Transcoding files is possible on the VideoCoin Network since the K2 Release.
The easiest way to get started with file transcoding is using the VideoCoin Network Console Interface.
After you've created an account, you'll need to send in VID into your wallet. See more details here.
Create a new stream and set "File Upload" as the option.
You can either drag and drop a file from your computer or paste a URL with a file.
Once you start stream, you will see an output HLS available for download.