Bitcoin is still the most well known cryptocurrency but we’ve come a long way since then, now cryptocurrencies are being used to solve problems across hundreds of different sectors. VeChain Thor is building a blockchain-as-a-service ecosystem for businesses.
There’s lots of new examples of blockchain technology out there that claim to about to change the way that we do business but few have created anything resembling a finished product.
Unlike many of its counterparts VeChain Thor has already been providing customers with a functioning service for two years now. Unlike Bitcoin or Litecoin VeChain is designed to act as a platform or service rather than a replacement or supplement to fiat currency.
What Does VeChain Thor Do?
The aim of VeChain Thor is to create “a trust-free and distributed business ecosystem to enable transparent information flow, efficient collaboration, and high speed value transferring.” The project has already been around for a couple of years and has been providing governments and customers with a viable blockchain service. VeChain has seen success in a variety of industries including luxury goods, agriculture, logistics, pharmaceuticals and governments. The technology is designed to track items through a supply chain and ensure the authenticity and quality of goods, it can even be used to improve the quality control of food products.
The reason VeChain is so interesting is because it combines a start of the art smart chip with existing trackers like RFID, QR codes or RFC chips. This smart chip is then combined with blockchain technology to allow businesses to easily track exactly where their goods are in any given moment. This might not sound that interesting but the real world applications are pretty incredible.
The most obvious use of VeChain is in tackling the ever troublesome problem of counterfeit goods. This is a half a trillion dollar problem and despite many attempts to combat the problem it has proven incredibly difficult to deal with. VeChain offers a solution to the problem by giving consumers, and customs officials, an at a glance way to identify the origin of any product. By scanning a QR code or RFID chip businesses will be able to confirm that they are stocking genuine goods and it will be easier for customs officials to seize counterfeit goods that do not have an ID on the system.
Similarly VeChain has use cases across multiple industries and has proven the concept in everything from the liquor industry, to logistics and even agriculture. One big problem in agriculture is that it is difficult for businesses to decide what, if any, pesticides to use. VeChain uses IoT sensors and mobile devices to monitor soil and climate conditions that it then records to the blockchain. This data is encrypted and immutable at the same time but can be easily accessed by relevant parties with the right authorization and climate keys. This can be used to companies to improve their planting methods and reduce the amount of fertilizer and pesticides required to grow enough crops. It could also be used to give consumers a way to confirm whether crops are organic through virtual labeling.
What Is The VeChain Foundation?
The VeChain foundation is a non-profit entity that was established in Singapore in July 2017. The foundation was designed to act as VeChain’s sponsor entity and guide the development, construction and governance of the blockchain. While the VeChain foundation is designed to to act as a sort of council it is not supposed to rule the blockchain and at its heart the VeChain community will continue to be decentralized.
Unlike DASH, where proposals are brought forward by the community, the foundation will be able to put important proposals to the community. This includes decisions like changing the consensus method or any major changes to VeChain’s underlying code. Masternodes will then be able to vote on these proposals and thus have a say in the future of the blockchain.
The foundation was implemented to give VeChain some semblance of traditional corporate governance and provide the community with some direction and stability. This is to overcome the problems posed by hard forks. The foundation will also include “appropriate members” of the VeChain community and aim to ensure that at its heart VeChain thor is still decentralized.
Why Did VeChain Rebrand to VeChain Thor?
VeChain’s technology is already very impressive and it has proven its utility in a variety of industries. Despite this success the VeChain team is looking to make VeChain even more useful. In February VeChain rebranded itself to VeChain Thor. This will see the company build Enterprise DApp (decentralized app) solutions similar to Ethereum or NEO. This platform will use two tokens, VeChaine Tokens (VET) and Thor power (THOR).
VET will be used as the smart payment currency that can run business activities on the blockchain. Businesses who hold more VET will be given higher priority and have more rights on the new VeChain Thor blockchain. VET represents the right and privilege to use the public Blockchain resources. VET is also used to carry out economic and business activities using VeChain Thor. THOR is acquired by holding VET and works in a similar manner to NEO’s GAS token.
THOR is designed to operate as fuel for the network and is burned to create smart contracts and run operations on the network. Currently users receive THOR at a rate of 0.00042 THOR per VET per day but this could be changed in the future depending upon network usage. You can calculate how much THOR you can earn here.
How do VeChain Thor Nodes Work?
Like DASH and PIVX VeChain takes advantage of nodes to provide enhanced functionality and utility to the network.
There are two main categories of Masternodes, Authority Masternodes and Economic Masternodes. Authority masternodes are the most privileged nodes on the the system and are the only nodes capable of creating blocks and ledger records. Economic Masternodes are designed to offer stability to the ecosystem and act as a way to distribute power and privilege within the blockchain ecosystem, they have the ability to vote and influence governance systems but can’t process blocks.
Both types of nodes are eligible to receive one vote within the governance system. Each node that holds at least 10,000 VET with a single public key will be considered to have a single vote and no one stakeholder can have more than one vote. The VeChain foundation’s governance system requires a vote to elect board members and change the blockchain’s consensus method. The board will still set the agenda. There are currently four kinds of nodes with different stakes and maturity dates.
- Strength Nodes – 10 day maturity period (minimum 10,000 VET)
- Thunder Nodes – 20 day maturity period (minimum 50,000 VET)
- Mjolnir Masternodes – 30 day maturity period (minimum 150,000 VET)
- Thrudheim Masternodes – 12/21/17 maturity start date (minimum 250,000 VET)
Strength, Thunder and Mjolnir are all economic nodes, Thrudeim nodes are considered authority nodes. The maturity period is the number of days that a node needs to have its minimum amount staked before it can be considered “active”. Once a node is active then its owner will be able to vote and will receive VET for their role in ensuring the integrity of the VeChain ecosystem. All nodes receive rewards from the VeChain foundation THOR pool in addition to the standard reward for holding VET. Authority nodes receive this reward plus 30% of all THOR consumed by blockchain transactions.
Is VEN a Good Investment?
VeChain Thor already represents one of the most mature blockchain ecosystems in existence today and that alone marks it out as an interesting investment option in a market traditionally dominated by prototypes and concept pieces rather than completed products. On top of this VeChain Thor has already proven its utility in a variety of disparate markets.
In terms of past performance VEN remained largely stable until a spike in Jan 2017 where it reached highs of $9. Over the last few months the value of VEN has slowly slid down before stabilizing at around $4. Given the utility behind VeChain’s product this is probably undervalued and that it is likely that the value of both VEN and THOR will increase as VeChain Thor sees more widespread adoption.
A key driver for VeChain thor is the acquisitions of new partnerships. In late February 2018 VeChain announced a partnership with a variety of companies including the likes of BMW as well as a collaboration with Oxford University. These kind of high profile partnerships are important for VeChain as it helps to legitimize the cryptocurrency and increase the likelihood of future partnerships. In February it was also that Korean exchange Coinnest will be adding VeChain to its platform with the option for a direct fiat to VEN exchange.
As with NEO and other proof of stake cryptocurrencies THOR offers another major advantage for long term investors. By staking VEN either in a masternode or simply in a wallet investors are able to passively acquire THOR. This is somewhat similar to the way that certain stocks give their investors dividends as a reward for not selling.
VeChain Thor represents a unique offering for cryptocurrency investors and traders. It already has a promising completed product that has real-world applications and uses proof-of-stake. Unlike many cryptocurrencies the aim of VeChain isn’t to replace real world currency but rather to solve real world problems. In many ways this makes VeChain a safer long term investment than more traditional cryptocurrencies as the technology behind VEN has real value in the form of contracts and partnerships.