What is VeChain? The Beginner’s Guide

What is VeChain? It is an intriguing blockchain project with a focus on supply chain management. VeChain has its focus on the global business sector, which makes it a bit different type of platform project. This article is the VeChain beginner’s guide.

VeChain is not a typical platform

Let’s place VeChain to the right place in the cryptocurrency universe. This helps you to understand the big picture better. We like to divide cryptocurrencies into three categories: platforms, tokens, and currencies.

The best-known platform is Ethereum. You can also call platforms as ecosystems or frameworks. They are operating systems for Dapps and smart contracts. You can think of platforms like iOS or Android. Other known platforms include EOS, Tron, and Tezos.

VeChain is also a platform, but it’s not a direct competitor to any of the previously mentioned projects. VeChain has its focus on the business sector and supply chain management. The network of VeChain isn’t that decentralized either, but it makes sense in the business sector.

VeChain is an intriguing project because it doesn’t have a direct competitor in the market. It’s dominating a small niche, a bit like IOTA (internet-of-things) or Theta (streaming). All these projects have a unique position.

The token structure of VeChain is also different from popular platforms. VeChain is a dual-token platform, meaning there’re two tokens used: VeChain (VET) and VeThor (VTHO). Theta, NEO, and Ontology projects are other examples of dual-token platforms.

VeThor is a so-called gas token, which means it’s used to be pay transaction fees and smart contract usage. Ethereum and other platforms have also similar fees, but one token is used for all value transfers (fee, staking, etc.).

VeChain (VET) is a governance token, which is used in staking and value transfers in the VeChain ecosystem. You’ll also generate small amounts of VTHO into your wallet by holding VET.

VeChain = BitSe + PriceWaterhouseCoopers

The company behind VeChain is called BitSe (Bit Service Expert). This firm has headquarters in Singapore, but many of the key figures are Chinese. BitSe was actually one of the first BaaS (Blockchain-As-A-Service) companies in the world.

BitSe was founded already in 2013, which means VeChain has its roots much further back in history than just 2017 when the ICO was organized. The founders of BitSe are coming from global giants, such as IBM, Alibaba, and Louis Vuitton. The CEO is one of the founders, Sunny Lu.

BitSe has worked closely with PriceWaterhouseCoopers for several years. PwC is one of the largest companies in the world in the field of accounting, tax services, and business management. BitSe and PwC formed a strategic alliance in 2016.

In May of 2017, BitSe joined PwC’s business incubator program with a goal of strengthening the VeChain brand and further pushing blockchain development projects in Asia.

The VeChain brand was created in 2015. BitSe / VeChain has already built several real-world blockchain projects. VeChain Foundation was formed in 2017 and the VeChain ICO was held in the middle of the ICO boom of 2017 as well. The ICO was sold out in three minutes.

The VeChain token started its life as an Ethereum-based token. It was created in the ICO, just like almost every other platform in the past few years. The token was first using a short code VEN. VeChain launched its own blockchain in June 2018.


After the MainNet launch, a token swap was done. The VEN token was moved from the Ethereum blockchain to the VeChain MainNet. This is when the shortcode was changed from VEN to VET. It was due to the rebranding of the whole VeChain blockchain to VeChainThor.

VeChain token holders received VET tokens with a 100:1 ratio. There were originally just 870 million VEN tokens, but now there are 87 billion VET tokens in the VeChain blockchain. The current price of 0.02$ is equivalent to 2$ price of the old token. VEN reached almost 10$ price at the peak of the altcoin bubble.

The gas-token, VeThor, was also created at the time of the MainNet launch. It doesn’t have a fixed cap.

So far, the VET token hasn’t been a great investment after the MainNet launch. The old ATH price was reached in September 2018, which was followed by a long run downwards. VeChain started to climb again in the summer of 2020 and made a new ATH in July.

This recent run has made many VeChain investors happy, but the VET is still far behind in performance when compared to the hottest DeFi and staking coins.

VeChain is supply chain management with IoT

VeChain has always focused on providing blockchain solutions to enterprise-grade clients. In practice, they are working in the supply chain management niche. VeChain has developed its own RFID sensors, which can be planted into products in a way that they can’t be removed or tampered with.

One of the biggest uses cases of VeChain is piracy. This is a problem, especially in the luxury brand industry and clothing. One of the VeChain’s partners is Direct Imported Goods (DIG), which is the largest wine importer of China. DIG has installed VeChain’s supply chain tracking codes to millions of wine bottles.

