VeChain Cryptocurrency

Published on :

21 Aug, 2024

Blog Author :

Edited by :

Reviewed by :

VeChain cryptocurrency (VET) is a digital currency and blockchain platform that aims to support supply chain management and enhance transparency in businesses through decentralized ledger technology. It emerged in 2015 and operates on secure and immutable record-keeping by employing blockchain technology to monitor the movement of goods, allowing users to trace their origins and verify their authenticity.

VeChain's native cryptocurrency, VET, plays a crucial role in this system. VET holders can generate tokens to power smart contracts and execute transactions on the network. The platform is valuable for its practical applications, especially in logistics, agriculture, and luxury goods.

What Is VeChain (VET) cryptocurrency?

VeChain cryptocurrency is a leading digital currency and blockchain platform founded in 2015 that uses a decentralized, distributed ledger technology that securely records and verifies transactions.
It helps in supply chain management and offers clarity in various industries. It assists companies in enhancing their products' traceability and authenticity.
This currency focuses on supply chain management and transparency. It offers an efficient and immutable method to monitor and authenticate products. This helps in reducing fraud and promotes accountability.
The currency has gained substantial attention and attracted various organizations and industries, including logistics, luxury goods, and food, for its benefits in practical applications.

VeChain (VET) Cryptocurrency Explained

VeChain cryptocurrency is a prominent cryptocurrency and blockchain platform founded in 2015 to transform supply chain management and enhance transparency across various industries. It is a decentralized, distributed ledger technology that securely records and verifies transactions. It aids businesses in improving the traceability and authenticity of their products.

This currency has a dual-token system consisting of VET and VTHO(VeThor) tokens. VET is the platform's native cryptocurrency. VET holders can generate VTHO or VeThor tokens through the staking process. VTHO tokens power smart contracts and execute transactions on the VeChainThor blockchain. This dual-token model ensures that the network remains efficient, scalable, and economically sustainable.

This currency's primary focus is on supply chain management. It has practical applications in various industries, including logistics, agriculture, and luxury goods. This blockchain and cryptocurrency system offers a helpful and efficient solution for businesses seeking to improve their supply chain processes, enhance product authenticity, and meet regulatory requirements. Its assistance in traceability and transparency makes it a valuable tool for industries as it helps their operations and builds trust with their consumers.

How To Mine?

VeChain cryptocurrency does not rely on traditional mining. Instead, it operates on a proof-of-authority (PoA) consensus mechanism. It means that the network validators, known as Authority Masternodes, confirm transactions and add new blocks to the blockchain. This PoA system is designed to be more efficient and scalable for the cryptocurrency's specific application focused on supply chain management and enterprise solutions.

As a result, individual users cannot mine these tokens through traditional mining hardware. However, users may obtain the tokens through exchanges. They may acquire these tokens by purchasing them on cryptocurrency exchanges. They can create an account on a reputable exchange, deposit funds, and then trade those funds for these tokens.

How To Trade?

VeChain cryptocurrency trading can be done through the following steps:

Users may start by selecting a reputable cryptocurrency exchange that supports VeChain trading pairs. They must ensure the exchange they choose complies with the local regulations and provides a secure trading environment.
They must sign up for an account on the chosen exchange. The users must provide personal information, complete identity verification, and set up security measures like two-factor authentication.
Then, users may deposit funds into their exchange account. Depending on the exchange, they can deposit fiat currency or other cryptocurrencies. Depending on the exchange's policies, they might need to go through a verification process before depositing funds.
After the funds are deposited, they navigate to the trading section of the exchange and select the VET trading pair they want to trade. They must also specify the type of order they wish to place.
Next, the user must enter the amount of VET they want to buy or sell and review the details. They must confirm the trade, and the exchange will execute it according to their instructions.
Finally, if the users want to move their currency to a more secure wallet, they can withdraw the tokens from the exchange to their wallet. This step is beneficial for long-term storage and security.

Examples

Let us study the following examples to understand this cryptocurrency:

Example #1

Suppose Jenny bought a premium cosmetic product. The product had a QR code on its label. When she scanned it with her smartphone, VeChain's blockchain technology displayed the product's history. It showed the ingredients used for making the product and the entire development journey, from its manufacturing process to how it was transported to the store. Jenny could trust its authenticity since all the information was recorded on the blockchain. No one can tamper with or forge the details.

