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What you’re about to learn…
- What is VeChain
- What are VET tokens?
- The importance of VET
- How to get tokens
- How it will change supply chain forever
What is VeChain?
Vechain is a blockchain-based IoT project that was founded in 2016. The Vechain team has been developing Vechain from the ground up with an emphasis on solving the trust issues between businesses and consumers, specifically in food supply chains.
If SaaS and blockchain got together and decided to start a family, the resulting offspring might well resemble VeChain. The technical dependability and resilience of blockchain coupled with the practical application of SaaS; Blockchain-as-a-Service, if you like.
Blockchain companies have been around for some-time now but few have caused as much interest as VeChain. What follows is a quick dip into the world of the VeChain and in particular VET tokens — what are they, how do you use them, where can you get them, and how do you store them.
In this post, we’ll explore Vechain’s vision for the future of business transactions and how Vechain could potentially solve some of today’s most pressing global problems.
The Vechain Foundation has developed a blockchain-based distributed infrastructure that allows enterprises to electronically create and manage their own digital assets.
In simple terms, VeChain is a Singapore based technology company that has developed a supply chain management tool. It uses blockchain technology to streamline business processes and ensures the authenticity and quality of products purchased.
Vechain’s smart chip and IoT sensor technology is the keystone for this infrastructure, allowing manufacturers to track important data such as product origin, authenticity of goods – even temperature changes.
The Vechain Foundation has a long-term mission to establish VET as one of the top global cryptocurrencies by market capitalization. The company plans on accomplishing this goal through enterprise adoption combined with a strong focus on rewarding partners who adopt vechain tokens (VET).
VeChain provides enterprises with solutions that involve tracking products throughout their lifecycle while recording environmental data like location or conditions in order to ensure quality control.
VeChain also offers value added services including anti counterfeit measures and supply chain management tools that allow businesses to monitor production processes from start-to-finish.
This is achieved by cleverly incorporating sensor chips into manufactured goods and products. These are then used to track items from the point of construction to the point of consumption.
A working example would be a Louis Vuitton bag. From when it’s made to when it is worn, it will pass through multiple hands. VeChain ensures that each of those ‘hands’ is legitimate and can be accounted for.
Although this doesn’t sound like a major technological breakthrough, it does represent a huge step forward for companies operating in the luxury goods arena for example.
Every year billions of dollars of revenue are lost to counter-fitters and pirates, as well as the less quantifiable but equally as damaging effect this has on the company’s brand and reputation.
Being part of a blockchain network means that the information contained on the embedded sensor chip is incapable of being changed or altered.
As a result of this, every step in the supply chain is visible, traceable, and able to be authenticated.
What Exactly are VET tokens?
The Vechain token (VET) is the native currency of this network. It provides access to various marketplaces or asset exchanges, as well as other key features.
Vechain’s vision of tomorrow’s businesses looks much different than what we have today – transactions will be seamless and automatic with no need for third parties so there are fewer opportunities for disputes between buyers and sellers.
This new era will rely on self-automated execution without any manual human intervention needed.”
“A world where trust can move from being an affirmation by one party based on information they’ve received from another party, to something determined mathematically.
Like all blockchain-based platforms, VeChain relies on the use of tokens — two in fact. The first, the VeChain Token (VET) is used to transfer value across the network.
Vechain’s token symbol is VET and it has a max supply of 100,000,000,000 tokens. They are ERC20 compliant tokens which can be stored in any wallet that supports the Ethereum blockchain.” The current marketcap for VET is $13 billion USD (according to coinmarketcap.com)
The other, the Vechain Thor Energy (VTHO) token, is, as the name suggests the energy source needed to power transactions.
The VeChain Token or VET is essentially the form of currency used to conduct business on the VeChain network. The more VET you have, the more readily available the platform’s resources become.
If for example, a manufacturer wants to use VeChain to track their product through the supply chain, the transaction fee required to do that is paid in VTHO. Effectively, therefore, one can’t be used without the other.
VET generates VTHO, meaning the more VET is held the more VTHO is generated. With that, of course, comes more opportunities to interact with the VeChain network.
Why Have a Two-Token System?
Initially, the two- token system may seem a bit unwieldy. Why not just use VET to pay VeChain’s required transaction fees? The answer is down to variability.
In the ‘traditional’ blockchain model, transaction fees fluctuate according to the token’s demand and network usage, a classic supply, and demand scenario.
