What is VeChain
VeChain is a tier one smart contract platform that allows businesses to create and manage decentralized applications (dApps).
VeChain’s primary goal is to provide new tools for efficient data transfer and supply chain management.
History of VeChain
VeChain was founded in 2015 by Sunny Lu, former Chief Information Officer (CIO) of Louis Vuitton’s China branch. The project started as a subsidiary of Bitse, one of the largest Chinese blockchain companies.
Originally based on Ethereum, the VeChain (VEN) protocol rebranded to VeChain Thor (VET) with the launch of its own blockchain in 2018, increasing the scope of decentralized applications to include more general data solutions.
VEN was replaced with VET at a 1:1,000 ratio.
How does VeChain work?
VeChain uses the consensus proof-of-authority (Proof-of-Authority or PoA) protocol. Transactions and new blocks are validated by the user using their pledge identity. Endorsers earn their position through their reputation and are therefore incentivized to maintain the transaction process to maintain that reputation.
Identity disclosure is a prerequisite for VET token holders who want to become validators.Unlike proof of stake (PoW), PoA is not energy intensive and does not require a minimum number of validators to reach consensus, which contributes to the relatively high transaction speed.
There are 101 master (master) nodes that are responsible for reaching consensus on transactions in the VeChain blockchain.
The other type of master node in the VeChain network is the economic master node. It does not produce blocks or ledger entries, but is used for power verification. This is done by allocating a certain number of votes to each economic master node based on its VET token holdings. Each 10,000 VET tokens held by an economic master nodes gives it one vote.
To become a master node, you must have pledged a minimum of 25 million VET and passed KYC verification.
The idea of the team behind VeChain is to strike a balance between centralization and decentralization.
VeChain aims to give every company the ability to launch new types of dApps.
To make it easier to create dApps, the VeChain team built a component called VeChain ToolChain, a software development kit (SDK).
Two-token design
To make the project software work, VeChain uses two tokens: the VET, and the VTHO. While VET is used to store and transfer value, VTHO is used for the transaction operations in the blockchain.
This design aims to isolate the volatility of the VET coin price from the cost of computing on the network, allowing applications on VeChain to charge stable fees (since the supply of VTHOR can be adjusted to maintain a stable price for transactions).
Similar to the way the Ethereum blockchain uses ETH and gas, miners earn fees in VTHO for the computations processed by the network. The more complex the calculation, the more VTHO a program will require.
Nodes that stack VET tokens get a vote on network improvements and are rewarded with VTHO on each block.
How can VeChain be used?
For example, the platform can be used to track quality, authenticity, storage temperature, transport environment, and more – from the manufacturing plant to final delivery to the end customer.
To accomplish this, VeChain uses smart chips or radio frequency identification (RFID) tags and sensors that broadcast key information across the blockchain network that authorized stakeholders can access in real time.
In another example, the VeChain platform could allow car owners to own their data and use it to negotiate better terms and policies with their insurance companies.
Corporations using the VeChain blockchain platform include:
- PricewaterhouseCoopers: The accounting giant has partnered with VeChain to offer blockchain solutions to its clients.
- BMW: The carmaker uses VeChain to prevent odometer fraud in car sales
- LVMH: The luxury brand manufacturer uses VeChain to track luxury leather goods
- Walmart: The retail store chain uses VeChain to track food provenance.
- Groupe Renault: The French automaker has partnered with VeChain to create a digital maintenance ledger for cars.
How to buy VET?
1. Choose a crypto exchange
There are numerous cryptocurrency exchanges and exchanges that range from easy-to-use systems to complex dashboards for advanced traders.
Because VET is so popular, you’ll be able to purchase the token on most cryptocurrency exchanges, but it’s advisable to stick to a few of the more popular exchanges like Binance, Kraken, Coinbase, etc. Different platforms come with different fees, security measures, and may include other features, so it’s a good idea to do your research before signing up.
2. Create an account and confirm it
Start with account registration, which is completely free on the aforementioned platforms. For added security, 2FA – two-factor authentication – is also enabled. This way, you and your device are the only ones who can grant access to the account.
You are then taken through a KYC process, which is providing personal information – ID card/passport/driving license details, proof of address (e.g. bank statement or utility bill).
After completing these steps, you are ready to buy, sell and trade VeChain (VET), as well as take advantage of various services such as staking.
3. Fund your account
Once your account is registered and verified, you need to fund the account so you can start taking advantage of the platform’s buying and trading services.
The main deposit options are:
- Credit/Debit Card
- Bank deposit
- Peer-to-peer (P2P)
Where to buy VET?
