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What is Vechain?

BitForex Editor
Jan 22, 2021

To understand what VeChain is, you have to first look at the problems VeChain solves. Between 2017 and 2020, the luxury goods industry lost close to $100 billion in piracy and counterfeiting. In the food and health industry, asymmetric information means there's a huge gap in terms of efficiency and quality control. These problems are what gave birth to VeChain. But what exactly is VeChain and how does it solve these problems?

VeChain is a business ecosystem that uses blockchain technology to streamline business processes and supply chain management. It's designed to make the information flow of complex supply chains smoother and easier, and it does this through the use of DLT(distributed ledger technology). To put it simply, VeChain records what happens at every point in the supply chain and makes it available to every authorized person. It also allows you to physically track products in the real world, right from its production point all the way to wherever it's being delivered.

VeChain does this with complete transparency, making sure the records are stored on the blockchain, verified, and easily monitored to ensure there's no swapping at any point in the product's journey, thus reducing counterfeiting and preventing fraud.

History Of Vechain

VeChain started as a subsidiary of Bitse, one of the largest blockchain companies in china. It has been in the works for quite some time, but in 2025, it was officially launched by Sunny Lu, former CIO of Louis Vuitton China. It's debated that his time spent in this executive role gave him unique insights into the problems of supply chains and how to solve them.

 When VeChain was launched, it's token VEN was functioning on the Ethereum blockchain, and it was not until 2018 before it moved to its own blockchain and rebranded itself. The move to be on the Ethereum blockchain was one that allowed it to showcase its concept to the world, and gather funds to build its blockchain. This also allowed them to build a very substantial customer base with fortune level companies.

Presently, VeChain plans on conquering the supply chain industry with its unique solution to the problems they face. They've signed strategic deals with  PricewaterhouseCoopers, Jiangsu electronics, Renault, and even the Chinese government to give themselves diverse economic and manufacturing advantages, making sure they're here to stay and can continue their growth in accordance with their plans.

How Does Vechain Actually Work?

VeChain uses a variety of technologies like radio frequency identification, QR codes, and sensors to track and monitor data of a product or shipment during transport. One can monitor the temperature, pressure, and storage conditions of a product using VeChain. This information is then transmitted to the blockchain, and all authorized people on the sending and receiving end can monitor it at all points. If there's a mistake somewhere in the supply chain, it can be pinpointed and addressed using the information on the blockchain.

As we all know, information on the blockchain cannot be edited or tampered with, so this is a great step in transparency in complex supply chains. This also ensures that the receiver is handled correctly and that the product is indeed authentic. With VeChain tech, the product can be resold and still keep its value because it can be verified as authentic.

VeChain used to issue tokens called VEN when it was on the Ethereum blockchain, but when it left and rebranded, it borrowed Ethereum's two token strategy and developed VeChain Thor(VET) and VeChainThor Energy(VTHO) token which It uses for transactions. The VET is what users use to invest and make transactions on the VeChain. It ranks in the top 30 cryptocurrencies in the world, and it can be used to trigger smart contracts on the blockchain and transfer value. VTHO on the other hand is only available to** VeChain** developers. It's the fuel that drives** VeChain** and it's used to cover contract execution costs.

When adding a new block to the blockchain, VeChain uses a different consensus protocol. Most other cryptocurrencies like Bitcoin use a "proof of work" protocol, where people have to solve a cryptographic puzzle before a block gets added to the blockchain. With VeChain, there's no puzzle to solve, because they use a "proof of authority" protocol, where a group of people called "validators" are the only ones given access and allowed to add blocks to the blockchain. What these people do is run a software that adds blocks to the blockchain, making it much faster than its counterparts.

Why is Vechain Special?

Apart from the fact that it solves important real-world problems, VeChain is important because it brings the best out of centralized and decentralized finance systems and puts it together to serve its users with efficient information flow, transparency, high-speed value transfers, and smooth operation.

VeChain also has deep ties with China, which is one very important blockchain market, one that is very hard for non-Chinese companies to penetrate. Because of its service, it has ties with Chinese government bodies, like the Chinese Animal Health and Food Safety Alliance.

Real-World Use Of Vechain

VeChain tech can be used to improve the food economy around the world. Most foods need to be stored in a specific kind of environment when being transported, and most times, one can't track if it was properly stored and handled in transit. But with the application of VeChain tech, a chip can be placed in the product that'll be able to monitor the temperature and pressure of the substance being transported and broadcast it to the blockchain where the receiver can see and keep track of it. This system is already being used in China by Shenzhen Yuhongtai foods.

It can also be used to track expensive cargo and vehicles when they need to be transported, as well as monitoring the day to day delivery of things in a supply chain. In truth, the applications of VeChain are enormous, and it'll only get better as people innovate.

Conclusion

VeChain is one of the best things to come out of blockchain technology in a while. Blockchain technology has the potential to improve a lot of things in our daily life, with the right applications.VeChain is merely proof of that, and better still, it's proof that the future lies in blockchain technology.

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