Maybe you have heard about Vechain (VET) and wondering what Vechain Thor is? You might also have heard about Vethor (VTHO) and wondered how it’s different than Vechain (VET).
Vechain (VET) is a token that runs on the Vechain Thor blockchain. Vethor (VTHO) is another token that runs on the same blockchain. Vechain Thor is a dual token blockchain.
Keep reading and I’ll do my best to simplify everything. I’ll explain what this crypto project does, why it’s needed and some challenges it faces.
What is Vechain Thor?
Vechain Thor is the name of the blockchain.
What makes Vechain Thor different than other cryptos is it’s focused on physical products and tracking them. These physical products can be anything such as barbie dolls to medicine and even hair wigs.
How it would work is the physical products would have a code (like QR code). These codes will allow them to be tracked through the entire process of being sent to a physical location.
All these physical products are organized, tracked, and it’s more secure because it’s on a blockchain!
It was initially launched in 2015 on the Ethereum blockchain. In 2018 the team behind the project wanted their own blockchain and they created Vechain Thor.
There are 2 tokens to this blockchain the Vechain token (VET) and the Vechain Thor energy token (VTHO).
The VET token is used for transactions between 2 businesses on the platform. The VET token is also used to run an authority node.
Basically, someone needs VET to create VTHO tokens. Also, the VET token has a fixed supply of 86.7 billion.
The VTHO tokens have lesser value and are used to pay for transactions and start smart contracts. 70% of VTHO used in each transaction is destroyed, the 30% remaining is used to pay the authority nodes to enable the transactions on the blockchain.
In case you’re thinking about running an authority node, it’s VERY expensive. You need 25 million VET to run this node. At the time of this blog post, it would cost 2.9 million dollars. Also, that 25 million VET needs to be locked up to run the node.
If you count all the nodes that have locked up VET it would be 2.5 billion that is (out of circulation) and this reduces the supply.
Oh, and there are more nodes that lock up VET and this reduces the supply EVEN more. That 86.7 billion supply cap doesn’t seem so large.
If I haven’t confused you enough already there are MORE nodes.
You might be wondering why someone would want to run an economic node? The benefit is that it also generates a smaller amount of VTHO and you can vote on things.
Plus, not everyone has a few million dollars of cash – maybe this is why they created these smaller nodes.
Why Vechain is Needed?
Supply chains for products can involve many countries. Just take the iPhone that is designed in California. Then Apple purchases parts from 43 countries on 6 continents. Then sends the parts to factories to create the phone and then ships the phone around the world to be sold.
You can click on this link HERE to learn more about this crazy supply chain.
Next, you have counterfeit goods which are a huge problem. In 2020 Amazon.com destroyed over 2 million counterfeit items, you can read more HERE.
I have to mention there are LOTS of fake reviews on the site and you can even buy reviews.
There is an issue with trust in many supply chains.
One example is Legos. Yea, there are LOTS of counterfeit lego sets and sometimes these toys are worth a lot of money. How does a retail toy store (they are rare) know that the genuine product they ordered is the real one?
Vechain can be the answer. What Vechain can do is can track the item from the genuine factory all the way to the retail store. Everyone can see it on the blockchain.
Every product would have a scannable code such as QR code. This code would get scanned at each stage of transportation and be entered into the blockchain. Cool right?
You could do this when ordering wine. Pull out your phone at a restaurant and verify the wine came from the right vineyard.
Pros and Cons to the Vechain Project
Vechain has a very unique idea, but ideas are worthless.
How does it handle the real world? You might be wondering how many companies are using the technology?
There are at least 39 and HERE is a list of them. One of the most interesting companies that use Vechain is Mycare. Mycare is used to help with Covid 19 and Viking Line cruise ships use them.
Oh, and Walmart (the China division) uses them and the same with BMW. The problem is nobody knows how much these companies are using the technology and “how helpful it is.”
Let’s talk about some of the negatives of this project. One of the negatives is someone can easily copy the idea and do the same thing for less money.
Also, some companies may want to develop their own blockchain and keep all their data on it.
The third negative is the project seemed to lose focus. Instead of focusing on being the BEST at being a supply chain blockchain, they started to develop dapps, ICO’s and even NFT’s.
The fourth negative I see is their whole token system is not simple. It took “some time” to somewhat wrap my head around it.
If something is too complicated most people just pass on it.
The fifth negative is they are a Chinese blockchain project. The challenge with being a company from China is there is some controversy that the Chinese party OWNS the companies in China.
You can read more about this from this link HERE.
Crypto is more about decentralization and China is about central control of everything, it does seem like a conflict of interest.
Oh, and who can forget about China cracking down on Bitcoin!
It’s hard to ignore Vechain and It has some really good ideas.
Like many crypto projects, I’m very bullish on this project in the long run. It’s something I’m going to keep my eye on more.
I hope this blog post on is Vechain and Vechain Thor the same thing was helpful. Bye for now.