How VeChain works
The VeChain ToolChain product tracks goods using a combination of its blockchain and smart tags, which can use near-field communication (NFC), radio frequency identification (RFID), or QR codes. The sensors send information to the blockchain network during a product's entire lifecycle.
Since this information is saved to the blockchain, it can't be deleted or changed. The business and the consumer can review the product's information on VeChain.
Both VeChain's crypto tokens play an important role in how it works. The function of VET is to serve as a value-transfer medium, or, in other words, smart money that enables rapid value circulation within the ecosystem. VTHO, meanwhile, represents the underlying cost of using the VeChainThor blockchain.
To validate transactions, VeChain uses a different consensus algorithm than most cryptocurrencies. The most popular consensus algorithms are proof of work, first used by Bitcoin (BTC -3.63%), and proof of stake, which is more efficient.
VeChain uses proof of authority. A fixed number of known validators, called Authority Masternodes, are responsible for confirming transactions. Any party who wants to be an Authority Masternode must disclose their identity, go through a know-your-customer (KYC) procedure, and complete any other minimum requirements set by the VeChain Foundation.
Partnerships
Even before its mainnet launch, VeChain had already established partnerships with several well-known businesses, and it has continued to build relationships. Here are some of the bigger names that are working with VeChain:
- Accounting giant PricewaterhouseCoopers has partnered with VeChain to offer blockchain solutions to clients.
- Walmart (NYSE:WMT) China started working with VeChain in 2019 to track its packaged meat, vegetables, and seafood.
- Multiple brands under LVMH Moet Hennessy Louis Vuitton (LVMHF -0.26%) are working with VeChain to use blockchain technology as an anti-counterfeiting measure.
- BMW (BAMXF -5.76%) began a partnership with VeChain through the BMW Startup Garage Program to store vehicle data on the blockchain.
- French automaker Groupe Renault (RNSDF -9.98%) has partnered with VeChain to create a digital car maintenance book.
Can I make passive income with VeChain?
You can make passive income with VeChain through crypto staking, although rewards rates are on the low side compared to other cryptocurrencies.
The traditional way to stake VeChain is through one of the blockchain wallets it offers: Sync for desktop advanced users and VeChainThor mobile wallet for all users. All you need to do is transfer your VET tokens to either wallet. Once you do, you'll start earning VTHO automatically.
Although reward rates are low for the casual investor, VeChain offers several tiers of rewards. If you have enough VET tokens to identify your VeChain wallet as an economic node, you can earn additional rewards.
Another option is to stake VeChain through a crypto exchange. Crypto.com and Binance.US both support VeChain staking. Unlike when you stake through a wallet, these exchanges pay you in VET tokens, not VTHO.
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