What is VeChain Thor? | Beginner’s Guide
What is VeChain Thor?
VeChain (soon to be VeChain Thor) is a Blockchain-as-a-Service company with a mission to build “a trust-free and distributed business ecosystem to enable transparent information flow, efficient collaboration, and high speed value transferring.”
The project has been around for over two years and already has customers using a working product – a rarity these days. Several industries including luxury goods, agriculture, logistics, food/drug, and governments are already using VeChain blockchain technology.
VeChain does a lot. Using the technology, you can track items through a supply chain, ensure the authenticity and quality of goods, as well as maintain the quality control of food products.
In this overview, we’re going to take a high-level approach covering:
- How does VeChain work?
- VeChain Thor
- VeChain team & progress
- Where to buy VEN (VET)
- Where to store VEN (VET)
- Additional VeChain resources
How does VeChain work?
VeChain began primarily as a supply chain company but has recently announced plans to evolve into a DApp platform as well (more on this later).
Supply Chain Trust
VeChain uses a mix of blockchain technology and their in-house built smart chip to track items throughout their lifecycle. The smart chip can be implemented in different IoT items such as NFC chips, RFID trackers, or QR codes.
Although this may not seem like the most interesting technology, it serves an important role in ensuring product quality across industries. Let’s look at the luxury goods sector as just one example.
The luxury goods industry is wrought with counterfeit items – over $450 billion worth. With an item like a Louis Vuitton purse changing hands several times during production and distribution, you need to trust that the person before you is passing along something authentic.
VeChain, like other blockchain companies, removes the need for this trust. At every step of the process, you can scan the smart chip on each item to guarantee you’re receiving what you should be. Because the blockchain is an immutable ledger, you can trust that you’re receiving accurate information.
Although still missing, it’s not crazy to assume that this technology will be in the hands of consumers shortly. Soon, you’ll be able to check the authenticity of those sketchy flea market stand sunglasses with a quick scan from your phone.
Supply Chain Logistics
Beyond counterfeit protection, VeChain also improves logistics systems through simplified product tracking. Logistics is complex and often includes several separate systems that vary across businesses. Because of this, tracking products in the supply chain can be a huge pain. This is especially true when data has to be entered manually or when switching between processes.
Using VeChain, you just scan the item’s smart chip to get all of its associated data. This provides businesses with information that’s always current and an accurate account of each item.
Integrating with IoT devices, VeChain also helps with quality control. This is especially useful in the food and agriculture industry where something like a temperature change of a few degrees could ruin an entire product batch.
At the end of 2017, VeChain announced plans for a rebrand to VeChain Thor scheduled for February 26th, 2018. VeChain Thor is going to move the company beyond the supply chain into Enterprise DApp solutions similar to Ethereum. The new platform will use two different tokens:
- VeChain Tokens (VET)
- Thor Power (THOR)
VeChain Tokens (VET)
VET will be used by companies as the smart payment currency to run business activities on the blockchain. Businesses who hold more VET will be given higher priority and more rights on the new VeChain Thor blockchain.
Thor Power (THOR)
VET holders will be given THOR that they can use to perform smart contracts and run applications on the blockchain. This is similar to the way NEO produces GAS for its holders.
The base generation rate of THOR for VET holders is:
0.00042 THOR per VET per day
This is the minimum that the rate will be, and the VeChain Foundation will initiate votes to re-adjust it based on network usage.
VeChain Thor relies on nodes to maintain the blockchain ecosystem. Nodes receive THOR as a reward for maintaining the network. There are four types of nodes that are differentiated by their maturity date and the amount of VET that they hold:
- 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)
The three types of economic nodes (Strength, Thunder, and Mjolnir) receive rewards from the VeChain Foundation THOR pool in addition to the normal reward for holding VET.
The 101 authority nodes (Thrudheim) receive the same rewards as economic nodes plus 30% of all THOR consumed by blockchain transactions. The remaining 70% of THOR will be burned.
Don’t be intimidated by the amount of VET needed to become a node. You still will receive the daily THOR reward no matter the amount you hold.
