What is VeChain (VET)?
VeChain (VET) was one of the first blockchains built exclusively to cater to the needs of enterprise-level clientele. The developers behind the project seek to improve supply chain and product lifecycle management through the use of distributed ledger technology (DLT). Importantly, the platform offers users a variety of new functionalities that make it ideal for businesses seeking to enhance supply chain protocols and business processes.
Today, the logistics sector suffers from an asymmetric information problem. While the systems in place do collect a large amount of data, this data is not communicated in an optimal manner. In most instances, severe compartmentalization leaves the entire supply chain to rely on centralized data sources. This lack of unity results in a lack of transparency and delayed data transmission.
VeChain provides businesses the ability to track an enormous amount of data. These indicators can include items such as quality, authenticity, storage temperature, and transportation status. Impressively, VeChain provides all of these features via a trust-free and distributed business ecosystem. In this way, VeChain reduces overhead and improves accountability.
VeChain differs from other projects in the sector in a few key ways. Primarily, the developers behind this project had no desire to create a fully decentralized platform. Instead, their goal was to integrate the best features from both the DeFi (decentralized finance) and CeFi (centralized finance) sectors. This strategy creates a balanced platform that provides users with transparent information flow, efficient collaboration, and high-speed value transfers.
How VeChain Works
VeChain utilizes a variety of technologies to accomplish its goal to streamline the supply chain sector. For example, VeChain uses various types of Radio Frequency Identification (RFID) tags and sensors to monitor critical data during shipment. This information is broadcast in real-time across the blockchain.
This strategy enables any stakeholders or market participants to monitor the item to verify its condition and authenticity. Paramountly, this approach is perfect for large complex supply chains. VeChain can monitor these gigantic networks and keep businesses up to date on developments as they occur.
VeChain is a pioneer in the integration of IoT and DLT technologies. Keenly, VeChain was built from the ground up with IoT integration in mind. The Internet-of-things refers to the network of billions of smart devices currently in use globally. All of these devices are smart because they possess some sort of sensor and ability to communicate data online. Today, these devices encompass an unbelievable array of stuff, from TVs to doorbells, to the phone you are holding in your hand right now.
The integration of IoT and blockchain technology makes perfect sense. Blockchain tech provides an affordable way to monitor such a vast amount of data in near real-time via consensus. Consequently, VeChain isn’t the only project exploring the merger of both techs.
History of VeChain
VeChain went from the drawing board and into reality in 2015 with the goal to disrupt the supply chain industry by making data actionable and transparent. The project’s creator, Sunny Lu, was best known for his executive work with Louis Vuitton China before this venture. You have to imagine that dealing with all of the supply chain issues facing clothing manufacturers face helped inspire him to develop this unique system.
VeChain’s VET began on the Ethereum blockchain. This approach is a common strategy in the market because it allows developers to showcase their concept and gather funds to develop their own blockchain. Eventually, that’s exactly what VeChain did. Today, VET operates within the native VeChain ecosystem. In this way, developers can provide features geared directly to business clientele.
VeChain did borrow one thing from Ethereum, its dual token strategy. In this style of blockchain ecosystem, one token serves as the public investment and/or digital cash and the other is for smart contract execution and programming. Examples of this style of backend token are Ethereum’s ether and NEO’s GAS.
There are two main advantages to this strategy. The first benefit is that this system provides effective governance. Blockchains need to have governance models that include the community or they risk hard forks from unhappy community members. The second reason to use a dual token strategy is that it provides your blockchain with a predictable economic model.
VeChain Token (VET)
VET is the cryptocurrency that you would invest in on an exchange. It serves as an increment of value within the VeChain blockchain. This token can transfer value across the blockchain and trigger smart contracts. It is also how users pay for transactions on Dapps that function on the VeChain blockchain.
Currently, there are 55,454,734,800 VET in circulation. VeChain’s system is set up to issue a total amount of 86,712,634,466 VET. VET ranks in the top 30 cryptocurrencies globally based on market capitalization.
VeChainThor Energy (VTHO)
The second token used in the VeChain system is VeChainThor Energy. This token functions as gas to power smart contract transactions. These tokens are not publicly available. Only developers use these tokens to cover their contract execution costs.
Critically, most blockchains require developers to make a payment to place contracts on the blockchain. This strategy ensures that only public-ready coding makes it onto the blockchain and reduces spam posts
In order to make good on all of its promises, VeChain must provide business with timely and secure consensus. To that end, the platform introduces a proprietary consensus mechanism known as Proof-of-Authority (PoA). This protocol provides an efficient means to maintain system continuity.
The PoA consensus mechanism was built to improve upon the shortcomings found in Proof of Work (PoW), Proof of Stake (PoS), and Designated Proof of Stake (DPoS) mechanisms. Critically, PoA requires less energy consumption. As opposed to Bitcoin, which requires nodes to communicate and validate transactions, there is no requirement for communication between nodes to reach consensus on the VeChain blockchain.
VeChain relies on a group of 101 Masternodes to achieve consensus. This strategy improves transaction times significantly. Surprisingly, there are no anonymous nodes within this network. You must complete KYC and AML ID verification before you can validate blocks in this system,. The developers believe this approach is essential to their balanced market strategy.
Interestingly, VeChain also utilizes economic masternodes. These nodes can vote on issues regarding the VeChain ecosystem. For every 10,000 VET an economic masternode holds, they get one vote.
VeChain users can also stake their VET to earn some passive income. Staking requires you to hold your VET in a network wallet that remains online for a preset time period. The longer you stake your VET, the more you earn.
Keeping in line with VeChain’s goal to provide a balance between centralization and decentralization, votes are disbursed based on the amount of VET a person holds. Individuals that hold over one million VET are responsible for 20% of the vote. Those users that verified their identity and hold one million VET get 30% of the vote. The rest is split up between the community.
Where to Buy VeChain (VET)
Binance – Best for Australia, Canada, Singapore, UK, and most of the world. USA residents are prohibited from buying VET. Use Discount Code: EE59L0QP for 10% cashback off all trading fees.
BitPanda – This is the best option for residents of Europe, they do not accept clients from outside of this jurisdiction.
Gate.io – Best exchange for USA residents.
How to Store VeChain
You can store VeChain in a variety of different ways. If you want to trade your VET, or just seek a quick return, then you will want to store your crypto on the VeChainThor mobile wallet. This easy-to-navigate wallet provides you with all the features you need. Best of all, it’s available as a free download for Android and Apple devices.
If you seek to make a major investment in VET or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support VeChain (VET).
VeChain – Making its Own Lane
More than most projects, VeChain demonstrates the maturing of the blockchain sector. Today, blockchain is more than just cryptocurrencies. Platforms such as VeChain push the boundaries of blockchain efficiency and provide the world with a more efficient alternative to the status quo.