Creating a Blockchain: Vechain
Creating a Blockchain: Vechain

By M87 | Blockchain_Space | 15 Mar 2020


Vechain Thor (VET) came into the crypto space as being one of the projects to take on the Internet-of-Things (IoT) and supply-chain industry to become a Blockchain-as-a-Service (BaaS) company with their goal to build “a trust-free and distributed business ecosystem to enable transparent information flow, efficient collaboration, and high-speed value transferring.” Currently, the #33 ranked coin by market cap at the time of this writing, has managed to stay in the top 50 despite the recent market crash.

The Origin of VeChain

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Sunny Lu - Founder of VeChain

VeChain was founded by Sunny Lu, former Chief Information Officer (CIO) of Louis Vuitton China and began its development in 2015 and launched the VEN token on Ethereum when it had its Initial Coin Offering (ICO) in 2017. The mainnet went live in June 2018 and continued its journey in the blockchain industry.

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There are some that believe VeChain translates to "OneChain" in Chinese, however, there are other explanations that originate from Norse Mythology where Ve or Vé to be more precise, is the brother of Odin, who is the father of Thor. Vé was known as the god of creation and when relating it to VeChain, the Mythology reference seems to hold more ground on the meaning of name VeChain since it rebranded to be called VeChain Thor (VET)

Part of VeChain's efforts to expand blockchain to enterprise use, they created a proprietary smart chip for Near-Field-Communication (NFC) chips, Radio Frequency Identification (RFID) trackers, and QR codes.

How is it Different?

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VeChain is essentially a fork of the Ethereum blockchain but focused on IoT and supply chain. Like other projects, VeChain is a dual-token system where VET is used to transfer value and VeChainThor Energy (VTHO) is used for gas to power transactions.

VeChain is a public blockchain that is intended for "mass public adoption" and differs from chains like Ethereum and NEO even though they have their similarities. Ethereum has an issue with its native gas token being volatile leading to many failed transactions because of miscalculations. Vechain solves that by allowing Proof-of-Work (PoW) on every transaction so if people that are doing transactions can mine more VTHO if their calculation for the gas was wrong.

The governance model that Vechain uses is also different compared to its similar counterparts. It uses Proof-of-Authority (PoA) consensus algorithm where voting power is based on holdings and disclosure that requires Know-Your-Customer (KYC) to take advantage and have more influence on the network. For example, VET holders that have 1 million tokens in their wallet and don't have KYC are assigned 20% of all votes compared to holders with the same amount of tokens with KYC have 30%

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There are a total of 101 masternodes that help reach consensus on the Vechain network and are required to be authorized by the VeChain Foundation and VeChain community. Anonymous nodes are not allowed as VeChain works to follow regulations but there is another type of masternode called economic nodes that is used as a check on power by having a certain number of votes allocated to it based on the amount of VET is being held with the masternode. 

While the system of masternodes does centralize voting rights in a decentralized system, VeChain is working to design its blockchain to have a balance between centralization and decentralization.

With the goal of building an ecosystem for enterprises, VeChain has built the necessary tools for businesses to easily implement blockchain technology and use it to help solve the problems in their industries.

Use Cases:

  • Provenance for food and beverage

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  • Anti-counterfeiting and digitization for high-value products

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  • Digital vehicle passport

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Read the Whitepaper for full details.

Growth

VeChain was seeing growth over the years since it began but that was stunted when the recent hack happened.

In December 2019, The VeChain Foundation was hacked and an estimated 1.1 billion VET worth $6.5 million at the time was stolen from their buyback wallet. The result of the hack was concluded to be a human error by a member of their finance team and VeChain has since corrected their protocols. Eventually, the hack led to their first-ever all stakeholders voting to occur and resulted in a token burn of 727 million VET that was stolen.

After the setback from the hack, VeChain continued its growth with continued partnerships with businesses. Just last month in February 2020, fashion brand Sarah Regensburger has partnered with VeChain and will be using its blockchain to combat counterfeiting and track all its products.

Also last month, a game was launched on VeChain called VIMWorld that is an Non-Fungible Token (NFT) ecosystem. The 8 Hours Foundation is the one behind the project and is looking to bring people together for at least 8 hours a week but in a more fun way. 

It was clear to us that what was needed wasn’t just a new game — there are plenty of those — what was needed was an entirely new system that incentivizes and rewards its participants. An ecosystem that brings everyone together, giving value to both physical toys, objects, and their digital counterparts.

 

-8Hours Blog

The ecosystem will support multiple services and games that will use the 8Hours Token (EHrTs).

VeChain had its latest upgrade in February 2020 as well. The Entropy 1.3.0 upgrade brought improved performance and efficiency to the network.

  • Drastically reduces disk space occupation by 80% (with state pruner enabled)
  • At least 2X as fast to access cold VM state
  • Much more effective trie cache, reduces 50% RAM usage
  • Greatly speeds up querying event/transfer logs
  • Reduces logdb size by 40%

 

 

-Vechain Thor Github

Soon after the upgrade, VeChain published a paper for its revised consensus algorithm to Proof-of-Authority 2.0. While the original PoA is said to be superior to other consensus algorithms used such as Proof-of-Work (PoW), Proof-of-Stake(PoS), Delegated Proof-of-Stake(DPoS),  and Byzantine Fault Tolerance (BFT), the new PoA 2.0 SURFACE will combine the Nakamoto consensus and BFT to help improve the VET blockchain.

PoA 2.0-SURFACE is a blockchain consensus algorithm that enjoys the benefits from both the Nakamoto Consensus and Byzantine Fault Tolerance (BFT) consensus. The former allows the system to achieve a near-optimal throughput and latency performance most of the time, while the latter guarantees uncompromised ledger consistency (security) even when the network is strictly asynchronous.

 

 

-Vechain Foundation

Despite all the recent growth and gains in the market, the recent global market crash brought VET down to new all-time lows. Can VeChain survive in the IoT and supply chain industries in the midst of the Coronavirus? Particularly those are the industries that are getting hit the most with the supply chain of electronics and other products are having to shut down operations causing longs delays or complete cancellations of items in the current manufacturing process. We will have to see how the situation turns out for the global economy and VeChain once we are able to move past this current pandemic. 

This is not investment advice. Do your own research.


M87
M87

Working towards digital sustainability.


Blockchain_Space
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