VeChain is a blockchain platform that aims to improve supply chain management and business processes around the world. Founded in 2015, VeChain is a company that harnesses the power of its public blockchain VeChainThor to deliver distributed ledger-based solutions to businesses.
The blockchain aims to empower its individual members while committing to providing a stable and predictable transaction cost to users in order to facilitate better financial service.
VeChain was founded in 2015, but the first version was only launched in June 2016. Its main characteristics are as follows: VeChain takes a very specialized approach to its development, designing a specific structure for the movement of goods and services throughout the supply chain. This makes VET a utility token. It has two token systems: VET, which funds the projects; and VTHO, which powers the blockchain. Blockchain technology records data without giving the possibility of modifying it. This allows for a truthful record of conditions throughout the supply chain. It can be used to verify the authenticity of items purchased, which is particularly important in combating fraud in the luxury sector.
What is VeChain?
VeChain aims to create a distributed and trustless business ecosystem that enables transparent information flow, efficient collaboration, and high-speed value transfers.
VeChain was created as part of a China-based blockchain as a service company, BitSE. The blockchain platform is designed for use by both small businesses and large businesses.
Founded in Singapore, the VeChain Foundation oversees the development, governance and advancement of the blockchain ecosystem.
According to VeChain’s official white paper, the real-world business applications that exist on the public blockchain have been tested and discussed with over 700 companies and implemented for over 100 makeshift companies.
What are VeChain tokens used for?
The enterprise blockchain platform has two types of tokens, including the VeChain (VET) token as a value layer and VeChain Thor Energy (VTHO) as a smart contract layer.
The VeChain token is used for financial transactions that occur on the public blockchain and acts as a crypto asset that can be traded on the open market.
Are VeChain and VeThor the same? EFP vs. VeThor
The VeThor token is known as the ‘energy token’ which is used to perform transactions on the VeChainThor blockchain. Holders of the VET token can generate a VTHO for use on the public blockchain.
VTHO is used to pay for writing data to the blockchain, where every transaction, including sending tokens or sending data to a smart contract, requires payment in the VeThor token.
The amount of VTHO needed for a transaction depends on the size of the data being sent.
VET and VTHO tokens are essential for the VeChain ecosystem, which helps separate the cost of using the blockchain from market speculation. The governance mechanism of the VeChain Foundation stabilizes the cost of transactions, and VTHO’s supply and demand is constantly monitored.
Since VET generates VTHO tokens, users who hold the VeChain token will earn VTHO, which can then be used to pay for transactions. Each VET will create 0.00000005 VTHO with each block generated, resulting in a build rate of 0.000432 VeThor each day.
Transaction fees on the VeChain blockchain remain relatively stable, compared to a system like Ethereum, which has only one coin.
What are VeChain clauses?
The clauses of the VeChain blockchain are part of the transaction model. Each transaction on the VeChainThor blockchain contains a ChainTag, BlockRef, clauses, gas, gas price coefficient, TxNonce, expiration, DependsOn, reserved and signature.
Although each transaction can contain multiple clauses, each clause contains “to”, “value” and “data” as fields which are used to initiate different tasks, including payment or smart contracts. This allows the sender to use a single transaction to perform multiple tasks.
Clauses can contain any number of bundled transactions. A specific address on the VeChain blockchain receiving the majority of clauses would belong to Walmart.
Who uses VeChain?
Walmart uses VeChain technology for food tracking purposes. The company initially only used the blockchain to account for mushrooms sold by the retailer.
The Chinese arm of the US retailer announced in 2019 that it had partnered with VeChain and PwC to launch a blockchain-based platform aimed at addressing food security concerns in the country.
According to the official press release, VeChain provides the blockchain technology necessary for the Walmart Blockchain traceability system. The announcement further stated that the traceability system will see “traceable fresh meat will account for 50% of total packaged meat sales, traceable vegetables will account for 40% of total packaged vegetable sales, traceable seafood will account for 12.5% of total seafood sales by the end of 2020. “
This system will allow all parties involved to enter data at specific points in the supply chain for greater visibility and confidence. Smart contracts used by Walmart have grown steadily since.
Since the blockchain platform was developed in China, VeChain has grown in the country. A few notable companies that have partnered with VeChain include computer consulting firm National Research Consulting Center (NRCC), leading Chinese real estate developer Yida China, China Unicom, LVMH, BMW, Renault, and many more.
Who are VeChain’s competitors?
One of VeChain’s biggest competitors in the supply chain industry is Blockverify, a startup that focuses on improving anti-counterfeiting measures.
Other small businesses also include Everledger, which tracks the provenance of luxury items, while reducing fraud and risk, and Origintrial, a blockchain-based data exchange protocol for interconnected supply chains.
A growing number of companies are focusing on solving supply chain issues and improving transparency in the industry. SyncFab is a company that uses blockchain to enable transparent order tracking and purchase order management. Provenance, a distributed accounting company, makes information open and accessible throughout the supply chain at the point of sale.
What are Vechain nodes?
A VeChain node is created when a user starts owning a certain amount of VET. Nodes in the VeChain network would be rewarded with additional VTHO tokens for their contributions.
VeChain Thor uses a consensus mechanism called Proof of Authority (PoA). There are two types of nodes on the VeChain network, authority nodes and economic nodes.
Authority nodes validate, aggregate and add transactions on the blockchain. Authority nodes can become validators on the network and require special hardware to support it.
To become an Authority Masternode that can verify and add transactions, users must invest a minimum of 25 million VET. Those interested in operating authority nodes should apply and obtain approval before running the node.
Economic nodes play a vital role in stabilizing the VeChain ecosystem and do not require any special hardware or application.
Which wallets support VeChain?
There is a wide range of wallets that support VeChain, including hardware wallets like Ledger Nano X, KeepKey, Ledger Nano S, and Trezor. Users can also choose to store VET on the VeChainThor wallet on desktops.
Atomic Wallet, a decentralized wallet platform for cryptocurrency trading, also supports VET, as well as Trust Wallet, which is a mobile wallet for storing the VeChain token.
Which platforms support VeChain?
Users can buy VET on popular cryptocurrency exchange platforms like BitFinex, Binance, KuCoin, BitMart, and many more. VeChain is one of the top 50 cryptocurrencies by market cap and is supported by most of the major exchanges.
VeChain vs. Ethereum
One of the biggest differences between VeChain and Ethereum is the payment of transaction costs, gas. While the VeChainThor network offers two types of tokens, VET for value and market speculation and VTHO for transaction fees, Ethereum only has one coin, ETH.
Ethereum gas fees are paid in ETH, the native currency of the blockchain, and due to the growing popularity and rising price of Ethereum, users have had to pay high gas fees. VeChain, on the other hand, solves this problem by having two separate tokens for different utilities.
Gas charges help maintain the security of the blockchain network, as the requirement of a fee for each transaction executed on the network prevents actors from spamming.
While Ethereum anticipates its transition to a proof-of-stake consensus algorithm, it currently operates on the same consensus mechanism as Bitcoin, known as mining or proof of work.
The potential for appreciation of VET stems from a variety of mechanisms, including the fact that VTHO must be purchased from holders by companies to use the blockchain. As the demand for VTHO increases, the return on investment of VET also increases.