VeChain cryptocurrency is the driving force behind this process. It keeps the system running smoothly and rewards those who help maintain it. The currency ensures transparency and trust in products, making it a valuable instrument for businesses and consumers.

Example #2

On September 19, 2023, traders and investors observed that VeChain cryptocurrency displayed a promising price movement. With a 13.32% rise in the past week and a 7.41% increase over the past 30 days, it has recently experienced gains. It witnessed a week-over-week increase of 13.32% and a 30-day increase of 7.41%.

These figures suggest a bright future for the currency. Several variables, including market sentiment, project legitimacy, and possible applications, influence the trajectory of every digital asset. Prominent analysts are hopeful about VeChain's adaptability and growth potential. The token has a solid base owing to its inherent value and practical applications.

Pros And Cons

Some VeChain cryptocurrency pros are:

The coin's primary focus is on supply chain management and transparency. It provides an efficient and immutable way to track and verify products throughout their lifecycle, which can reduce fraud and improve accountability.
It has established partnerships with various companies and industries, including luxury goods, food, logistics, and more. This highlights its practical applications.
This cryptocurrency uses a dual-token system with VET and VTHO tokens. VET is used for staking and governance, while VTHO powers transactions and smart contracts. This system ensures network stability and incentivizes the cryptocurrency holders.
VeChain cryptocurrency has a strong focus on enterprise solutions. This makes it attractive to businesses seeking to improve supply chain efficiency and transparency.

The VeChain cryptocurrency cons are as follows:

Its consensus mechanism, proof of authority (PoA), relies on a limited number of Authority Masternodes. This raises concerns about the potential control over the network. It may sacrifice decentralization for efficiency and control.
Cryptocurrency regulations vary by region, and this cryptocurrency is susceptible to changing regulatory environments. This can affect its adoption and applications.
VeChain cryptocurrency faces competition from other blockchain platforms and supply chain solutions. Staying ahead in a competitive market is a challenge for this currency.
This cryptocurrency's price can be highly volatile. It may be a disadvantage for investors and businesses looking for stability in their financial operations.

VeChain vs VeThor

The differences between the two are as follows:

#1 - VeChain

It can be used as a store of value. VeChain cryptocurrency holders can participate in the network's consensus mechanism by staking their tokens.
The VeChain cryptocurrency holders have voting rights and can participate in governance decisions related to the ecosystem. This gives them a say in protocol upgrades and changes.
This crypto is used to pay for transaction fees on the network. This provides an economic incentive for users to hold and use this cryptocurrency.
VeChain cryptocurrency plays a crucial role in the dual-token economic model of VeChain. It helps maintain network stability and incentivizes the network participants.

#2 - VeThor

VeThor (VTHO) is used to power transactions on the VeChainThor blockchain. Users who send VET or interact with smart contracts pay transaction fees in VTHO.
Moreover, it executes and operates smart contracts on the network. Every action on the VeChainThor blockchain requires a certain amount of VTHO.
It is generated by holding and staking VeChain cryptocurrency tokens.
VTHO's generation rate and consumption are designed to strike an economic balance within the VeChain ecosystem. It ensures that the transaction fees are predictable and affordable.

Frequently Asked Questions (FAQs)

1. Is VeChain's blockchain secure?

VeChain cryptocurrency's blockchain employs robust security measures, including cryptographic techniques and its proof-of-authority (PoA) consensus mechanism, involving trusted Authority Masternodes. This PoA system enhances security by reducing the risk of malicious users gaining network control. Its focus on supply chain management also necessitates a secure and tamper-proof ledger. Thus, for this cryptocurrency, data integrity is a priority. Its design and continuous efforts to improve security make it a secure platform.

2. Is VeChain open-source?

Yes, it is an open-source blockchain platform. Its source code is publicly available for review, modification, and development by the blockchain community. This open-source approach fosters transparency, collaboration, and innovation within the cryptocurrency ecosystem. Developers and enthusiasts can access the code and propose improvements to the VeChain cryptocurrency blockchain.

3. Is VeChain subject to regulatory oversight?

VeChain cryptocurrency operates in a regulatory environment that varies by jurisdiction. It is subject to the evolving regulatory scenario in each region where it is used or traded. Compliance with the local laws and regulations is essential for this cryptocurrency and its users. VeChain currency projects often work closely with legal and regulatory authorities to navigate these complexities and ensure compliance.