The VeChain project was born out of the desire to provide a robust, blockchain-powered infrastructure for data management and the Internet of Things (IoT) applications, with the aim of resolving real-life economic issues faced by modern-day businesses. While the scope of the application of VeChain is constantly broadening, its main drive have been issues such as frauds and counterfeit goods in which this platform serves to provide guarantees for a product’s authenticity, source tracing and adherence to safety standards.
VeChain is all about managing information relevant to businesses, such as data on various stakeholders, events or products, with blockchain playing the role of protector of the authenticity of various digitized data. Its business model revolves around the recognition that trust is an important resource and a common point of interest for both businesses and their customers. The platform’s main components are the VeChain network (VeChainThor), which implements the platform’s native Proof-of-Authority consensus protocol, and its dual token system encompassing VeThor (VTHO) and VeChain (VET) tokens.
Founded in Singapore in July 2017 as a non-profit organization, the VeChain Foundation is the overseeing body for the VeChainThor protocol and VET blockchain as the foundations of VeChain. It was previously simply known as VeChain (VEN) but was rebranded in 2018, the same year in which it launched its mainnet. Back in 2015, the project was initially thought out as a platform dedicated to tracking luxury goods. Sunny Lu, the project’s co-founder, and CEO, worked with some of the largest global companies and made this experience a part of VeChain’s mission to harness blockchain for the needs of the business world.
Based on this, the VeChain team set out with the aim of meeting several specific goals by means of their platform:
VeChain’s VTHO represents the underlying cost of using VeChain and will be consumed after certain blockchain operations are performed. The function of VET is to serve as a value-transfer medium, or in other words, smart money, to enable rapid value circulation within the ecosystem based on VeChain. VET is also awarded to network nodes that help facilitate the ecosystem via their operation as a form of incentive. These economic nodes are not part of the consensus model (see below) and are expected to act as a stabilizing component of VeChain.
The system is designed in such a way that VTHO is generated automatically by holding onto VET tokens. In other words, whoever holds VET will be given VTHO for free and be able to use VeChain for free as long as the operations performed consume less than the VTHO generated. The VTHO tokens can be transferred and traded to allow users to acquire extra VTHO for performing larger scale of operations such as running applications hosted on the VeChain Thor blockchain.
VeChain’s governance model is designed to promote balance between decentralization, centralization transparency and efficiency. The governing body is the Steering Committee which is elected by the members of the VeChain community. The network relies on the Proof-of-Authority (PoA) consensus. VeChainThor platform features stakeholders consisting of VET holders who sometimes get assigned specific roles, such as Smart Contract Owners and Authority Masternode holders. The number of Authority Masternodes is limited to 101 and they are required to be authorized by the VeChain Foundation and VeChain community.
Transactions and blocks on the network are validated by approved accounts which are designated as validators. Validators run software allowing them to put transactions in blocks. Prior to that, these individuals or entities must voluntarily reveal their identity and provide information on their reputation in order to be granted the right to validate and generate blocks. The process is automated and does not require validators to constantly monitor their computers. It, however, does require keeping the computer (the authority node) uncompromised.
Based on this, VeChain promotes this consensus model as offering the following key benefits:
The VeChain platform features several components which, together with supported technologies, make up the bulk of its architecture:
As of September 2019, there were more than 55.5 billion VET tokens in circulation, out of a total supply of around 86.7 billion. Its market cap stands at USD 186 million as of the time of writing, while its all-time high saw the currency’s cap being valued at more than USD 1 billion, back in September 2018. The coin, VET, can be found on cryptocurrency exchanges such as Binance and HitBTC. The official VeChainThor Wallet is available for Android and iOS.
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