In this analysis you will get a chance to learn more about the VeChain cryptography network, why it has a two-token system implemented, and how it improves on the concepts of other financial cryptocurrencies such as Bitcoin and Ethereum.
Currency name(s): VeChain Token (VET), VeThor Token (VTHO)
Genesis Block: June 2015 for VeChain Token; February 2018 for VeThor Token after the network was rebranded
Total Supply: ~87 billion VeChain tokens, currently ~55.5 billion are in circulating supply; potential infinite supply of VeThor token
Algorithm: Based on Ethereum’s codebase, uses sha256 for identification, RS Erasure code in the storage system, asymmetric key algorithm
Features: trust-free, transparent information flow, efficient collaboration, high-speed value transfer, counterfeit protection
Website: https://www.vechain.org/; https://www.vechain.com/
Our VeChain network market analysis has shown that this particular cryptography network has come a long way from its conception and has already found its way through to being implemented in various industries such as logistics, agriculture, and basically any industry that relies on real-time tracking through supply chains. Since its launch, the VeChain network was set out to achieve a formidable goal – to become the blockchain technology used for enterprise solutions, which is able to tackle fraudulent behavior, increase the trust in the authenticity of products and track its way from production to the end-user. Of course, there are many more applications for the VeChain network: it can also serve as a platform where enterprises can collaborate and can integrate other technology solutions such as big data analytics and management, Internet of Things (now especially useful as the world is being ushered into the 5G network speeds and performances), or the still infant Artificial Intelligence. The VeChain network uses a two-token system so that the fees the users pay to transfer value via the network are not inflationary as is the case with well-established networks such as Bitcoin and Ethereum. Namely, the fees when Bitcoin and Ethereum are used for completing transactions are paid in the network’s native cryptocurrency, and the more it is used, the higher the fees become – at its peak price in 2018, Ethereum fees averaged at $1 per transaction, compared to its current price of around $0.1. In order to tackle the inflationary transaction fees, in 2018 the VeChain network went through a rebranding and launched a new cryptocurrency token called VeThor, which is used to make payments for the transaction fees. By making this clear distinction between the token used to contribute to the network, VET, and the token used to make payments, VTHO, the VeChain network keeps the fees stable with little to no inflation, regardless of how much the network itself is used.
As the VeChain network is set out to bring blockchain solutions to enterprise-level ecosystems and improve the supply chain management, the technology behind it is very interesting to observe its development and application. It is especially interesting to witness how VeChain fights counterfeited products by using blockchain and in-house built smart chips which are inserted into the products. By simply scanning the chip (it can be either an NFC chip, RFID chip or a QR code), a user will accurately know that the product before them is indeed genuine.
The underlying technologies that allow for all of this to be possible are: the ability to support DApps (decentralized applications), having a two-token system where one is used for owning a stake of the network – the VeChain Token, and the other for making transactions – the VeThor token, and finally, having a proof-of-authority consensus model. The team believes that having fully functional DApps run on the network will bring enterprises to implement blockchain within their logistics systems.
As VeThor is rewarded for maintaining the network, as well as for holding VeChain tokens, the ecosystem balances itself through this two-token approach. This way, the users are rewarded for contributing to the overall network’s functionality.
Regarding the proof-of-authority consensus model, it relies on 101 publicly known validators which produce blocks, as well as other nodes which maintain the blockchain. There are four types of nodes, depending on how many VET they’re holding, starting from 1 million VET all the way to 25 million VET as a minimum requirement. These validators also have a say in the governance of the network, where they discuss in which way the network will develop further.
While conducting our VeChain network market analysis, we have seen that the price for one VeChain token is experiencing both minor increases and decreases in price. Namely, the price per token currently sits at around $0.007, and the market cap is around $415 million. The highest ever recorded price per VeChain token was $0.019 in September 2018, while the lowest ever was $0.003 in December the same year. Owning and trading VeChain tokens is made possible on Binance, HitBTC, Bitfinex and many others. Both cryptocurrencies, as well as fiat currencies, can be used for purchasing this type of token.
Curiously, VeThor token is also listed on several exchanges, but the price is very low as it is used to complete payments and transactions. The current price for one VeThor token is around $0.001, but as it is consumed during transactions, so the reason behind buying the VeThor token is to complete the first couple of transactions when users get onto the network. Afterward, the VeChain token generates VeThor tokens automatically. VeThor can be bought and sold on BigONE, gate.io and LBank for either Bitcoin or Ethereum.
VeChain is set out to bring blockchain technology to enterprises by implementing it in various aspects of business such as logistics, supply chain management, and quality control, among others. Although it developed from Ethereum code, and later migrated to its own mainnet, VeChain is paving its way toward success, having created a partnership agreement with PwC, a multinational services network.
Although the whole cryptocurrency community has gone through a rough patch and has had massive fluctuations at the beginning of the year, now it is steadily on the rise, and as Bitcoin is gaining traction, so do other cryptocurrencies. And as VeChain already has a proven track record of application for enterprises, its value is expected to rise, so the best holding position for this token is medium to long.
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