We heard about Tron, Stellar, Cardano and IOTA. But what is this cryptocurrency and blockchain called NEO. NEO calls itself ‘an open network for smart economy’. So let us dissect what Cryptocurrency NEO is all about.
What is NEO?
NEO is primarily a non-profit community-based blockchain project. Its main purpose is to realize a ‘smart economy’ with a distributed network. NEO uses blockchain technology and digital identity to digitize assets and automate the management of digital assets in order for the smart economy can come into fruition
NEO is not a short-term project, even though it was created back in 2014 as a real-time open source on GitHub back in June 2015. The interest in NEO has been growing. It has been called the “Chinese Ethereum”.
Digital Assets, Digital Identity, Smart Contracts
NEO’s vision of the future focuses on the Smart Economy.
Digital Assets are programmable assets that exist as electronic data. This data can be decentralized due to the Blockchain’s nature, making it trustful, traceable, transparent and free of intermediaries. The NEO platform allows users to register, trade and circulate different type of assets. But it goes even a step forward. Assets registered through a validated digital identity are protected by law. In this way, there can be a proved connection between physical and digital assets.
As the name by itself says, a digital identity refers to the ID information of individuals, organizations and other entities that exist in electronic form. The digital identity system used by NEO is based on the PKI (PublicKey Infrastructure) X.509 standard.
According to NEO, the NeoContract smart contract system is the biggest feature of the seamless integration of the existing developer ecosystem. Smart Contracts can be programmed using many programming languages including C# and Java. You don’t need to learn a new programming language like the Solidity language for the Ethereum blockchain in order to get to work with NEO. Not only that, NEO’s Universal Lightweight Virtual Machine, NeoVM, implements high certainty, high concurrency and high scalability.
NEO Decentralized Applications (dApps)
NEO has an important list of decentralized applications that work within the NEO blockchain. We can mention Red Pulse Tokens (RPX) issued by Red Pulse. Red Pulse is an event-driven research firm covering markets events impacting Chinese companies, sectors and the economy.
Qlink, developed in Singapore by the Qlink Foundation, uses blockchain technology to create a decentralized mobile network. Its purpose is to allow P2Peer Wi-Fi sharing, mobile data converted content distribution, enterprise telecom services, and crowd-sourcing.
THEKEY is a Decentralized Ecosystem of Identity Verification Tool Using National Big-data and Blockchain. The team is developing an identification verification (IDV) tool.
There are many other Decentralized Applications working within the NEO Blockchain and the Dapps are increasing every day.
NEO Algorithm – delegated Byzantine Fault Tolerance
NEO has been dubbed the ‘Ethereum of China’ due to the fact that it offers smart contracts as Ethereum does. It uses neither a Proof of Work (PoW) nor Proof of Stake (PoS). Instead, it uses a consensus mechanism known as delegated Byzantine Fault Tolerance (dBFT).
With the dBFT, there is a different arrangement between the different blockchain nodes. The network becomes invulnerable to the Byzantine General Problem. It would be able to achieve consensus even if malicious node would attempt to cause harm.
In order for the dBFT to work, it is important to acknowledge the different parts who participate in the ecosystem. Furthermore, there are professional node operators that gain an extra income and users that want to explore the different features of the ecosystem. In this way, acknowledging these groups would create a secure ecosystem.
What about consensus? It happens via block verification amongst professional node operators. Each of these nodes are appointed by ordinary notes through a voting process. If there is a 66% agreement amongst the nodes about the information broadcasted by the professional nodes, then consensus is achieved.
Gas in the Ethereum’s network is necessary for all transactions in the blockchain. In the NEO platform, gas works in a similar way. It is the fuel of the network in order for it to work. If one party decides to use the network and its resources, then it needs to pay with Gas for the resources used.
All decentralized applications (dApps) need to pay for gas. The more resources they use, the more gas they need to pay.
Users that hold NEO coins in their private wallets are rewarded with gas. The formula used in order to calculate the gas received in a wallet depends on the time, the NEO shares owned and other parameters. NEO gas can be sold in different exchanges or it can be held by the investor if they believe it can achieve higher returns in the future.
NEO in the Cryptocurrency Market
Today NEO is the 8th cryptocurrency in terms of market capitalization. Each NEO can be bought at $115 dollars and its market capitalization is currently $7,492,745,000. In December 2016, NEO was trading at around $34 dollars.
NEO price didn’t skyrocket as most of the other cryptocurrencies, but it was consistent during the second half of the last year. Lately, its price has been increasing in the market.
As more dApps are developed on the NEO blockchain, the price of NEO will increase as well its market capitalization and the price of Gas associated with transactions.
NEO has an active global community regardless of the China government’s hostility against ICOs and Cryptocurrencies. The developer team is making sure that it is operating in compliance within the Chinese laws and regulations.
As we move towards a more decentralized world, with more ICOs than ever before and with an increased interest in Blockchain technology, NEO could be “the one”. Could it be a competitor of Ethereum? Maybe. Would other entities use NEO in lieu of Ethereum? Maybe. Nonetheless there are some striking differences that make the NEO platform rather attractive in terms of its future use.
What do you think about NEO’s place as an Ethereum competitor?
Until Next Time…
Faith Sloan “QueenWiki”
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