VeChain is a leading blockchain project built by former executives of LVMH, the world’s largest luxury brand. VeChain’s original goal was to help businesses meet supply chain challenges in a simple decentralized ecosystem. In this article, we will explain what VeChain is and why we think it is a good investment.
What is VeChain?
VeChain is a blockchain platform that helps companies solve the world’s biggest supply chain challenges. As such, it is addressing one of the biggest challenges facing many companies around the world due to the Covid-19 pandemic and the logistical challenges that have arisen.
VeChain was founded by Sunny Lu and Jay Zhang. Mr. Lu was the CTO of LVMH China and Jay Chou was the Senior Manager of PricewaterhouseCoopers China.
The network works by combining technologies such as QR codes, near field communication (NFC) and radio frequency identification. As such, its users install sensors at every stage of their supply chain, which are then linked to the blockchain. The blockchain and the smart contracts involved make these records immutable.
Read more about our VeChain price prediction.
VeChain uses a software platform called VeThor that is purpose-built for the mass adoption of blockchain technology. It is a platform built using a technology called Proof of Authority, which is its primary governance mechanism. Unlike Proof of Work and Proof of Stake, PoA requires every node to be authorized to access the network.
Today, VeChain is used by some of the leading companies in China. Some of the most prominent companies adopting VeChain are LVMH, Walmart, and BMW.
VET and VTHO
Unlike many other blockchains, VeChain has two cryptocurrencies. The main one, called VET, is the payment currency for the VeChain ecosystem. VeChain is the most popular of the two, with a market cap of over $2.5 billion.
Another token is called VeThor token. It is generated using VET. And is used by companies to track their products in the supply chain. Its total market cap is just $104 million. So, here are some reasons why we think VeChain is a good investment.
Over the past few months, VeChain prices have been underperforming. After surging to an all-time high of $0.2842 in April 2021, its price has plunged more than 87% to its current level of $0.034.
Huge market opportunity
The first major reason VeChain is a good investment is that it is dealing with one of the largest industries in the world. While difficult to estimate, the supply chain market is worth more than $15.8 billion. The industry is expected to more than double by 2026 as the industry becomes more complex. Consider the supply chain strain due to the Covid-19 pandemic and the war in Ukraine.
As a result, more companies are likely to adopt the platform to simplify or solve some of their biggest challenges. Fortunately, the number of partners keeps growing.
Some of the major companies using VeChain include DB Schenker, Kuehne & Nagel, Bright Food, Fashion for Good, Haier, and Norway in a Box, among others. As they become successful, more companies are likely to embrace its use.
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VeChain is being embraced by developers
Another reason VeChain is a good investment is that the ecosystem is embraced by developers building all types of applications. VeChain has smart contract capabilities to build applications, which makes this possible. There are now many publicly available applications built using VeChain technology.
For example, VeChain is used to build Buy me a Coffee, a simple platform that allows organizations and users to support through VET. It has also been used to build the decentralized exchange Vexchange. It is also used to build projects in the NFT industry such as OceanEX, NFT Paper Project, VeGhost NFT and VeHashes, etc. While most of these projects are small, they have the potential to bounce back over the long term.
VeChain is very popular
Another major reason why VeChain is a good investment is that it is very popular among investors and traders. Apparently, this popularity has dropped dramatically recently due to its performance. However, there are still many people who still have it in their wallets.
According to VeChain statistics, the number of VeChain blocks has grown to over 12.1 million. This is a very high amount. Meanwhile, the number of VeChain addresses has jumped to over 1.78 million. Despite the stellar performance of the coin, activity on the VeChain mainnet has been somewhat steady.
VeChain is cheap
Also, VeChain is a good investment as it is a bit cheap. On the one hand, prices have fallen more than 80% from their all-time highs and are now at their lowest levels since February 28. This drop has left the coin trading at a steep discount. Historically, bear markets don’t last forever. Therefore, its price is likely to rebound.
Finally, VeChain is growing even as the coin price struggles. For example, VeChain has several partnerships with some of the largest companies in the world. For example, it works with Direct Import Goods, PricewaterhouseCoopers and Renault. These partnerships are expected to continue to grow.