What is Vechain?
VeChain is a public blockchain company that focuses on providing solutions to enterprise-level supply chain management. VeChain accomplishes this by providing cutting-edge solutions for enterprises in the form of an internet of things (IoT) devices that track goods and services from origin to destination.
There are two main layers to the VeChain blockchain, an IoT-based token layer that uses a blockchain to capture and record activity from IoT devices, and a smart contract layer that companies can leverage to track ownership of their goods and services as well as build their own decentralized applications (dApps).
Before VeChain had a blockchain network of its own, it launched as an ERC-20 token with the ticker symbol VEN. (Check out the Ethereum page for more background on ERC-20 tokens).The following year, the Vechain mainnet — the VechainThor Protocol — went live on June 29, 2018. When the mainnet launched, VEN could be converted to VET at a 1 VEN to 100 VET ratio. In addition to VeChain’s native currency, the VET, the launch of the VeChainThor protocol created a second token for the VeChain mainnet, Vechain Thor.
There are two cryptocurrencies native to the VeChainThor protocol, VET, a token used as a store of value and for peer-to-peer payments, and VTHO, a token used to pay for smart contract opcodes — you can think of VTHO as a currency used to make gas payments.
VET holders are rewarded in VTHO for keeping VET in their wallets; the current rate they are rewarded at is .000432 VTHO per VET, and the reward is distributed to each user daily.
Nodes on the VeChain network are rewarded additional VTHO tokens for their contributions to the network. When payments are made in VTHO, 70 percent of that payment is taken out of circulation and token-burned, the other 30 percent is awarded to master nodes on the VeChain network.
A node is created if you are a VET holder with a certain amount of VET in your wallet; when you have the minimum amount of VET to become a node (600) in your wallet, you can join the VeChain Node program by going to the Rewards tab in the mobile wallet and opting in.
There are two classifications of nodes on the VeChain network, authority nodes, which validate transactions, group them, and add them to the blockchain; and economic nodes, which don’t validate transactions, but play a role in stabilizing the VeChain ecosystem.
Authority nodes are the only nodes that can become validators on the network. Authority nodes require special hardware to support the network and require individuals interested in operating authority nodes to apply before they are approved to run the node. On the other hand, economic nodes do not require special hardware nor application.
There are eight different types of nodes on the VeChain network, and each node has a different maturity date. There are,
Strength nodes (Economic): Strength nodes are node operators with between 1,000,000 and 5,000,000 VET in their wallet. The maturity date on a strength node is ten days.
Thunder nodes (economic): Thunder nodes are node operators with between 5,000,000 and 15,000,000 VET in their wallet. The maturity date on a thunder node is 20 days
Mjolnir nodes (economic master node): Mjolnir nodes are node operators with between 15,000,000 and 25,000,000 VET in their wallet; if you are a Mjolnir node then you are considered a master node. The maturity date on a Mjolnir node is 30 days.
Thrudheim nodes (authority master node): Thrudheim nodes are node operators with 25,000,000 VET or more; if you are a Thrudheim node, you are considered a master node. The maturity date on a Thrudheim node started on 12/21/17.
There are also VeChain X nodes; X nodes serve the same functions as regular nodes, however, they provide node operators with additional rewards, come with higher account minimums for membership, and have different maturity dates than the regular VeChain nodes.
There are four different types of VeChain X nodes:
VeThor X Node (economic): VeThor X Nodes are node operators with between 600 and 1,600,000 VET in their wallet. There is no maturity date on a VeThor X Node.
Strength X Node (economic): Strength X Node’s are node operators with between 1,600,000 and 5,600,000 VET in their wallet. The maturity date on a strength node is 30 days
Thunder X Node (economic): Thunder X nodes are node operators with between 5,600,000 and 15,600,000 VET in their wallet. The maturity date on a Thunder X node is 60 days.
Mjolnir X Node (economic): Mjolnir X Nodes are node operators with 15,600,000 or more VET in their wallet. The maturity date on a strength node is 90 days.
All of the X Nodes are entitled to what VeChain calls reward type 4; reward type 4 is a fund created by the VeChain foundation that contains 50 million VET in it, all of the VTHO generated from this fund are distributed among all of the X nodes. In addition, every X node–except for the VeThor X Node–is entitled to what VeChain calls, reward type 3; reward type 3 is a special pool created by the VeChain foundation that contains 150 billion VET in it, the VTHO generated from this pool is distributed among all of the X nodes–except the VeThor X nodes.
Source: VeChain Insider
*It is important to note that if any of the X nodes lose their status as an X node (fall below the minimum VET requirement), then they lose their X status as well as their ability to achieve X status forever*
Governance and Consensus
The VeChain blockchain is governed through a board of officials. The Board of Steering Committee–also referred to as the VeChain Foundation–is a group of 101 validators that represent the interest of VeChain stakeholders. Individuals must apply or be elected to the validator positions on the network. Any individual on the network with more than 1,000,000 VET is allowed to vote in the election for the validators. The 101 validators are responsible for making decisions regarding the networks roadmap, technology, development, public relations, etc.
What is VeChain? Use cases:
VeChain’s goal is to optimize enterprise-level supply chains by providing solutions that prevent mishandling and counterfeiting of goods and services while increasing the trust between every party involved in a transaction. VeChain achieves this is by giving goods and services that flow through a supply chain VeChain Identities (VIDs) — smart chips (NFC chips, RFID trackers, QR codes, etc.) that track each item at each location in the supply chain. VeChain uses these VIDs to check key metrics regarding the good or service on the supply chain. The data is uploaded to the VeChain blockchain in real time and can be analyzed to see what went wrong (if anything goes wrong) and if improvements can be made to the supply-chain based on the data being brought in by the VID’s.
VeChain has emphasized the use of their VID’s in five key industries; cold-chain logistics, to see where a product on the cold-chain spoiled and why, Automotive, to provide a digital passport of an automobile’s — as well as it’s part’s — history that can be accessed by third parties for transparency purposes, health care devices, to track the journey of medical devices from inception to final destination, luxury markets, to track the creation of luxury goods from creation to destruction and to prevent counterfeiting, and digital carbon, so that VID’s can track the carbon admission savings of participants in this program and reward them with carbon credits for their efforts.