consumers can quickly access a wide range of information about the product simply by scanning its QR code or NFC chip, such as:
- When it was bottled
- Where it was bottled
- When and where it was shipped
- Whether it was transported at the right temperature
VeChain team and history
Founded in 2015, VeChain is one of the oldest players in the blockchain industry. With offices in China, France, Singapore and Japan, VeChain first started life as a subsidiary of BitSe, one of China’s biggest blockchain companies.
The project is also backed by the VeChain Foundation, which was established in Singapore in July 2017 as a non-profit organisation. CEO Sunny Lu has more than a decade’s experience as an IT executive in Fortune 500 companies, while CFO Jay Zhang has over 14 years’ experience as a senior manager with PwC and Deloitte.
VeChain has lined up several impressive partnerships to help drive future growth and adoption, including agreements with:
- PwC. In May 2017, VeChain became a portfolio company of PwC’s incubation programme “to accelerate the application of blockchain in Hong Kong and South East Asia markets”.
- DNV GL. January 2018 saw the announcement of VeChain’s partnership with certification service provider DNV GL.
- Fanghuwang. Also announced in January 2018, this partnership with SME property mortgage-focused lender Fanghuwang is designed to help the latter more effectively collect, manage and use client data.
- Gui’an (smart city project). As part of this agreement, VeChain is mandated to be the blockchain technology partner of the government of Gui’an, a city in eastern China.
What’s next? A look at the VeChain roadmap
The biggest milestone coming up in VeChain’s roadmap will be the launch of the VeChain Thor blockchain, which is expected to occur in June 2018. This is a crucial step in VeChain’s development that will allow for the creation of dapps on VeChain’s own blockchain, so its success (or otherwise) will be watched closely.
This release will also include the launch of the VET token, the exchange of the current ERC20 VEN tokens for VET tokens, and the launch of the official VeChain Wallet.
The following update to the VeChain ecosystem is scheduled for Q4 of 2018 and will include the introduction of crosschain and sidechain technology. Then in 2019, the team’s core focus will be on the expansion of the VeChain Thor ecosystem.
What to watch out for
There are a couple of key concerns to consider if you’re thinking of buying any VET tokens. The first is simply the fact that it’s still a work in progress – until the VeChain Thor blockchain is fully released, there will still be lingering question marks about its effectiveness and ability to function as promised. At the same time, the lengthy re-branding from VeChain to VeChain Thor is another hassle, creating confusion among current and potential new token holders alike.
The second issue worth taking into account is the competition VeChain will face from other crypto projects. On the supply chain management and product information front, projects like Waltonchain and Modum will both compete for market share.
And as VeChain continues its evolution into dapps, it’ll also need to do battle with Ethereum, the platform that hosts the world’s second-largest cryptocurrency, and other big players like EOS and NEO. Its ability to go toe to toe with the competition will be crucial to determining the level of adoption VeChain achieves, and therefore the level of demand for its native token.
Read more about what might be in store for VeChain in our VET price prediction.
The bottom line
There’s a lot to like about VeChain. It’s been around since 2015 – a long time in the cryptosphere – and already has a working product, some big-name partnerships and big plans for the future. However, there’s still a degree of uncertainty surrounding the project, not only with the ongoing Thor rebrand but also the expansion into dapps.
Exactly what the future holds for this platform remains to be seen, so make sure you do your own research to decide whether or not to buy any tokens.
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Disclosure: At the time of writing the author holds IOTA and XLM.