Vechain is giving tremendous returns to investors. By seeing it, you may also want to invest and, as an intelligent investor, wants to know more about it. I will try my best to provide you with all the relevant information to make a proper investment decision.
But in short, as per my opinion, yes, vechain is a good investment, and you should invest in it.
So let us take a deep dive and analyse vechain both technically and fundamentally.
Vechain past returns and trends
Vechain currently has two cryptocurrencies, VET and VTHO(VeThor); we will discuss the significant reason for having two cryptocurrencies later in this article.
But before that, have a look at the current market position of both the cryptos:
|Market capitalisation||$3.5 Billion||$153 Million|
|Average Volume in 24 hours||$192 Million||$6.23 Million|
|Returns in the last one year(Approx)||79%||150%|
|Maximum returns||1100% in April 2021||1500% in April 2021|
Now let us compare vechain with other cryptocurrencies. Vechain has given more returns than bitcoin and Ethereum but comparing with them is not fair because they are too popular and their market cap is too high. So let us compare them with cryptocurrencies having market caps between $3-$4 billion to make it a fair comparison.
Vechain vs Litecoin
The blue line shows the return given by VET in different periods between Jan 2021 to Jan 2022.
The purple line shows the return given by VeThor in different periods between Jan 2021 to Jan 2022.
The green line shows the return given by Filecoin in different periods between Jan 2021 to Jan 2022.
Filecoin, which has a current market cap of about $3.2 Billion, gave a negative return of 6% during the period, whereas VET and Vendor gave a positive return of 180% and 401%, respectively.
You can also locate different graph points by visiting this link: coinlib.io/en/compare/2021-01-02/VE,T/FIL/VTHO.
Vechain vs Ethereum classic
Ethereum classic has a current market cap of about $3. Billion gave a return of 371 % during the period, whereas VET and Vendor gave a positive return of 180% and 401%, respectively.
Ethereum classic is giving better returns than VET but lower than VeThor.
You can also locate different graph points by visiting this link: https://coinlib.io/en/compare/2021-01-02/VET/ETC/VTHO.
Why is Vechain giving high returns?
Many big companies like BMW PWC invested in Vechain, which increased,their market price. You must know the fundamentals and purpose of Vechain to understand the primary reason for investing by large corporations.
Fundamentals of Vechain
Vechain is a blockchain network that helps companies to track their products with the help of their cryptocurrencies. It focuses on increasing efficiency, traceability and transparency ability in the supply chain.
How does Vechain help the supply chain?
Vechain acts as a smart contract and uses RFID ( Radio Frequency Identification) and IOT (Internet over time), QR code and other sensors to record product temperature, location, the humidity of the product at a given point of time.
Smart contracts- In simple words, they are a program used in the blockchain which runs automatically after a prementioned condition is completed. In this case, the condition could be “ Record product temperature, location and humidity after every five minutes”. So after every 5 minutes, a smart contract will be executed, and information will be recorded automatically.
RFID, IoT, and other sensors are sensors or chips used in outer packaging to track the product’s location, temperature, humidity, etc. See the image below for a better understanding:
Image credits- Idtechex
QR code– It can be scanned to verify the product’s authenticity. The information recorded in the Vechain can be displayed by scanning a QR code. Since every product has a unique QR code, companies use it to identify fake products in the market.
Since Vechain uses smart contracts and works on blockchain technology, information recorded in it cannot be changed by anyone, which reduces the chances of fraud and increases work efficiency. That’s why companies are investing in it.
Note: You may also want to know how Vechain records information tracked by sensors without the internet? It is not essential from an investors point of view, and I will not explain it, for understanding you can relate it with the fact that your cell phone can also be tracked without the internet.
Some of you may think that why there is a need for Vechain, information and data can be stored in other blockchains like Ethereum or bitcoin. You are right and may be surprised to know that Vechain Sunny Lu initially used Ethereum to store information.
But he faced a big problem of price fluctuation in the crypto market. Corporates cannot use blockchain, which is too speculative, so to solve this problem, Sunny Lu introduced two new cryptos, VET and Vendor, in 2018.
You may think that both VET and VeThor are highly speculative as their price saw a significant increase of 180% and 417% in the last 12 months. Then how do they solve the problem, and why did he make two different cryptos?
Don’t worry; it has a straightforward concept, and I will explain it to you.
Why does Vechain has two cryptos ( VET and VeThor)?
Let us compare VET with a company’s share to make it easy. You get a dividend for holding a share; similarly, you get VeThor for holding a VET, and this VTHO is used to record transactions in the supply chain by corporates like Pwc, BMW etc.
You get 0.00000005 VeThor for holding a VET for 10 seconds, which means 0.00000030 VeThor for holding 1 minute, 0.000018 for holding 1 hour, 0.000432 for holding a day 0.15768 for having a year.
It means you get a free VeThor if you hold a VET for 6.34 years.
Note: This rate may change in future.
So corporations need to invest in VET, and they will get VeThor for free that they can use to record transactions in the VET blockchain, which ultimately protects them from market speculation. It is like car and petrol, you need petrol to run car and here you need VTHO to record in VET.
In every VTHO transaction under the supply chain. 70% VTHO gets destroyed, and 30% will be given to the authorised person who verifies it.
Who verifies Vechain transactions?
Unlike other cryptos like bitcoin, vechain uses POA ( Proof of authority) model to verify transactions. It simply means Vechain selects some people and give them the power to verify a transaction.
It means Vechain is centralised, but it is also necessary for its business model as corporates will not prefer unauthorised persons.
You can also apply for becoming an authorised person from their official website – https://www.vechain.org/.
What is the supply of Vechain?
VET has a limited supply of 86.7 Billion tokens, but since VTHO (VeThor) is obtained from VET logically, VeThor has an unlimited supply.
Should you invest in Vechain?
You should invest in Vechain because major corporations are using VTHO to add efficiency and transparency to the supply chain. It also gives massive returns in the last year; its volume is relatively high, showing people are interested in it. So as in my opinion if you are a long-term investor then you should definitely invest some part of your income in Vechain (VET).
If you are planning to invest for a short period then be aware of the current market situation and consider investing in VTHO.
Frequently Asked Questions
Is Vechain a good investment?
Yes, Vechain is a good investment.
Is Vechain dead?
No, Vechain is not dead and contributing in supply chain.
Is Vechain a private crypto?
Vechain is a private company but you can also invest in their cryptocurrencies VET and VTHO.
Is Vechain decentralised?
Vechain uses the Point of Authority model which makes it centralised.
Is Vechain limited supply
Vechain VET has a limited supply of 86.7 Billion coins. On the other hand, VTHO has logically unlimited supply because it is obtained from VET.