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What Is Vechain? - A Comprehensive Guide

 

By Nerly Shammah Sep 22, 2022

 

 

Vechain, sometimes called VechainThor, is an open-source blockchain that aims to build a much more scalable, sustainable, and efficient ecosystem for the mass adoption of blockchain for enterprises or businesses.

 

As a fundamental focus, Vechain introduces a new model of blockchain governance with underlying features that make the network power-packed for businesses to build on top.

 

 

Understanding VechainThor

 

Blockchain businesses are known to be limited in growth due to the inefficiency of blockchain structures for business environments. Enterprises cannot scale or build sustainable businesses on the network as a result of its limited infrastructure.

 

Thus, Vechain aims to serve as a foundation for the mass adoption of blockchain for enterprises and users. What makes VechainThor business-friendly is its governance model and underlying features aiding business efficiency as time, cost, control, and reliability is set in.
 

VechainThor Governance

 

VechainThor is based on a proof-of-authority (PoA) governance consensus. However, unlike regular PoA blockchains, VechainThor has many layers to its governance system.

 

This, regardless of its complexity, makes it more efficient and secure. That said, although cryptocurrency blockchains are most often inclined to decentralization, thus adopting a consensus mechanism that ensures this requirement is met is key, VechainThor is a bit distant in terms of truly decentralized governance, however, its model allows far more flexibility, efficiency, and reliability.

 

How Proof-of-Authority Is Applied To VechainThor

 

Validators on the VechainThor blockchain are called "Authorized Master-nodes(AM)". To become a validator on the network, one is subject to a strict Know Your Customer(KYC) procedure that satisfies the foundation.

 

That said, VechainThor believes that a system is considered efficient when there's a balance between centralization and decentralization, thus, it adopts the PoA consensus algorithm in other to solve three problems of producing blocks:

 

-When a new block produced

-Who generates the block

-How to choose the "trunk" from two legitimate blockchain branches or chains.

 

Typically, to achieve network security and efficiency, VechainThor adopts PoA to solve the above-mentioned problems. A block producer is known beforehand just as the production time is also known.

 

How long does it take to produce a block on VechainThor?

 

It takes 10 seconds to produce a block on VechainThor. A validator is limited to this time frame and a block is mined accordingly, this is considered more time-efficient as it is faster than proof-of-work blockchains like Bitcoin.

 

Also, the "Trunk" in this case represents the "Longest chain"

 

In the case of Bitcoin where two blocks are found unique or mined at the same time, the nodes or miners typically use both chains parallel to each other until one chain is longer than the other. 

 

The chances of one chain outworking the other are inevitable as bitcoin mining requires computational power to participate.

 

That said, VechainThor computes a system to determine the better branch or chain by calculating the accumulated witness number(AWN) which is represented as "TotalScore'' in the block header.

 

Typically, this is determined by the number of Authorized Masternodes(AM) that witness the generation of said blocks. Considering this, the branch with the larger AWN is chosen as the better chain, but in situations where both branches have equal AWNs, the one with the shorter length is chosen.

 

Economic Model - Two-Token Design Explained

 

The growth of any ecosystem is largely dependent on its financial structures which directly impact its overall economy. With blockchain technology, a limitation is perceived due to the volatility of cryptocurrencies, thus, transacting via the network proves inefficient as the "cost" cannot be predetermined.

 

VechainThor is based on a bi-token system, or simply a Two-Token Design. These include the Vechain Token (VET) and the VeThor (VTHO).

 

VET is simply the native currency on the blockchain, a value transfer medium that enables its circulation through the ecosystem. VTHO on the other hand is the gas token of the network, VTHO is created at 0.00000005 VTHO per VET per block. 70% of VHTO paid as fees for transactions are destroyed or burned, while 30% goes to the validators or block producers, the authorized master nodes.

 

VTHO enables the pre-determination of the cost of transacting on the network as it detaches the cost from the price value and volatility of VET.

 

The market demand and supply of VTHO directly influence the parameters that determine the gas price for transactions. Currently, a base measure is set to 1 VTHO/Kgas.

 

Transaction Models  Explained

 

To make VechainThor a blockchain truly built for enterprises, the network adopts different transaction models designed to power a business environment.

 

● Fee Delegation

● Multi-Task Transactions

● Forcible Transaction Dependency

● Transaction Lifecycle Control

 

This is a summary of the underlying structures of transaction that makes VechainThor a blockchain for businesses.

 

see the whitepaper(advanced)

 

Fee Delegation

 

What is fee delegation? Typically, VechainThor enables individuals to act as "gas payers" for designated transactions or transaction accounts.

 

Via the Multi party payment and designated gas payer protocol, individuals or cooperation can create "master accounts" that foot the gas for transacting via their medium. 

 

This proves efficient as businesses can bypass worries of transaction costs from their users by setting up accounts that cover the cost of transactions.

 

Multi-Task Transactions

 

This has to do with the grouping of specific data types into one transaction. The multi-task algorithm is a medium for secure and efficient handling of transactions on the VechainThor blockchain.

 

Tasks such as fund distribution or asset allocation and token airdrops can be handled via the Multi-Task mechanism.

 

Forcible Transaction Dependency

 

Forcible transaction dependency typically allows one to modify its transaction success to be dependent on the success of another.

 

For example, TX1 is assigned a dependent for TX2, thus, TX2 is processed successfully if TX1, its referenced dependent, is found in the ledger and tagged "successful". 

 

In our humble opinion, this model could be expanded and applied in complex structures as a defense mechanism for "DDoS ATTACKS", an attack would be limited or controlled by a system where activities are dependent on the success of another. This directly forces the attack away as they cannot be determined without the success of the dependent reference.

 

Transaction Lifecycle Control

 

Typically, on regular blockchains, a transaction reverts back to the associated account when not chosen by miners or validators in blocks for verification.

 

This could be a result of network congestion where block producers will typically prioritize transactions with higher fees paid.

 

The process of the return or revert can be forever, hours, a day, or more. That said, with VechainThor transaction lifecycle control, one can control how long his/her transaction should be on the waitlist.

 

Typically, businesses can set up structures where users can choose time frames to allow for a transaction to be processed or defined as failed and funds refunded. This eases the fear and frustration that often arises when transactions take too long to process.

 

Is VechainThor A Good Investment?

 

VechainThor is considered a robust solution for businesses, allowing real-time transfer of data and customizable operation structures.

 

It has its origin tracked way back to 2015 when it was based on the Ethereum blockchain as VEN, a subsidiary of Bitse, one of China’s largest blockchain companies before transitioning to its own blockchain in 2018 as VechainThor (VET).

 

As an established network, VechainThor has a track record of developments all in march of achieving its goal of mass adoption of blockchain for enterprise users.