Why VeChain will fail

Direct from the desk of Dane Williams.

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Why VeChain's centralised governance and potential issues with its native VET crypto, could ultimately lead to the project’s failure.

VeChain is a blockchain platform that aims to revolutionise supply chain management by enabling businesses to track their products from production to consumption.

Its goal is to provide transparency in supply chains, helping to reduce fraud and increase efficiency.

However, despite its ambitions, VeChain may be at risk of failure due to its lack of decentralisation and an ultimately centralised governance structure.

In this blog post, I’ll explore the potential reasons why I think VeChain will fail and discuss the challenges it faces in a globalised business environment where accuracy is everything.

Why use VeChain for supply chain management at all?

If you're a company considering using VeChain to track data on the blockchain, it's important to consider what truly matters.

It’s all good and well to say you’re using a specialist supply chain management blockchain, sure.

But In my opinion, the only thing that matters when it comes to blockchain data storage is that it is truly immutable.

Otherwise you may as well just be using a more efficient database.

This means that your network of choice must be truly decentralised and under no risk whatsoever of having governance compromised.

While VeChain has some interesting features when it comes to supply chain management, it certainly falls short when it comes to true decentralisation.

Unlike more established and decentralised blockchains like Ethereum, VeChain's governance structure is not fully open and transparent.

Instead, there is a centralised authority that has the power to make decisions on behalf of the network.

This means that there is a risk that VeChain's governance could be compromised in some way.

While the risk may be small, it's still a risk that should be taken seriously when considering what this could mean for the reputation of your business.

In contrast, truly decentralised blockchains have a much stronger track record when it comes to immutability.

The fact that Ethereum is open-source and community-driven means that it's much less likely to be compromised in the same way.

This makes it a much safer choice for those who want to ensure that their data is truly immutable and secure.

Is it a specialist supply chain management solution?

No.

But it is immutable.

And really, isn’t that all that matters?

VeChain governance is highly centralised

As I touched upon, my biggest issue with VeChain is that their governance structure is highly centralised.

What we really see is a small group of entities holding a significant amount of power over the platform's decision-making processes.

This structure consists of three main components:

1. The VeChain Foundation
2. The Steering Committee
3. The Authority Masternodes

The VeChain Foundation (ah don’t you just love the word ‘foundation’) is responsible for managing the development and promotion of the VeChain ecosystem.

The Steering Committee is a group of representatives from various involved companies that make decisions regarding the platform's development and strategic direction.

Hint… take a look at the ‘companies’ announced as early partners and pay special attention to their country of origin.

Finally, the Authority Masternodes are responsible for validating transactions on the VeChain blockchain.

In my opinion it’s this centralised governance structure that poses risks to the integrity and security of the platform.

With a small group of entities controlling the decision-making processes, there is a risk that the governance structure could be compromised.

Ultimately leading to potential security breaches or other issues.

VeChain could fail and fail hard

While VeChain has positioned itself as a leading blockchain platform for supply chain management, its chances of success are far from guaranteed.

For me, the platform's centralised governance structure and overreliance on the VET token pose significant risks to its long-term viability.

Despite the potential benefits of using the specialist VeChain for supply chain management, the platform's centralisation undermines the entire point of choosing a blockchain solution in the first place.

Without a truly decentralised governance structure, there is a risk that VeChain could be compromised, leading to security breaches that bring the integrity of the data found on the blockchain into question.

Once this happens, it's game over.

Given these challenges, you can see why I believe that VeChain's chances of failure are actually quite high.

Best of probabilities to you.

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