What is VeChain? A guide for beginners

VeChain is a blockchain-based business ecosystem. VeChain aims to improve business processes and supply chain management globally and build a trust-free and distributed business ecosystem for transparent information flow, efficient collaboration, and high-speed value transfers. VeChain aims to combine the decentralized finance (DeFi) and centralized finance (CeFi) sectors to build a balanced platform that provides users with transparent information flow.

The company was founded in Singapore in 2015 by Jay Zhang and Sunny Lu. The VeChain Foundation comprises over 50 blockchain application developers and initially started as a branch of BitSE, one of the largest blockchain companies in China.

In the early days of VeChain, the company focused on developing a unique blockchain protocol that would be specifically suited for enterprise-level use cases. This led to the development of the VeChainThor blockchain, which is designed to be flexible and scalable, while also offering features like smart contracts and decentralized applications (dApps).

As VeChain continued to grow, the company began to focus more on the development of specific use cases for its blockchain technology. This led to partnerships with a variety of businesses in industries such as automotive, pharmaceuticals, and agriculture. VeChain's blockchain technology has been used to track everything from the production and distribution of luxury goods to the monitoring of vaccine supplies.

VeChain first launched its VEN ERC20 cryptocurrency on the Ethereum blockchain as a basis for fundraising. In 2018, the company launched the VeChainThor (VET) blockchain, a public blockchain for “mass business adoption.” VEN tokens were rebranded into VET tokens at a 1:100 ratio. The VET cryptocurrency runs on the native VeChain ecosystem.

The technology on the blockchain has been developing rapidly. Now, it can, for instance, assign a unique identity to a physical product via QR Codes, NFC, or RFID, which are combined with sensor chips to record information at every stage of the supply chain in real-time and link it to the product’s identity. This process runs on a blockchain, making it impossible to alter the recorded data. VeChain helps track and check critical data, and it allows receivers to verify if the goods are authentic. The VeChainThor blockchain uses a consensus protocol called Proof-of-Authority (PoA), which delegates power to certain 101 master nodes in the VeChainThor blockchain, making transactions faster than proof-of-work (PoW) and proof-of-stake protocols (PoS).

VeChain runs two native cryptocurrencies: VET coin for storing and transferring value and VTHOR (VTHO) token for executing transactions on VeChain. VeChain miners earn VTHO fees for network computations, and the VTHOR supply can be corrected for maintaining a stable transaction price. The design isolates the price volatility of VET coin from the computation fee on the network, allowing VeChain applications to charge stable fees.

Many wallets and exchanges list VET as it is popular among users due to its fast transaction speed. VeChain Wallet is a good option for those willing to manage or store the coin.

The VET coin has several use cases, including the ability to stake VET to become a node on the VeChainThor network. Nodes are responsible for validating transactions on the network and maintaining the security and integrity of the blockchain. Node operators are rewarded in VTHO for their services, and the amount of VTHO earned depends on the amount of VET staked.

Another use case for VET is to participate in the governance of the VeChain ecosystem. VET holders have the ability to vote on proposals related to the development of the VeChainThor blockchain, such as changes to the consensus algorithm or new features to be added to the platform.

In addition to its use on the VeChainThor blockchain, VET can also be traded on various cryptocurrency exchanges as its price is subject to market fluctuations.

As of now, VeChain's products are used in various industries such as food safety, health records, and anti-counterfeiting. It is used in the fight against goods counterfeiting through an encrypted chip and tracing the history and life cycle of a product, such as logistics, warehousing, maintenance, and resale. This ensures product authenticity and consumer trust.