VeChain Explained for Noobs

I saw a really informative post about Ethereum from u/Ghostserpent and i wanted to do the same for VeChain.

(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.

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.

EDIT: As u/liau_ stated I missed a key concept called Proof of Authority (PoA). PoA is an algorithm used with blockchains that delivers comparatively fast transactions through a consensus mechanism based on identity as a stake. To many this may sound pretty vague. In this video the PoA of VeChain is explained for those who find it interesting!