VeChain (VET) Explained

Everything You Need to Know About VeChain’s History and Technology

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VeChain is a cryptocurrency and software that works as part of the VeChainThor blockchain, supporting two unique cryptocurrencies and smart contracts. VeChain is particularly useful for logistics and tracking, potentially leading to interest among the shipping, retail, manufacturing, warehouse, grocery, and other industries.

The unique supply chain focus could make VeChain an interesting part of your cryptocurrency strategy. Keep reading to learn more about how VeChain works, the special features it offers, and whether investing in VeChain could make sense for your cryptocurrency portfolio.

What Is VeChain?

VeChain is a cryptocurrency network focused on supply chain and logistics needs. The VeChainThor blockchain—the public blockchain behind VeChain—runs the VeChain token (VET) and the VeThor token (VTHO). The VeChain token is used to transfer value across the network, while the VeThor token is used as energy to power smart contract transactions. 

VeChain officially launched in 2016 under the leadership of a Shanghai-based team following about a year of development. It’s now run by a team of more than 100 workers globally, offering blockchain-as-a-service (BAAS) products to customers in the logistics and data management industries. According to its white paper, VeChain’s mission is to “enable the blockchain community, business owners, enterprises, governments, or any other individual to move their business activities to blockchain effortlessly,” with an emphasis on the fact that technical knowledge is not required.

As of this writing, the market capitalization of VeChain is $6.8 billion, making it the 21st largest cryptocurrency. VeThor has a $286 million market cap and ranks as the 150th largest digital currency.

Of the two tokens from the VeChainThor blockchain, VeChain is the larger, more influential digital token.

Special Features of VeChain

VeChain has many special features available. The main features that set VeChain apart are its use cases for tracking goods and data. Businesses that require a verified chain of ownership through production, shipping, or other processes could use VeChain for that purpose.

Using the smart contract features of VeChain, users can track ownership and control of any number of goods. For example, an electronics manufacturer can track the process of products to distribution using VeChain. The highly regulated marijuana industry, for example, could use VeChain to track seeds, plants, sellable products, and sales for end-to-end compliance requirements. If a company needs to buy it or sell it, you can track it using VeChain.

In its simplest terms, smart contracts are programs stored on a blockchain. They run when predetermined conditions are met, and can automate workflow, triggering the next necessary action when the conditions are met. 

The VeChain whitepaper offers potential use cases in both the food and pharmaceutical industries. In both of these industries, it may be critical to know if a product is safely sourced and stored through various owners and facilities. VeChain is also useful for anti-counterfeiting, digital vehicle passports, or any open financial transaction.

VeChainThor could support new currencies and other smart contracts. Currencies on this blockchain follow the VIP180 standard, developed uniquely for VeChain, similar to ERC-20 tokens on the Ethereum blockchain. This means that, unlike the energy-intensive, proof-of-work system used by Ethereum (and Bitcoin), VeChain uses a proof-of-authority strategy to enable an efficient network that uses relatively little electricity.

   VeChain
Inception June 2016
Already Mined/ Total Supply (as of Aug. 12, 2021) 86,712,634,466
Special Feature Supply chain tracking, VIP180 tokens

How To Mine VeChain

VeChain is not minable. Instead, it runs on a proof-of-authority where the largest participants act as network validators. That means a smaller number of computers do the work to validate and operate the VeChain network. For individuals, it means you are unlikely to have an opportunity to mine VeChain.

Those with a strong reputation may be elected as validators by other network participants. This is similar to proof-of-stake coins, where those with the largest stake in the network choose validators. However, both use far less energy than competitive proof-of-work coins.

How To Invest In VeChain

If you want to buy and own VeChain, you have several options for exchanges and wallets. As a top-25 cryptocurrency, VeChain is widely supported and easy to buy through many major cryptocurrency exchanges. In addition to the official VeChain wallet, you can store your VeChain in a hardware wallet like the Ledger

As with any cryptocurrency, it’s essential to keep your VET in a secure wallet safe from hackers and others who may try to separate you from your currency. Exchanges with VeChain support include Binance, Crypto.com, and Bitfinex, among many others.

Fees and Expenses 

When you transact with VeChain, you’ll need a wallet with enough currency to cover transaction costs. Over the last year, transactions ranged in cost from about 25 cents to around $7.

Notable Happenings 

In April 2021, the VeChain network voted to lower fees, a good sign for those looking to use VeChain as a currency or smart contract platform. This is part of the VeVote system, where users can vote on future changes and upgrades to the network.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.