In practice, VeChain is all about combining IoT solutions with blockchain infrastructure. See the video below, where Michael of Boxmining channel is demonstrating VeChain technology.

Supply chain management is in the heart of the VeChain brand. It is using RFID and NFC chips with QR codes to track products along the process. Each product is given a unique tracking code, which is then stored on the blockchain.

What VeChain tries to do is to connect the end-user and the very beginning of the supply chain. A potential buyer can check information on the product origins and make sure it’s 100% legit and receive additional information of it’s manufacturing.

There are almost endless uses cases in the business sector when it comes to such solutions. Not only with luxury brands but also in the food industry.

The VeChainThor blockchain and Proof of Authority

As mentioned earlier, VeChain did a re-branding in 2018. The official name of the ecosystem is The VeChainThor Platform. When people are talking about VeChain, they usually refer to the whole project. VeChainThor is the actual blockchain.

VeChainThor is a 3rd generation platform. This means it can scale up to thousands of transactions per second and it supports smart contracts and Dapps. Currently, the network is limited to lower TPS numbers, since there is no need for larger capacity yet. Block time is only about 7-8 seconds, which means sending VET or VTHO is fast.

VeChain’s focus on the business sector has also reflected the technical solutions. VeChainThor is using the Proof of Authority consensus algorithm, which is quite different from rival platforms. It is a Proof of Stake variant, which means there are no physical mining machines like Bitcoin has. However, there is no traditional PoS staking either.

Below is a picture from

vechain proof of authority

As you can see, the VeChainThor blockchain is controlled by 101 authority nodes, which can be sometimes called master nodes as well. They are basically entities hand-picked by VeChain. These authority nodes are in complete control of the block creation. They can also block transfers or network actors.

The main characteristics of a PoA network are a low requirement of computational power, no requirement of communication between nodes to reach consensus, and continuity of the network is independent of the number of the available genuine nodes since they are pre-approved and verifiably trustable through cross verification in the public domain. (

It is obvious that PoA is not a distributed solution like many of its competitors. Ethereum or Bitcoin could never run a PoA consensus. This model works for VeChain because the key users of blockchain are enterprises. For such businesses, it is important to know who is controlling the network.

VeChain nodes and tokens

As mentioned earlier, the VeChainThor blockchain is controlled by authority nodes. There are exactly 101 of these nodes in the network. There are also two other types of nodes: economic nodes and X-nodes. These nodes are not responsible for the blockchain management, but they are more like token holder status levels.

There are three types of economic nodes: Strength, Thunder, and Mjolnir. There are four different types of X-nodes: Vethor X, Strength X, Thunder X, and Mjolnir X. The status of each node depends on the number of VET tokens that are being held.

For economic nodes, these amounts are 1 million, 5 million, and 15 million. For X-nodes you need to have 600k, 1.6 million, 5.6 million, or 15.6 million VET tokens. If you turn these to USD amounts, it means you need to invest about 300k dollars to get a Mjolnir node.

The idea behind these “status nodes” is to encourage investors to hold VET tokens. This will help to stabilize the price and reduce volatility in the market. You can get an economic or X-node status to your VeChainThor wallet by simply requesting it after holding enough tokens.

The higher node status you have, the more block rewards you get. All rewards are paid in VTHO tokens. You’ll find more information on different nodes from this article.

The largest holders of VET can also participate in the project development. Below is a video explaining VeChain governance.

Smaller investors are also rewarded in the VeChain system because every VET token you hold will also generate a tiny amount of VTHO token into your wallet. This is how other dual-token systems work as well. All you need to do is have VET tokens in the right type of wallet. If you have your tokens in an exchange, this is not the case. It depends on the exchange if you are given the gas tokens or not.

You should also remember, that in a dual-token system you need to have a small amount of gas token in your wallet for transactions. If your wallet has just VET you cannot make a transaction because the fee is paid in VTHO. This is the case with other dual-token systems too.

You can buy and sell VTHO on exchanges, just like VET. The value of VTHO is therefore not connected to VET in any way. If you are investing in a dual-token platform, you must always consider if it’s worth investing in the governance token or the gas token as well.

VeChain partnerships

VeChain is a bit like IOTA when it comes to token price movements. Both projects have had big boosts from partnership announcements. This makes sense because VeChain’s focus is strongly on the business sector.

