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What is a vet coin? VeChain Explained

What is a vet coin?

Using distributed ledger technology (DLT), VeChain tries to increase efficiency in supply chain management and enterprise operations by simplifying these processes and information flow for intricate supply chains.

The VeChain platform consists of two distinct tokens: the VeChain Token (VET) and the VeChainThor Energy (VTHO). The VET token is used to transfer value across the VeChain network, whereas the VTHO token is used as “fuel” or “energy” to power smart contract transactions.

What is a vet coin (VeChain)?

what is a vet coin?
Source: zipmex

VeChain is an enterprise blockchain platform that aims to build a business ecosystem platform that enables transparent information flow, efficient collaboration, and high-speed value transfers.

There are currently many silos of supply chain data that are holding information flow back, preventing information flow from being streamlined across stakeholders.

The white paper of VeChain explains that blockchain technology can solve the “asymmetric information problem” and allow data ownership to return to its owner.

In addition, the VeChain platform provides a 360-degree view of the information necessary for a product and its business processes, such as storage, transportation, and supply, to allow authorised stakeholders and promote market transparency.

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How is VeChain being used?

The VeChain platform, for example, can be used to track quality, authenticity, storage temperature, transportation medium, and last-mile delivery of a medicine pack or an alcohol bottle from the manufacturing facility right through to the end customer.

In order to do so, VeChain uses smart chips or Radio Frequency Identification (RFID) tags and sensors that broadcast key information to the blockchain network in real time from the manufacturing facility to the final customer.

Sensors allow all product parameters to be constantly monitored, and problems, if any, can be communicated back to the affected parties.

Customers and manufacturers are notified if a drug packet is kept outside a specific temperature range, enabling for better quality control and service improvements.

Using the VeChain platform, automobile owners may negotiate better terms and policies with their insurance companies by owning and controlling their data.

Background of VeChain

VeChain was created in 2015 by Sunny Lu, the former chief information officer (CIO) of Louis Vuitton China. Bitse, one of China’s biggest blockchain companies, founded it as a subsidiary, and it is one of the few blockchains with a substantial customer base among established businesses.

VeChain initially ran on the Ethereum blockchain. In 2018, VeChain rebranded itself and moved to its own blockchain. The VEN blockchain was renamed VeChainThor (VET).

The VeChain white paper outlines the platform’s goals. Its initial objective was to disrupt the supply chain industry by making data actionable and transparent. In addition to being a leader in dApps and initial coin offerings (ICOs) utilizing VeChain, the platform seeks to be an IoT intermediary.

VeChain has developed a variety of strategic partnerships to help them achieve their goals. PwC is among those partnerships, and it will utilise VeChain’s blockchain-based solutions to improve product verification and tracking for their clients.

Partnering with Renault, VeChain has created a digital car maintenance book in conjunction with Microsoft and Viseo that can’t be hacked and is the government technology partner for Gui’an, a Chinese economic development zone.

VeChain’s Blockchain Platform

VeChainThor is a public blockchain platform designed for “mass business adoption.” It consists of two tokens, VET and VTHO. VET is the VeChain token used to transport value or “smart money” from smart contracts on the VeChain blockchain. VET is used by decentralized applications running on VeChain’s blockchain to transfer value. It’s available for public investment.

The VTHO token is the token that powers transactions on VeChain, and it is also known as VeChainThor Energy. It is equivalent to the cost needed to execute transactions on its network.

Developers must account for a specific number of VeChain tokens (which are not available to the general public) to conduct transactions for their decentralized applications, much like Ethereum’s ether and NEO’s ‘gas’.

According to VeChain’s white paper, the two-token system is used for effective governance and has an economically stable model for decentralized application developers.

The volatility of Ethereum’s gas token ether prevents the system from having a pricing model. Developers must estimate the amount of ether to use for a transaction. The transaction fails if their estimate is inaccurate. VeChain’s white paper lists several technical improvements that help resolve this issue.

In addition, the VET blockchain allows for Proof of Work (PoW) to be performed for each transaction. This means that people undertaking a transaction may mine more VTHO if their initial prediction was incorrect.

Governance Protocol

The VeChainThor blockchain uses Proof of Authority as its consensus protocol.

VET token holders without know-your-customer (KYC) credentials and holding 1 million tokens are given 20% of all votes, while VET token holders with KYC holding the same amount receive 30% of all votes.

There are 101 master nodes responsible for reaching consensus on transactions in VeChain’s blockchain. Bitcoin requires all nodes to vote on a transaction before reaching consensus, whereas VeChain uses master nodes to reach consensus on transactions.

According to VeChain’s white paper, anonymous nodes are not permitted, and master node status requires disclosure of identity. VeChain’s system purportedly consumes less power and requires no minimum number of validators to reach consensus.

An economic master node, the other type of master node, in VeChain is used as a check on power. These do not generate blocks or ledger records and are used as a master node. Based on the quantity of VET held, each economic master node gets a specific number of votes. Each 10,000 VET held by an economic master node results in one vote.

VeChain’s protocol consolidates voting into a master node system to achieve a balance between centralization and decentralization. However, the founders’ goal has always been to achieve this balance.

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