The Blockchain Boom of late 2017 led directly into a crash at the start of 2018. Despite this hard correction in the market that persists to this day, newcomer VeChain is still showing strong gains. Touted as one of the strongest real world use cases in the cryptocurrency industry, VeChain’s value continued to grow through their late February rebranding event. Even major media publications have noted the blockchain’s strong growth, with CNBC remarking on their ability to weather the storm.
Available initially as the ERC20 standard token VEN on major exchanges, VeChain recently ported these tokens over to their own proprietary blockchain. The new token, VET, represents the smart contract enabled vision that the founders originally intended. Now titled VeChain Thor, the development team is ready to start integrating decentralized validation apps into their platform. These validation apps help bring the inherent trust-less nature of the blockchain into the real world, where it can be used to verify shipped goods.
Blockchain Verification of Real World Items
A blockchain system routes all internal transactions through a decentralized network of validators. Depending on the algorithm, these validators could be miners, stake-holders or any number of other actors. All nodes in this network keep track of the entire ledger – and a consensus is required in order for a transaction to be completed. This process requires no human interaction, and in fact, avoids it intentionally. Fraud is difficult-to-impossible within the system, and new currency cannot be introduced without this consensus. If this methodology could be adopted for use in the real world, it would be a devastating blow to counterfeiters everywhere.
VeChain intends to do just that, by integrating a custom microchip into each good produced. That chip is associated with a VeChain ID, produced by the blockchain through a service paid for in the Thor dividend of VET tokens. The VeChain ID or VID can only be assigned once, to a single item, and can be tracked at every location along the global supply chain. This ensures that the item is not hijacked or replaced. This system is already in use for several luxury good items, including the Italian Wine Industry. Through DNV GL, an internationally accredited registrar, wine produced using the VeChain verification process will be tracked through VID from producer to end consumer.
The VeChain Thor Asset and Use Cases
VeChain’s recent rebranding event resulted in the full realization of their VeChain Thor blockchain. Similar to NEO’s dividend, the GAS token, VeChain Thor produces Thor tokens. These sub-tokens are used as a form of payment within the system. Decentralized applications built around real world item verification can use Thor as a means of currency. In this way, investing in VET ensures that a company will always have a steady supply of Thor to fund their manufacturing base. If the company finds that they need more Thor, more VET can be purchased at market rate. Should they require less, they can always sell VET back into the system.
This gives VET a consistent value, as it is never directly spent – only the associated dividend token. It effectively becomes business capital at this point, providing long term value for the holder. While still in the very early prototyping phase, VeChain’s intended use case in verifying manufactured goods stands to change the face of item validation. Counterfeiting will become prohibitively expensive, resulting in a huge impact on the criminal industry.
Article By: Adam Stone