This project has managed to build many significant partnerships over the years. You can find a comprehensive list from this link. As you can see, most of the strategic partners have connections to China.

VeChain has also collaborated with the Chinese government regarding a city called Gui’an. This should be a future tech hub of China and it’s also called “blockchain city”.

VeChain is mandated to be the blockchain technology partner of the government of Gui’an” (

One should remember, that China might be against Bitcoin, but it’s heavily invested in blockchain technology.

VeChain has also partnerships with BMW Group, Renault, and Microsoft. For example, VeChain is building a blockchain solution with Renault, which connects the reseller, buyer, and future owner of the car.

The following quote is from

Currently, information about customers and their vehicles is spread across multiple information systems maintained by automakers, insurers, repair shops, and more. This new digital car maintenance book, with its open architecture, gathers all important information in one place accessible by the customer. For instance, if an owner wants to sell a vehicle, he/she can make information about the history of the vehicle more transparent by authorizing the potential buyer to access all the data in the digital car maintenance book, creating more trust between the buyer and the seller.

The list of partnerships includes a dozen global giants, of which many are supply chain and consumer goods related enterprises. You can see DB Schenker, Kuehne & Nagel, LVMH (Moet Hennessy Luis Vuitton), Bright Food, and Walmart China.

VeChain is also connected to the governments of China, Italy, and Singapore with Delta Airlines and the University of Oxford. Here is another link for VeChain partnerships. You’ll find more news from

VeChain as an investment

The VeChain brand is already five years old and the company behind it, BitSe, has built blockchain solutions for a long time. There are several global enterprises as partners and more coming each year. VeChain also has a unique position in its supply chain management niche. No wonder many investors like this project.

The VeChainThor blockchain is also a high-speed 3rd generation blockchain, which has enough capacity to challenge all competitors. What differs VeChain from others is the Proof of Authority consensus. This is a business-oriented model and not a decentralized solution.

One can also see how the project is going forward technically. New features are being added each year. One such is the VeVote platform, which allows VeChain token holders to participate in the development work.

Below is a video of VeChain’s developments in 2019/2020.

The community was shaken in 2019 by a hacking incident, which is inspected more thoroughly in the video above. In the big picture, it didn’t undermine the image of VeChain.

The project got a massive boost in the summer of 2020 after VeChain was named as one of the speakers in the Shanghai World Artificial Intelligence conference. VeChain will be in front of a big tech crowd among global giants like Microsoft, Amazon, Alibaba, Tencent, and Huawei.

All in all, the future looks bright for this project. VeChain also has a strong follower base in social media with thousands of hardcore “hodlers” who believe in the project.

VeChain price and how to buy VeChain

VeChain is not yet listed in Coinbase, which is the most popular exchange and fiat on-ramp for newcomers. The best place to purchase VeChain is Binance, which has both VET and VTHO tokens.

If you want to convert your fiat money to VeChain, do either:

  1. Buy bitcoins with EUR/USD/GBP/etc. from Coinbase, which is a reliable, popular, and easy-to-use service for fiat purchases. Next, send your bitcoins to Binance and convert them to VeChain.
  2. Binance supports SEPA transfers and other fiat deposit methods from many different countries. You can make a fiat deposit directly to Binance, convert your fiat currency to Bitcoin, and finally purchase VeChain with those bitcoins.

You can also get staking rewards from your VeChain tokens from Binance. Currently, the rate is 3% to 5%. Select Finance from the top menu and then Staking.

vechain binance staking

Other popular exchanges to buy VeChain are Bittrex and KuCoin.

If you want to store your VET tokens in an external wallet, there are many good options available. You can download the official VeChainThor wallet from iOS or Google Play store. Free wallets such as TrustWallet and Exodus support also VeChain. For ultimate safety, choose Ledger Nano S, Ledger Nano X, or Trezor hardware wallets.

As mentioned earlier, transaction fees must be paid in VTHO. If you purchase VET tokens to your wallet, remember to also buy a tiny amount of VTHO (like 1$ or 1€ worth is enough) and send that to your wallet as well.

Follow VeChain on Twitter to keep up-to-date with the latest news. The Medium account of VeChain is also updating regularly The Reddit page is and the official website can be found at Youtube is also a great source for news because there are several active YouTubers making videos of VeChain.

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