A guide to the system

VeChain can be described as software that has a goal to promote a network of computers to work a platform that permits businesses to create and also run a decentralized application or (dapps).

This is how VeChain tries to enable higher collaboration between businesses by supplying them with new tools for better data transfer and better supply-chain management.

In the beginning, VeChain was only a solution for supply chain management, but in 2018 they launched their protocol’s mainnet and VeChain rebranded to VeChain Thor, which increased the scope of dapps to incorporate more general data solutions.

Some of the big corporations that use the VeChain blockchain are:

• BMW, this company uses the VeChain blockchain to avoid odometer fraud in automobile sales

• LVMH is using VeChain to help them track luxury leather goods

• Walmart is using VeChain to track food origin.

Essential to running the processes on the blockchain, VeChain has 2 native cryptocurrencies, first is the VET coin, used for voting on changes to the protocol, second is VTHOR, responsible for transaction executions.

VeChain has an official blog where you can find the latest details about this blockchain’s development status and also get an insight into which companies have integrated this blockchain into their business.

Who is the creator of VeChain (VET)?

The Louis Vuitton China former chief information officer Sunny Lu co-founded VeChain with Jay Zhang in 2015. The team of VeChain originally distributed their cryptocurrency (VEN) in 2017 on the Ethereum blockchain and they sold 1B tokens as part of the crowsale, which helped raise about $20 million.

Later on, after they launched the VeChainThor blockchain, the VEN tokens were replaced with VET tokens or VET coins. The swap ratio between VEN tokens and VET tokens was at 1:100.

How does VeChain function?

VeChain blockchain has a goal which is to offer any company the flexibility to launch new sorts of dapps. By building the VeChain ToolChain component, which is a software development kit, the creation of dapps will be a lot easier.

The proof of authority

There is a consensus mechanism also known as proof of authority which VeChain Thor uses to help them regulate the process by which transactions between users are verified and also added the public ledger of VeChain.

Authority Masternodes are users who successfully have verified and added transactions to the VeChain blockchain. If you want to become one of them you will need to stale at least 25 million VET coins and also submit your identifying information to the Vechain Foundation.

The disadvantage of this proof of authority or PoA mechanism, which allows you and helps you process big transaction volumes faster, is that it relies on a central authority responsible for checking and authorizing which users can partake in processing transactions.

The good news is that VeChain’s team is working on simplifying and improving their PoA.

VeChain’s 2 token design

VeChain blockchain is using 2 native crypto tokens, which allow their software to work properly. The VET token is used for storing and transferring value, and the VTHO token is used for all the transactions on the VeChain’s blockchain.

This design plays a major role in isolating the price volatility of the VET crypto coin from the fee of computations on the network, this allows applications on VeChain to charge stable fees. The VTHOR supply is being adjusted to sustain a stable price for the transaction on the blockchain.

Miners receive VTHO fees for computations processed by the network, which is very similar to how the Ethereum blockchain functions. A more complex computation will require more VTHO by the given program.

Finally, the nodes which are staking VET coins can vote on network upgrades, and after every block, they are being rewarded with VTHO.

Link: https://www.vechain.org/