Why do we need VDG tokens and what do they do?
VDG is used to pay for transactions and to send data to the blockchain. The utility token covers the fees that are associated with creating a new record, such as gas on the Ethereum blockchain.
Gas is a special unit that quantifies the amount of work needed to perform actions on the Ethereum blockchain. Much like a car which requires a certain amount of gas to get from Point A to Point B, actions performed on the Ethereum network require a certain amount of gas to complete.
In addition to using gas to perform computations, gas is also used to pay miners who provide their resources to the Ethereum blockchain, in the form of a transaction fee.
Why can’t users just use ETH to pay for gas?
VeriDoc Global is a DApp and was never intended for just one single blockchain. Limiting payments to ETH would mean that when VeriDoc Global is available on other blockchains, document issuers would need to pay for fees in multiple cryptocurrencies.
For example, a document issuer wants to create a document hash on the Ethereum, Bitcoin, Stellar Lumens, EOS and Cardano networks. Without a VDG token to cover all the transaction fees across the five networks, the document issuer would need to pay VeriDoc Global using five different cryptocurrencies.
Will the price of VDG ever be capped?
The price of VDG will never be capped. VDG is used to pay for the fees that are associated with creating a new record on a blockchain. The higher the price of VDG, the more QR codes a user can generate with a single VDG token.
For example, if transaction fees cost $0.25 and VDG is $1.00, it will cost users 0.25 VDG.
If the cost of VDG is less than the cost of fees. Users will need to pay several VDG for one QR code.
For example, if transaction fees cost $1.00 and VDG is $0.10, it will cost users 10 VDG.
There is a lot of news going around that governments are cracking down on ICOs because they resemble securities. Is VDG a securities token?
VDG is not a securities token, it is a utility token.
It’s important to understand that not all ICOs are securities. Projects that are looking to raise money to fund an idea are considered securities. These are the projects that governments and regulators are focussing on because unfortunately, not all ideas end up becoming a real product or service. Some projects will also use their “big idea” to scam investors.
VDG has been tested according to the Monetary Authority of Singapore’s guide to digital coin offerings and according to Singapore Securities Law, does not represent a securities token.
VDG is a utility token for two main reasons. Firstly, VeriDoc Global already has a working product. The company has self-funded the development of their verification system for years and does not need to raise any money to develop their idea. The main purpose of the VDG ICO is to create liquidity in the market prior to launching the Main Net. Secondly, VDG is needed to generate a new QR code on the system. VeriDoc Global charges a toll to cover the cost of gas required to create a transaction on the Ethereum blockchain. It is because of this process that it is considered a utility token.
Which ETH address do I use for whitelisting? Why can’t I use my Binance ETH address?
It is important that you only use an ETH address that you own and have 100% control over. During the ICO event, a smart contract will be doing all the leg work. It will automatically receive contributions from registered ETH addresses (which we refer to as whitelisted addresses) and it will automatically return VDG to the sender’s address. If you register an ETH address that is owned by an exchange such as Binance, then Binance will receive your VDG instead of you.