What is VeChain? Vechain is a blockchain network that was primarily developed to strengthen and make supply chain management more efficient. It also intends to improve business operations and enhance the flow of information amongst complex supply chains through the use of its distributed ledger technology or DLT.
In this article, we’re going to explain what Vechain is and how it functions, Vechain’s consensus protocol, what the difference is between vet and VTHO, and what my thoughts are on Vechain.
What is Vechain?
The Vechain network was founded by Sunny Lu in 2015. Vechain started as a subsidiary of bitsy which is one of the major blockchain firms in china. It was initially introduced on the Ethereum network at that time its native token used to be the ven token. In 2018 Vechain migrated to its own blockchain and relaunched itself. It was at this moment that the ven blockchain became Vechain thor also known as vet blockchain.
What are VET and VTHO?
The Vechain thor network involves the utilization of two native coins, these include VET and VTHO. VET is the token that carries value or smart money throughout the network. All the transactions that occur on the decentralized applications or adapt will use vet as the medium of transactions. It’s generally available to be bought and sold on multiple exchanges.
VTHO stands for Vechain thor energy, It’s utilized to power the transactions that take place on the Vechain network. These currency functions are similar to Ethereum’s ether which is used to fuel transactions on its network. The distinction though resides in the efficacy of VTHO currently the issue of high gas fees afflicts Ethereum and the significant price volatility of ether is a major reason for failed transactions. VTHO has been designed to be efficient in this regard.
For example, if the first estimate of VTHO is inaccurate then both parties can mine extra VTHO thereby ensuring that the transaction goes through.
How does Vechain work?
The purpose of Vechain is to establish a trust-free and distributed business platform. This will enable transparent information flow and efficient collaboration as well as high-speed value exchanges. The major purpose of Vechain has always been to disrupt the present supply chain systems which are tremendously inefficient. Currently, the supply chain data is segmented and distributed between multiple stakeholders. This makes the information flow frustratingly slow. Vechain aims to overcome this problem by leveraging blockchain technology.
According to its whitepaper, Vechain can quote break this asymmetric information dilemma and let the ownership of data return to and empower its owner-end quote. The purpose of the network is to provide a unique and complete view of all the information that’s required for a specific product. In addition to that crucial information like a product’s business activities, storage, transportation, supply, and demand will also be delivered to all the relevant and permitted parties.
Internet of things (IoT)
Vechain also has potentially tremendous applications in the sphere of the internet of things also known as IoT. It will allow physical products to have a unique digital identity. This will be done by RFID or radio frequency identification as well as QR codes and NFC or near-field communication. The special thing about having this digital identity for each product is that it will allow the tracking of these products at every level of the supply chain. The sensors that are used for this purpose are designed by Vechain itself. Since blockchain technology is being used the recorded data can’t be modified, hence any disturbance in the supply chain can be correctly tracked.
Related: What Is The Blockchain Trilemma?
Consensus protocol employed
The consensus protocol employed in the Vechain blockchain is proof of authority.
Proof of Authority
This protocol distributes votes among vet holders who may then utilize these votes to affect the governance of the blockchain. There are 101 master nodes that are responsible for validating the transactions on the network.
The distinctive part about the Vechain network is that it doesn’t allow anonymous nodes and in order to subsequently become an authority, master node identification must be disclosed. According to the Vechain consensus protocol holders who have completed KYC verification and have a minimum of one million tokens receive approximately thirty percent of the votes. Twenty percent of votes are given to people who haven’t disclosed their names but hold an equal number of tokens.
Economic master node
Another sort of node that occurs within the Vechain network is the economic master node. These nodes do not work like typical blockchain nodes, as they don’t validate transactions and neither do they produce blocks. The objective of these nodes is to offer a check on power and governance within the network. This aim is achieved by dispersing a set number of votes to each economic master node. This number of votes is directly proportionate to their vet ownership. Each 10,000 VET possessed by an economic master node will get one vote.
Where can you buy Vechain or VET?
You can purchase VET through the Binance or Okex exchange in the same way that you could buy any other cryptocurrency. You can either place a market buy or a limit buy, with a limit buy you select the price you’re ready to pay and your order gets filled once the token price hits your limit price. However, if you want to get your hands on the token sooner you can make a market order, where you agree to pay the current price and have your order completed almost immediately. If you’re interested in purchasing Vechain you can do so by visiting Binance or Okex.
The most significant worry with Vechain is related to its structure. A phenomenon known as blockchain bloating seems likely to be an annoyance in the future. Blockchain bloating refers to a possibly unmanageable increase in the size of a blockchain. A pertinent illustration of this would be the fact that an archival Ethereum Geth node requires one terabyte of hard drive space, which is beyond the overall capacity of most mid-range pcs and laptops.
A similar albeit more serious problem could emerge within the Vechain network as the supply chain data takes up significantly more space than the transactions on a typical blockchain network.
Another difficulty with Vechain is that its proof of authority protocol typically leads to significant degrees of centralization, as there are only a limited number of master nodes in the network. However, with a system of voting in place, some kind of decentralization is at work. According to the founders of Vechain, they want to create a balance between centralization and decentralization inside their network.
As always I hope you got a great deal of value from this article. So what are your thoughts on Vechain did you learn something new about Vechain that you didn’t know before leave a comment below.