What is VeChain and How does VeChain work?

What is VeChain (VET)?

VeChain is one of the advanced blockchain platforms and the 17th most popular cryptocurrency which is valued at $8.1 billion.

It is designed with an intent to aid the supply chain in better management and better flow of business processes. Vechain aims to streamline the processes and the flow of information for supply chains through the utilisation of distributed ledger technology.

One of the primary functions of  VeChain platforms is to offer assistance to marketing industries in keeping tags on their products by affixing sensors to supply chains.

These sensors in turn monitor the Temperature of products’, location, temperature etc., by using advanced technologies. 

However, to avail of any of these tracking services the users need to have native cryptocurrency Vechain(VET) since the platform makes use of cryptocurrencies. Another thing about the tokens is that, for VET to transact, gas fees should be paid using VeThor(VTHO).

Hence, two of these tokens work hand-in-hand on the same platform and still possess distinctive differences. 

Tokens: VET vs VTHO 

The key differences between the tokens of VET and VTHO lie in their usage. VET token denotes the leverage a user possesses over the platform I.e the more VET tokens a user has the higher the importance given to that user.

VTHO on the other hand functions as gas fees that are used to authenticate decentralised applications and smart contract transactions. The VTHO tokens can be either purchased or obtained by a user, depending upon the number of VET tokens they have.

If the users have more VET tokens, their chances of having more VTHO increases subsequently.

The function of VET tokens is similar to that of Bitcoin, Ethereum serves the purpose of storing value and transferring across the network. On the other hand, VTHO tokens can be used as energy tokens.

Who are the founders of VeChain (VET)?

Vechain was founded in the year 2015 by Sunny Lu who also happens to be the chief information officer (CIO) of Louis Vuitton China. What started as the subsidiary of Bitse ( largest blockchain in chains) a currently among the few blockchains that have a huge customer base.

What makes VeChain unique (VET)?

  • As an enterprise blockchain platform Vechain aims to offer a purview of an organisation through the utilisation of information that’s been disintermediated from data silos. 
  • Vechain plans to set off as a principal platform for ICOs (initial coin offerings ) and for carrying out transactions IoT (between Internet of Things) the devices connected.
  • As a blockchain platform, the focus of VeChain is to record what happens at every stage of the supply chain.
  • One of the smart ways to know if an investment turns out to be profitable in the long run is to know who is supporting the project. A well-known U.S billionaire decided to invest in the case of Vechain, which catapulted its success massively.

Goals of Vechain

Vechain stated its goal to construct a platform that’s a trust-free and disseminated business ecosystem to authorise it for the flow of transparent information, efficient collaboration and swift value transfers. 

As claimed by Vechain’s white paper, the ever-evolving blockchain technology can break the problem of asymmetric information and allow ownership of data to be leveraged by the owner. 

How Many VeChain coins (VET)?

The Vechain has a total circulating supply of 64,315,576,989 VET with the maximum supply being 86,712,634,466 VET coins.

How does VeChain (VET) work?    

The platform of VeChain is so diverse as it can be used to do countless things like track the storage temperature, quality, authenticity, medium of transportation and last-minute delivery of medicine packs right from the manufacturing, the final deli ry to the end customer. 

For these goals to be accomplished VeChain uses smart chips or RFID tags ( Radio Frequency Identification) as well as sensors that relay key information onto the network of blockchain that can be accessed by stakeholders in real-time.

The application of sensors indicates that all parameters about the product can be continuously monitored and problems can be communicated back to the relevant stakeholders.

A company that deals with medicines/drug are informed of if any medicine has been stored outside if a prescribed temperature. 

Vechain’s Governance Protocol

The Vechain protocol makes use of proof of Authority as a Consensus protocol. As per the protocol of Proof of Authority(PoA), the disbursement of votes is dependent on VET holdings and the disclosure of the user by the users.

VET holders with 1 million tokens and without any KYC details are allotted 20% of all the votes while the VET holders with 1 million tokens along with KYC credentials are allotted 30% of the total votes. 

In VeChain’s blockchain, the consensus on any transaction can be reached with the help of 101 master nodes. This system is very much different from Bitcoin in which consensus on a transaction is reached only when all the nodes vote on that particular transaction.

However, any kind of anonymous node is not allowed with the disclosure of identity being an indispensable prerequisite to become a master node with authority. As stated by the white paper, the blockchain system of Vechain uses less electricity and does not place much emphasis on validators to reach a consensus.

Another kind of master node which is in the Vechain system is the economic master node that isn’t involved in the production of blocks or records but is used to check on power.

The voting rights in a decentralised system are centralised by the system of master nodes. However, the founders of VeChain said that their aim towards crafting such a protocol is to attain a balance between centralization and decentralization.

Conclusion

One of the most attractive features to invest in VeChain is because unlike many other cryptocurrencies the team of Vechain is a perfect blend of business savvy and tech enthusiasts.

Being backed by powerful business partnerships Vechain indeed has the potential to grow steadily in the long run.

Vechain has what it takes to carve a fair portion of the supply chain provided they continue to follow their road map, building more partnerships all while executing Vechain Toolchain™

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