As a result, the single token approach can become expensive and difficult to determine as a fixed business cost. VeChain’s two token model provides a more stable working environment.
The rates at which tokens are traded on the open market don’t have a significant impact on the cost of using the network as any variables are managed by the developer. This makes VeChain an ideal choice for general commercial use.
Currently, each VET generates VTHO at a rate of .000432 per day, but typically users of the VeChain network need more VTHO than the VET they own can produce. The obvious solution to this issue is to buy VTHO from other users.
Doing this, though, will once again affect the price. This is the situation often seen in the single token blockchain set up. VeChain overcomes this issue by being able to adjust two key components in their business model; the amount or number of VTHO needed per transaction (which tends to hover around 20 – 30 tokens per transaction) and the rate at which VET generates VTHO.
How to Get Tokens
VeChain’s two-token system can present something of a ‘chicken and egg’ situation. As one token’s use is determined by the other, which is the better to have and easiest to get hold of?
The most straightforward answer is VET. As previously mentioned, VET will generate VTHO on a daily basis and it’s VTHO that’s needed to gain access to the system.
VTHO can currently be bought on a centralized trading site like oceanex.pro or from a decentralized site like vtho.exchange. VET is widely traded on most cryptocurrency sites. To buy VET follows these steps:
- Identify a cryptocurrency exchange site that trades in VET. A quick internet search will give multiple choices.
- As trading on most exchange sites can only take place in cryptocurrencies, it will probably be necessary to purchase some form of cryptocurrency, Bitcoin or Ethereum to get started. The process for making this initial purchase is usually straightforward but will vary from site to site.
- Duly registered and sufficiently funded VET can now be bought and sold on the exchange site of your choice. Again, the exact procedures for transacting will vary according to the site being utilized.
Where to store VET
As with other cryptocurrencies, VET can be stored in a virtual ‘wallet’ enabling easy swaps to take place between the currencies held. There is some debate as to which wallet is better but similar to what exchange site to use the choice of wallet to store VET is more a matter of personal choice and compatibility with existing software.
See our review on the most popular virtual cryptocurrency wallets that will store your coins offline.
Things to Consider When buying VET
Buying and selling any form of currency, crypto or otherwise, comes with an inherent risk. For some, that’s the appeal, but it is always strongly advized to thoroughly research and carry out due diligence before reaching for the credit card and hitting the ‘buy’ button.
Like all crypto, it’s a risk no matter when you buy. We don’t give financial or investment advice but we personally prefer to buy coins that have strong fundamentals and while it’s still too early to tell, the Vechain company appears to be doing a lot of things right in this space.
One potential risk associated with investing in VET or any other cryptocurrency could be its volatility. “It’s important to note that because there are many unknown factors about this project still yet to develop or reveal themselves, it carries inherent high risks.” (Coinbase)
Additionally, regulatory uncertainty can increase prices unpredictability since it may take time before clarity emerges .
The pros of investing in VeChain and VET
It is important to note that Vechain may be a good investment for the future. The company has its own blockchain and cryptocurrency, which means it operates on decentralized technology as opposed to traditional centralized tech like Facebook or Google (which are vulnerable).
This could make Vechain more secure than other cryptocurrencies if they become targets of cyberattacks in the future.
A focus on solving issues with supply chain management including tracking items from factory floor through end user (this can also help prevent counterfeiting)
In 2021, VeChain has certainly been one of the most successful blockchain platforms with regards to attracting partners and investors and price appreciation.
Less than six months ago the coin was under a penny and last week it hit $0.28 all time high.
It’s a smart and well-considered project that benefits from high levels of transparency and governance and addresses a growing commercial need.
So while there’s still risk involved with investing in any crypto, Vechain seems to have some potential advantages over others.
With everything from wine to car parts falling victim to counter-fitters, a system that is able to disrupt those activities would seem to have a promising future.
VeChain has successfully found a way to ensure the legitimacy and authenticity of goods throughout their production and distribution cycles. As such, it has provided the supply chain and logistics industries with a workable solution to a trillion-dollar problem.
Platforms like VeChain will continue to develop and evolve, as will the opportunities to invest. The project has its fans as well as its critics. The fact that VeChain has a tangible, working product that addresses a current and very real issue, (not something seen too often in the crypto world), does seem to make this a more attractive purchase option. Whichever investment route you choose to go down, the more you know in advance, the more educated the guess will be.