Why Investors Should Pay Attention to VeChain
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Many of the top blockchain technology protocols are based on revolutionary ideas that are likely to change the world and the way we approach business. However, some of these technologies involve creating whole new business models and displacing massive monopolies in order to achieve success.
VeChain, on the other hand, is based around provable improvements to the way supply chain management is executed. Asset transfers are recorded and verified in a way that is secure for all participants. In a way, VeChain works a lot like your standard software as a service (SaaS) company in how it assists companies.
VeChain Foundation and Token Use
Much of the value of the VeChain is in the amount of partnerships they can forge with other enterprises. This is why the VeChain Foundation is so important. Their main role is business development, but they also work to construct the network and perform technological research.
Network nodes are operated by businesses directly using the ecosystem, and they are incentivized by receiving tokens in exchange for their support of the network. VeChain Token (VET) is used for the issuance of new applications, and VeThor tokens (VTHO) are used as GAS (similar to NEO) to run the applications. VTHO tokens are distributed for free to those holding VET tokens and operating network nodes, and VET is currently the 20th highest valued cryptocurrency in terms of market capitalization.
Asset Digitization
Asset digitization is the act of assigning digital identities to assets that then enable them to be tracked much more easily. In the world of asset digitization, VeChain is considered to be a current frontrunner. The main appeal for companies looking to implement asset digitization is the increase in trust from customers that would likely result from it.
Decentralization and transparency adds balance to the commerce of managing inventory, and allows for customers to better understand where their goods have been and that they are of high quality and authenticity.
VeChain assigns a specific VeChain identity using a hash function and then uses RFID, NFC or QR codes to connect that identity with the product in question. A public key is used to identify the owner of a good, and the corresponding private key is used to signify control of said asset. This has value to a wide swath of industries. For example, with the shipment of meats and other foods that are time sensitive in terms of their expiration dates, VeChain’s technology can be used to track the flow of goods to verify the safety of the product for consumption.
VeChain’s Potential
The main reason to watch VeChain is their potential to achieve mass adoption. Recently, VeChain has announced a partnership with the Shanghai government for the tracking and management of drugs and vaccines. NTT Docomo, a Japanese telecommunications company, has also recently announced a partnership with VeChain.
For companies considering moving their supply chain management onto VeChain, there is a large potential risk involved. Adapting to a process is one thing, but with the goal of maintaining credibility, they need to be cautious for any potential technological hiccups that could disrupt their supply chain. The act of having a decentralized technology such as VeChain tracking all of your inventory or assets can also mean the risk of a malfunction that limits your access to assets. This is why trust is paramount and it is essential the VeChain Foundation continues to improve and expand the network.
As for the value of VET, each partnership announcement indicates a higher potential demand for the token. By paying attention to the partnerships and comparing VeChain’s development to its competitors, investors can get a strong idea of the direction of the token’s value over the next few months. This Ethereum for businesses has the potential to revamp entire industries and the way supply chain management is executed.
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