VeChain, VeChainThor, and Proof of Authority

An introduction to Proof-of-Authority system VeChain, which some consider to be the blue chip of supply chain management for the crypto space

In this article, we will look at VeChain (VET). VeChain was launched in 2015 by Sunny Lu to create an Internet of Things (IoT) application for managing supply chains. 

How VeChain works 

VeChain works by providing real-world products with a digital identity unique to that product. This digital identity can take the form of QR Codes or other scannable sensors. In addition, businesses wanting to take advantage of VeChain’s Blockchain-as-a-Service (Baas) protocol do so with VeChain’s ToolChain. 

2 years since we had this amazing partnership with Walmart🎉

The case postioned #VeChain at the forefront of blockchain, keeping an excellent example of blockchain applied in the retail industry.

18M of txs is a starting point. #VeChain3rdAnniversary https://t.co/gVjf5XIQjn

— VeChain Foundation (@vechainofficial) June 25, 2021

VeChain says that any business, no matter the size, can use blockchain technology through ToolChain. According to VeChain, ToolChain offers product lifecycle management, supply chain process control, data deposit and certification, and process certification.

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What is VeChainThor?

VeChainThor, launched June 30th, 2018, is a public blockchain that VeChain has designed to be used by businesses of all sizes to drive the adoption of blockchain technology. VeChain designed VeChainThor to be a blockchain ecosystem that is both sustainable and scalable.

Related: Beginner’s Guide to Blockchain

VeChain has two tokens: VeChain (VET) and VeThor (VTHO). VeChain designed the dual-token system to avoid the fluctuation of fees and congestion on the network. The VET token is for transactions, and VTHO is for fee payments and functions similar to Ethereum “gas.” Currently, the largest trading volume of VTHO/USD is on Binance.com, with a volume of just over 1 million USD.

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What is Proof of Authority?

Blockchains use various consensus mechanisms, such as Proof of Work (POW) and Proof of Stake (POS). VeChain uses a Proof of Authority (POA) consensus mechanism. According to the VeChain whitepaper, Proof of Authority is “a consensus algorithm that demands nodes to be authorized in order to participate in the blockchain consensus.”

Related: Proof of Work vs Proof of Stake

How Proof of Authority works

Proof of Authority, unlike Proof of Work that requires processing power and Proof of Stake that requires holding a certain amount of coins, Proof of Authority is about the identity and reputation of trustworthy nodes that make up the network. Both public can use proof of Authority, and private blockchains can use Proof of Authority consensus.

The current market for VeChain

The current market cap for VeChain (VET) is $5,331,235,214.25 according to data from CoinMarketCap.com. At the time this article was, the current trading price of VET is $0.08 (see CoinMarketCap.com for current market information).

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Where is VeChain trading?

VeChain (VET) is trading on numerous exchanges, including Binance, Binance.us, KuCoin, Huobi Global, Bittrex, Bitfinex, Crypto.com, and more. Wallets that support VeChain (VET) include Ledger, Trezor, Math Wallet, Trust Wallet, Exodus, and Safepal.

Related: Storing Bitcoin and Crypto