What is VeChain?
VeChain was created in 2015 by Sunny Lu, and at first was a secondary company of Bitse, one of the most important blockchain firms in China. The platform is built on top of the VeChainThor public blockchain and was created to deliver solutions for businesses all over the world.
According to many analysts, VeChain is a grown company. Many business applications already exist on its blockchain. The VeChain Whitepaper 2.0 states, “these solutions are not just theoretical, they are solutions tested and discussed with over 700 enterprises and implemented for over 100+ fortune level enterprises.”
The VeChain ecosystem aims to smooth operations and the flux of information for intricate chains via distributed ledger technology.
The platform offers two types of tokens:
- VET is traded like any other coin in financial transactions.
- VTHO that are used as “gas” to enable smart contract transactions (very similar to Ethereum’s gas).
How does VeChain work?
VeChain is a business-use blockchain network. Through the use of VeChain’s Blockchain-as-a-Service (BaaS) feature called ToolChain, a business can create its blockchain-based solutions.
The platform users can make transactions without needing to possess tokens, and each transaction is able to perform several functions.
The blockchain operates on a proof-of-authority protocol. Basically, it gives authority to specific nodes in the network to validate transactions. For one transaction to be registered, Authority Masternodes that hold at least 25,000,000 VET need to confirm it. There are currently 101 nodes that are responsible for reaching a consensus on the VeChainThor blockchain.
Unknown nodes are not permitted to become master ones. Any user that wants to become a master node is obligated to declare his identity.
There are also economic master nodes in the network. They are not meant to create blocks or records. Instead, they serve as a check on power. This is accomplished by assigning a precise quantity of votes to every economic master node established on the amount of VET they hold. An economic master node gets one vote for every 10,000 it holds.
Many people criticize VeChain as a non-fully decentralized ecosystem because master nodes centralize voting rights in a decentralized system. The founders of VeChain think this is the best way for the equilibrium between centralization and decentralization.