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VeChain Vs. VeThor – What’s the Difference?

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Understanding the key differences between Vechain (VET) and VeThor (VTHO) is a vital step to increasing your market knowledge. Both of these tokens are part of the VeChainThor public blockchain ecosystem. However, they serve very different roles in the Blockchain-as-a-Service platform's strategy. Here's everything you need to know about Vechain (VET) vs VeThor (VTHO).

VeChainThor

The VeChainThor blockchain operates as an enterprise-level blockchain infrastructure provider. The network specializes in logistics with a focus on the integration of IoT (Internet of Things) devices). Currently, the network supports a wide array of smart sensors and other advanced technologies including NFC chips, QR codes, and RFID trackers.

The VechainThor blockchain was Founded by ex-Luis Vuitton executive, Dunny Lee in 2015. The network expanded its operations in 2018 to include a programmable layer to support smart contracts and Dapps. This step introduced the current dual token system to the market.

Vechain (VET) vs VeThor (VTHO) - Twitter

Vechain (VET) vs VeThor (VTHO) – Twitter

What is Vechain?

VeChain (VET) is the main cryptocurrency for the VechainThor network. As a cryptocurrency, its primary purpose is to operate as a medium for transferring value. The token is resilient and can be sent internationally in a p2p manner. VET is designed to fluctuate based on market speculation. This approach makes the token a popular selection for traders.

VET tokens are also required for the creation of VTHO. Users are rewarded with VTHO for holding a balance in VET. This structure incentivizes long-term saving and adds another layer of interconnectivity between the two tokens.

What is VeThor?

VeChainThor Energy is what powers the backend of the VechainThor blockchain. These tokens operate like gas on the Ethereum network. Developers must hold VTHO to execute smart contracts and transactions. As such it’s a vital component of the ecosystem. It's also how smart contracts send data back and forth.

Vechain (VET) vs VeThor (VTHO) -Stats

Vechain (VET) vs VeThor (VTHO) -Stats

What Problems was Vechain Built to Alleviate?

VET was designed to provide traders with a speculative asset to arbitrage trade and secure ROIs. The token is unique because it separates the market speculation from the cost of using the VeChain Thor blockchain. This makes it cheaper for developers to create and manage Dapps versus networks that use a single token approach.

What Problems was VeThor Built to Alleviate?

VTHO was an essential addition to the chain after the network introduced smart contract programmability. This upgrade required a method to incentivize nodes for executing network computations. Blockchains use gas tokens for multiple reasons. They add to the trackability of the systems in use and provide rewards for participants.

Gas fees serve another role in reducing spam posts on the blockchain. When people have to pay to place code on the blockchain it helps to ensure that only finished projects make it to the system. This strategy can reduce losses due to hacks, programming errors, and much more.

How Does Vechain Work?

VET is a VIP-180 standard token which means it adheres to the VechainThor interoperability requirements. These tokens are created when a new block is generated on the network. This structure provides the network with predictive issuance which helps prevent inflation.

The VechainThor blockchain features a 10-second block time which has helped it remain highly scalable. This high-performance network can handle more transactions than Bitcoin or Ethereum. Notably, the network was set up to issue 0.00000005 VTHO per every VET held by the users. Today, this structure enables users to secure 0.000432 VTHO per day per VET they hold.

Proof of Authority

Another vital role that VET plays in the network is within the consensus mechanism. VechainThor introduces a completely new consensus system to remain valid and scalable. The system leverages Authority Masternodes to validate all operations. Authority nodes are limited in number.

There are only 101 Authority Nodes in operation. Each one is hand-selected by the Vechain Foundation, the nonprofit supporting the project. Unlike many other platforms, a majority of these nods are vetted completely including full KYC compliance. This approach means that authority nodes need to provide a host of personal information to participate in the network.

Interestingly, the PoA consensus mechanism eliminates miners and only relies on the authority nodes to remain valid. The network determines what node receives the reward for the validation based on their staked VET tokens. This strategy adds another layer of value to VET and provides users with more incentive to HODL the token.

Vechain (VET) vs VeThor (VTHO) - Homepage

Vechain (VET) vs VeThor (VTHO) – Homepage

How Does VeThor Work?

All developers must hold VTHO if they want to initiate computations on the network. VTHO's value fluctuates based on the congestion on the network. However, it was designed to never go as high as Ethereum's record-high gas prices. Rather, it remains equal to the cost of conducting transactions on the VeChainThor network.

Notably, VTHO leverages a burn mechanism to prevent inflation. The system burns 70% of the VeThor tokens used for transaction costs. The remaining 30% is then used to pay the authority nodes for their assistance. This strategy helps to prevent inflation and keeps the network flexible and responsive.

Community Governance

The VechainThor network leverages a hybrid community governance mechanism. This system enables regular users to have a say in the development of the network. They can even propose changes to be voted on by the community. Community governance systems are common in the DeFi market nowadays. However, VeChainThor's is a little different.

In the VechainThor governance system, there are master nodes. Specifically, a Masternode must stake 10,000 VET to gain 1 vote in the system. This structure means those who are the most financially vested in the network have the most say. This style of weighted governance is growing more common as well.

How to Buy Vechain (VET) and VeThor (VTHO)

Currently, VeChain (VET) and VeThor (VTHO) are each available for purchase on the following exchanges.

Binance – Best for Australia, Singapore, UK, & USA residents. Canadian residents are prohibited.

Discount Code: EE59L0QP for 10% cashback off all trading fees for non-USA residents. USA residents: Trade $100 & Earn $10 in 30 days after account registration.

KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens.  It is often the first to offer buying opportunities for new tokens.  USA Residents are Prohibited.

VeChain Vs. VeThor – Two Sides of the Same Coin

When you delve deeper into the Vechain (VET) vs VeThor (VTHO) discussion, it's easy to see that both tokens need each other to complete the ecosystem. The VeChainThor blockchain continues to raise eyebrows due to its enterprise-level features and security. As such, traders have found these tokens to be of great interest moving forward.

To learn more, make sure to peruse our Investing in VeChain guide.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com