What is VeChainThor (VET)?
Originally launched simply as VeChain (VEN) in 2015 as a blockchain designed for industrial supply chain applications, in 2018 it was modified and rebranded as VeChainThor (VET). The founders of VeChain are Sunny Lu and Changpeng Zhao – the latter best known as the founder and CEO of the world’s largest cryptocurrency exchange, Binance.
Unusually, the VeChainThor ecosystem is powered by two tokens – VET (Smart Money) and VTHO (Energy). This is intended to separate the cost of using the blockchain from speculation-fuelled market volatility.
The VeChain Foundation helps enable the ecosystem, focusing on tech development, infrastructure utilities and services, and administering a large reserve to back growth. An elected Steering Committee oversees various committees and represents the interests of VeChain stakeholders.
VeChain (VET) Basics
VeChain uses the VeChainThor blockchain. Instead of the more common proof-of-work or proof-of-stake, it uses a proof-of-authority consensus mechanism – this sees 101 Authority Masternodes, which are vetted by the foundation, used to verify transactions.
According to the VeChain Foundation, this system minimises the amount of computational power required to reach consensus, and coupled with the built-in smart contract, avoids the possibility of hard forks because an Authority Masternode fails to upgrade.
In common with many other cryptos, VET can be staked to help secure the blockchain network. To stake directly, you must first create an account on the VeChainThor blockchain. Once you are a registered delegate, you can choose how many tokens to stake for a set period. Stakers are rewarded with VTHO tokens – the energy token of the VeChainThor network.
You can also stake VET through platforms like Binance and Exodus.
VeChainThor (VET) Adoption & Usability
As previously mentioned, initially, VeChain was focused on industrial supply chain use cases, with early partners including firms like Renault, BMW, Microsoft, Walmart China, Bayer China, BYD Auto, PICC, Shanghai Gas, LVMH, D.I.G. and ASI Group.
However, VeChainThor is becoming increasingly popular with developers building dApps and for NFTs. For example, by December 2022, VeSea, VeChain’s most active NFT marketplace, had minted over 134,000 NFTs.
At the time of writing, in early December 2022, VET was the world’s 36th biggest cryptocurrency by market capitalization, at just under $1.4 billion (CoinGecko data). VET can be readily traded on many exchanges, and can be used for payments in its own right – though it is not widely supported yet.
VeChain (VET) Fees & Speed
Although VeChain transaction fees have been relatively low for most of its life, and stood at around $0.29 as of the start of 2021, they did spike to over $7 by the end of March of that year. The project’s Steering Committee then took action to significantly reduce the fees. In 2022, the project completely removed transaction fees for dApp users. Transactions on VeChain are usually completed within a few minutes, making it one of the faster blockchains.
VeChain Security and Safety
VeChain’s proof-of-authority consensus mechanism is touted to be extremely secure, while also very energy efficient. However, as always, third party platforms like wallets and exchanges can be weak points and present vulnerabilities.
Security and safety tips:
- Don’t leave your VET on-exchange for longer than absolutely necessary. If you are not currently trading, transfer them to a local wallet for short-term storage or staking.
- For long-term storage or staking, keep your crypto in a hardware wallet.
- Always keep your wallet keys in multiple safe places – they cannot be recovered.
- Never tell anyone about your crypto holdings. No matter how secure your storage is, if you or your loved ones are physically threatened, you’ll probably hand over your personal keys.
Like most cryptocurrencies, VET has experienced significant price volatility since launching. For example, despite trading at under $0.01 for most of 2019 and 2020, on 19 April 2021, VET hit an all-time high of over $0.28. However, by the time of writing in early December 2022, it was trading at just under $0.02 (CoinGecko data).
Final Word on VeChain (VET)
In a sea of crypto projects that don’t seem to have any real intrinsic use cases, VeChain stands out as one of those that most certainly does. The underlying technology has proven itself, and the ecosystem has seen a lot of activity. However, as with similar projects, the real key to long-term success hinges on mass adoption.
Of course, looking at VET as a cryptocurrency in its own right, its long-term success entirely depends on that of the wider VeChainThor ecosystem. We’d say VeChain is definitely a crypto to keep an eye on, but you should make sure you thoroughly familiarise yourself with the project before getting involved.