What is VeChain (VET)?
VET is the native token of VeChain, also known as VeChain Thor, which is a public blockchain. It draws its value from initiatives taken by members of the blockchain to address pressing economic issues. If you want to know the current VeChain price, look at the VET price chart featured above.
The VeChain crypto project seeks to support the fourth industrial revolution by building an ecosystem that addresses significant data challenges for a variety of international industries (medical, energetical, food, and others).
VeChain is trying to accomplish this by utilizing the potential of trustless data, distributed governance, and the Internet of Things technologies (RFID and NFC chips, QR codes, environmental data sensors, etc.).
VeChain network is known for its efficiency, strong security, and simple data tracking due to the transparent technology without a single point of control it employs. Besides, by using trustless automation through smart contracts, VeChain manages to reduce transaction costs.
The selling points of VeChain are such features as the dual-token system, innovative protocols, and the BaaS (Blockchain-as-a-Service) platform called ToolChain.
Considering the dual-token system, VeChain utilizes VET and VTHO tokens. The dual-token method is used to prevent fee changes and network overload. It’s discussed a bit more thoroughly below.
Moving on, one of the innovative protocols used by the VeChain crypto project is the TX fee delegation. It's a system that makes it possible for regular people to use decentralized applications (dApps) without having to buy crypto. They simply pay a direct transaction fee formed by their interactions with dApps.
Talking about ToolChain, it’s great for businesses without a blockchain background, because it makes the integration of IoT and blockchain frictionless. ToolChain manages to accomplish that by employing the data BaaS layer, which includes all necessary components.
Lastly, there is one more feature that is worth mentioning - VeChain IDs. These are unique identifiers that are allocated to each product and are used to track their steps on the supply chain.
The Story of VeChain
The VeChain network was developed by Sunny Lu and Jay Zhang. Before involvement in this project, Lu was the CIO and COO of Louis Vuitton China. Talking about Jay Zhang, prior to co-founding VeChain in 2015, he spent 15 years as a senior manager in finance and risk management for PwC China and Deloitte UK.
Overall, VeChain has more than 90 people working on the development of the network. Gu Jianliang, who has tremendous experience in the field of IoT, is the CTO of the company.
Besides, in 2017, the Vechain Foundation was developed. It’s a non-profit organization in charge of network construction, technology research, development, and governance. Additionally, it's crucial for business expansion because it fosters and supports partnerships with organizations that could be interested in offering blockchain technology as a service.
It’s important to note that VeChain was not always a public blockchain. In 2015, after it was launched, VeChain was a private consortium chain, which was a semi-decentralized network that was not accessible to everyone. Besides, its native token at that time was VEN (an ERC-20 token). However, in 2018, VeChain released a public blockchain called VeChain Thor. Along with it, the VET token was released. VEN token holders had to swap for VET tokens at a 1:100 rate. After they all did that, VEN tokens were deactivated.
VeChain Consensus Mechanism
VeChain employs a Proof-of-Authority (PoA) consensus mechanism mostly known for its low computing power usage. It uses reputable validators to create blocks, giving a network computing capability. Therefore, it’s especially appealing to businesses that demand assurances regarding the reliability and integrity of validators operating the network.
Besides, by using a Byzantine Fault Tolerance (BFT) algorithm with identity and reputation as forms of stake, PoA enables faster transactions.
Overall, 101 reputable validators (Authority Nodes) create new blocks on the blockchain using VeChain Thor's implementation of PoA. In order to become an Authority Node, a user has to:
- Submit a formal application
- Undergo full KYC
- Have dedicated hardware
- Hold at least 250 million VET
- Be approved by the VeChain Foundation
VET VS VTHO
VET is the main token of the network and it serves as a value transfer medium when creating VTHO tokens. VTHO is used to cover gas fees, while VET is the token utilized for transactions and other operations. Adjusting certain factors, such as the quantity of VTHO needed to process a transaction or the pace at which VTHO is created, ensures that network usage fees are kept steady.
VET has a max supply of 86,712,634,466 tokens. VTHO, on the other hand, is created automatically, based on VET holdings.
To put it another way, anyone who possesses VET coins receives VTHO. Besides that, they are able to utilize the VeChainThor network for free, given that the transactions they make don't take up more VTHO than they produce.
However, note that VTHO can also be exchanged and traded. This enables users to obtain more VTHO for carrying out more complex tasks like running blockchain applications.
Besides, VET holders automatically generate a tiny amount of passive income in VTHO. However, the majority of the VTHO tokens utilized in a VET payment are burned.
If you're wondering how to buy VET tokens, it's pretty easy. All you have to do is choose a crypto exchange you want to use, and then, either purchase it using fiat (if the exchange allows it) or trade using other crypto assets.
Check out the VeChain price chart above if you intend to buy VET coins. This is crucial because the VET price is quite erratic. It’s an unavoidable characteristic of crypto assets due to the volatility of the entire crypto market. Thus, the same factors that affect market-wide prices also have an impact on the VET price.
So, it's pretty hard to say whether VET is a good investment, just like it's hard to say that about any other crypto asset. This is the case because there are always so many different factors that can influence the answer to the question "Is it a good investment?"