VeChain team & progress
VeChain started as a subsidiary of BitSe, one of China’s largest blockchain companies. The Singapore-based team is over 150 members strong and have a myriad of talent among their top management.
Sunny Lu leads the team as CEO. For the majority of Lu’s career, he’s led IT and Information System projects for several luxury brands. Most impressively, he was the Chief Information Officer (CIO) for Louis Vuitton China.
Other members of the management team include CFO Jie Zhang who has 17 years experience in IT assurance and Advisor Bo Shen, the founder of Fenbushi Capital.
The team has been busy forming partnerships left and right with the two most notable being PwC and DNV GL. VeChain is part of the PwC incubator program giving them access to the firm’s massive worldwide network of clients.
DNV GL is a $20B company that provides services to oil & gas, power, maritime, and renewable companies. The strategic partnership with DNV GL should open the door for VeChain to a massive amount of potential clients.
Perhaps most importantly, the Chinese government has chosen VeChain to be the blockchain technology partner of the government of Gui’an. With a government that’s notoriously tough on regulations, this is an impressive feat.
On the supply chain side, Waltonchain and Modum are utilizing blockchain technology in a similar way to VeChain. However, logistics is a large industry. Moreso, each of the three companies appears to be focusing on different niches which helps to prevent direct competition.
Interest in enterprise DApp platforms has recently surged with competitors like Ethereum, Cardano, EOS, and NEO all rising in price. Even though VeChain has yet to release Thor, their sheer number of partnerships should help to solidify them among these higher market cap projects.
VeChain began trading at the end of August 2017 at around $0.25 (~0.00005 BTC). Since then, the price has remained relatively flat with a short-lived bump in the beginning of October 2017.
Beginning in the middle of December 2017, the price has been climbing rapidly and recently hit an all-time high of $5.68 (~0.00038 BTC). The price increase has been driven by news of more partnerships as well as the announcement of the VeChain THOR rebrand.
It wouldn’t be surprising to see the price continue to rise as new partners begin using the enterprise DApp platform.
Where to buy VEN (VET)
The recommended place to purchase VEN (soon to be VET) is on Binance in exchange for Bitcoin or Ethereum. If you don’t currently have either, you can purchase them using USD on either GDAX or Gemini. From there, transfer your Bitcoin and/or Ethereum to Binance and make the trade.
You can also see a complete list of exchanges where VEN is available on CoinMarketCap.
Where to store VEN (VET)
Currently, the only way to store VEN is in a wallet with ERC20 support. MyEtherWallet is a popular online option with a high level of community trust.
For an extra layer of security, you should use a hardware wallet like the Ledger Nano S. This offline wallet works in conjunction with MyEtherWallet to store your funds.
Soon, VEN tokens will automatically become VET. The team hasn’t released much information on this yet, but you most likely won’t have to do anything to participate in the change. However, it’s possible that you’ll have to transfer your new VET to an official VeChain wallet to receive THOR rewards. The wallet is scheduled to be released in Q2 2018.
VeChain is one of the most established blockchain companies in the industry. Not only do they have clients using a functional product, they have a team with extensive experience in the industry they’re targeting.
Having partnerships with giants like PwC and the Chinese government, they should have no problem growing their clientele. Some people may question their shift into the enterprise DApp space, but it looks to be beneficial for customers who are looking for a more robust blockchain solution to their specific business needs.
If VeChain continues at their current pace, it wouldn’t be a surprise to see VET as one of the top performers of 2018.
Additional VeChain resources
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Based in Austin, TX, Steven is the Executive Editor at CoinCentral. He’s interviewed industry heavyweights such as Wanchain President Dustin Byington, TechCrunch Editor-in-Chief Josh Constine, IOST CEO Jimmy Zhong, Celsius Network CEO Alex Mashinsky, and ICON co-founder Min Kim among others. Outside of his role at CoinCentral, Steven is a co-founder and CEO of Coin Clear, a mobile app that automates cryptocurrency investments. You can follow him on Twitter @TheRealBucci to read his “clever insights on the crypto industry.” His words, not ours.