VeChain Explained for Noobs

I am not sure why, but a lot of informative posts explaining certain crypto etc I made over a year ago, seem to have been removed. As the posts were really liked back then and since we have gained a lot of new people here on u/Cryptocurrency I thought I post them again :). Hope it is usefull!

(Long but informative read)

What is VeChain (VET)?

VeChain is a blockchain built to help make supply chain management simpler. It was originally conceived as a way to determine if a real-life product is fake or not - preventing frauds and knock-offs. Since then its been used by major corporations to help track everything from wine production to car manufacturing.

The way it does that is simple: give each product a unique identity, then use sensors to track what happens at each stage of the supply chain. That way, companies can be sure products are handled correctly, and consumers can verify their purchases are legitimate.

The Blockchain used is PoA: “Proof of Authority (PoA) is a modified form of Proof of Stake (PoS) where instead of stake with the monetary value, a validator’s identity performs the role of stake. In this context, identity means the correspondence between a validator’s personal identification on the platform with officially issued documentation for the same person, i.e. certainty that a validator is exactly who that person represents to be.”

Who invented VeChain?

VeChain was founded in 2015 by Sunny Lu, the former CIO of Louis Vuitton China. He combined his expertise in luxury goods with blockchain technology to create an IoT (Internet of Things) application for supply chain management. He remains the CEO of VeChain through a non-profit called the VeChain Foundation.

How does VeChain work?

You can look at VeChain in three parts. The real-world tech, the cryptocurrency, and the platform.

• Real-world tech: VeChain works by giving physical products a unique identity, usually through RFID (radio frequency identification), QR Codes, or NFC (near-field communication). Sensors record information at every stage of the supply chain, and are recorded and linked to the product's identity. These are sensors that VeChain designs, and are created by manufacturers like Bosch and Qualcomm. Since it uses blockchain technology, the recorded data can`t be changed. This allows for a truthful record of what conditions were like throughout the supply chain. If anything went wrong, like goods being shipped to the wrong place, the blockchain record will show exactly where the mistake happened.
• The cryptocurrency: VeChain originally issued tokens (known as VEN) on Ethereum before it released its own platform in 2018. With this new platform came a rebranding as VeChainThor (known as VET). VET is the payment used in VeChain's system. The more VET a person or enterprise holds, the higher priority when it comes to using the blockchain's resources. VET can also be used to generate a second kind of token, known as VeThor or Thor Power (VTHO), to access the supply chain technology. So a company that wants to use VeChain's tracking for their supply chain has to pay VTHO in order to add more information to the blockchain.
• The platform: The platform that is used to do all of this, known as a main-net, can also be used by other blockchain projects to launch their own coin on VeChain's system (in a similar manner to Ethereum). This platform has helped move VeChain on from just supply chain into Dapps.

What can you do with VeChain?

VeChain has developed sensor chips for physical products that are uniquely linked to its blockchain platform. The system is exclusively geared for mass enterprise adoption. Its real-world tech has been in use since 2015, when it developed NFC tracking chips to be placed inside handbags for a French luxury brand.

Then in 2016, VeChain applied this tech for the Renault car company to track vehicle history. It keeps track of maintenance, mileage, and anything else that has happened to the car from the time it first hits the road. This unchangeable record can be accessed by used car buyers to give them a complete account of the vehicle - a huge boost to tackle issues like odometer fraud. VeChain has also announced partnerships with BMW and other car companies in Europe and Asia. This technology has applicability in several other industries, and VeChain has hinted at other major collaborations in the works.

List of VeChain Partnerships

• Strategic Partners
  • DNV GL
  • PriceWaterhouseCoopers (PwC)
  • National Research Consulting Center (NRCC)
  • Yida China Holdings Limited
  • BitOcean
• Partnerships
  • China National Level partnership
  • Direct Imported Goods (D.I.G)
  • China Unicom
  • Kuehne & Nagel
  • DB Schenker
  • BMW Group
  • LVMH
  • Groupe Renault
  • Fanghuwang
  • iTaotaoke
  • Bright Food
  • LogSafer
  • Shanghai eGrid Consulting Co. LTD
  • NTT Docomo
  • People’s Insurance Company of China (PICC)
  • BYD
  • SBTG Surplus & Co
  • ENN Energy Holdings Limited
  • Republic of Cyprus National Level partnership
  • Fuji MARUMO Tea
  • Baijie Teng IoT Technology Corporation
  • BIOS Middle East
  • Reebonz Holding Limited
  • Fashion for Good
  • Haier
  • Norway in a Box
  • Walmart China
  • ASI Group
  • Anhui Tea Industry Association
  • Cointelegraph Consulting
  • Shanghai Gas
  • PlatformXChain
  • H&M
  • Sarah Regensburger

VeChain has partnered with Walmart China in order to create the Walmart China Blockchain Traceability Platform that is built on top of the VeChainThor Blockchain. The announcement regarding this platform and collaboration between Walmart China and VeChain was made on June 25.

Decentralization

A top comment from u/timidpterodactyl on the original post was 'PoA makes the whole thing semi-centralized. Any plans to move to a consensus completely decentralized?'

As u/TheHalfTruth correctly replied ' Nope. This network is not trying to be a decentralized p2p transaction system, for which decentralization is extremely important. For VeChain users, those generally being enterprises, extreme scalability, low costs, and high speed is more important. Many companies likely also probably feel more comfortable knowing that it’s companies like DNV and Deloitte validating their transactions and managing their data, rather than random anonymous people from around the world. This is an important point for people who aren’t blockchain savvy and don’t yet trust the tech, which is the majority of people that VeChain markets itself to. '