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NEO is a unique blockchain platform that combines digital and traditional assets to create a “smarter economy.” The project originates from China and has the Government’s full backing. This unusual partnership has given it the label of “Chinese Ethereum.”
While it’s still far from Buterin’s groundbreaking blockchain, NEO’s exciting features set it apart in the Cryptosphere. For instance, it uses two different tokens. It uses one (NEO) for payments and the other (GAS) for transaction fees.
Furthermore, NEO seeks to become a digital, decentralized, and distributed platform for non-digital assets. By using smart contracts, users could transfer everyday economy goods onto the NEO blockchain.
Does it have what it takes to make it? Let’s find out in this beginner’s guide to NEO!
NEO in a nutshell
- NEO is an open-source blockchain platform.
- The project is the brainchild of developers Da Hongfei and Erik Zhang.
- NEO first launched as Antshares in 2014 and but changed its name to NEO in 2017.
- It’s the first-ever Chinese public blockchain.
- NEO aims to encourage universal blockchain adaptation.
- It supports developers to create DApps and smart contracts on its blockchain.
- It provides digitals assets, digital identification, multi-language services, and other services.
- The project’s mission is to create a smart economy.
- The NEO network comes with two tokens, NEO and GAS.
- NEO has over 15 trading pairs between the most popular cryptocurrencies.
- Over 40 trading exchange platforms list NEO.
- NEO rose over $5 million in 2015 during two crowd sales events.
- Anyone can use and own NEO.
What is NEO?
NEO is an open-source blockchain and cryptocurrency platform. It seeks to create a community-based network by providing a more secure network and a smart economy. Furthermore, it aims to furnish digital assets through digital identification, smart contracts, domain naming, and multi-language service.
NEO also bridges the gap between traditional finances and digital assets through its platform. For example, Travalia, a traveling website, collaborates with the platform to help users book a hostel, a flight, and other traveling amenities using the NEO token.
The group behind the project uses an Eco-boost drive to help users create decentralized applications (Dapps) and smart contracts.
This feature complements its fundamental target to digitize assets using decentralized networks. The NEO network issues and manages two digital assets, the NEO and GAS tokens. Moreover, it is the first public blockchain platform to implement the dual token model.
NEO token holders can vote in the ecosystem. In return, they get a reward in GAS. Next, they can use these tokens for network management, block creation, and any concerns requirement.
The other token on the blockchain is the GAS. Its role is to fuel and provide security for the ecosystem. Additionally, it can be a reward for users participating on the platform.
The dividends in GAS can accumulate in fees for various services on the network. Users can deploy GAS to maintain the blockchain by running smart contracts and other services. The service prices are equivalent to the computing assets that each smart contract uses.
Lastly, clerks receive these fees as remuneration for their work on the networks. The ecosystem produces GAS at a pace of 8 GAS for each block with the construction of the blockchain. In addition to other qualities, the blockchain is homogeneous to Ethereum.
A Brief History of NEO
Despite the rules governing cryptocurrency in China, NEO could become the first-ever Chinese public blockchain network. It initially appeared in 2014 February as Antshares. However, the developers renamed it NEO in 2017.
The project is the product of a Shanghai-based blockchain R&D company, Onchain. Leading this establishment are Da Hongfei and Erik Zhang. They are the company’s co-founders and have the blessing of the Chinese Government. That’s why many called it the “Chinese Ethereum.”
Hongfei attended the South China University of Technology and has a Bachelor of Art in Technology and English. Meanwhile, Zhang pursued a course in Information Security at Shanghai University.
Erik Zhang is the creator of the Delegated Byzantine Fault Tolerance algorithm. This mechanism expects to hinder conniving members from partaking in the blockchain’s activity. The NEO blockchain uses this innovative consensus mechanism. Ultimately, the Chinese Government chose to back NEO because it protects the investors’ funds.
A recent publication on China’s 13th five-year plan stresses the importance of national blockchain standards. Also, it makes blockchain development a priority. This project was the first to pass these measures.
In 2015, Neo sold 40 million tokens during its first and second crowd sales. In total, the project gained over $5 million.
At the time of writing, per Coinmarketcap, NEO was ranked at 47 by market cap. Also, one unit was worth $49.58 with a 1.29% 24-hour increment.
The token’s market capitalization stood at 3,499,215,798. Also, the circulating supply of 70,538,831 units represented 71% of the 100,000,000 maximum supply. Lastly, it’s all-time high stood at $198.85.
How Does NEO Work?
According to the NEO website and whitepaper, its priority is to create a smart economy. This concept translates as a sum between digital assets, digital identity, and smart contracts. Also, the project wants to achieve it through distributed networks that connect these three elements.
A smart contract refers to the productivity gain that comes through the automated interconnections of various economic factors. They include local, regional, and global economic layers.
Digital assets use electronic data and can be part of a smart contract. The platform helps users convert traditional assets into digital by using the smart contract.
In the project’s vision, the digital asset remains decentralized. However, it is also under the protection of law by using digital certifications on the blockchain.
The ultimate Digital Identity should be a connection between the digital and physical worlds. And, NEO should help bridge the physical world with digital assets. Lastly, each organization, individual, device, or application should be identifiable in the network.
NEO achieved this on its blockchain by using digital certificate issuance model X.509. Also, it includes the use of multi-factor authentication methods such as voice, SMS, fingerprints, facial recognition, etc. Lastly, all transactions and belongings have the signature of one’s digital identity on the network. This way, it creates accurate and fraud-proof records of one’s actions.
Smart Contracts are the last components of NEO’s innovative economy. The platform’s smart contract supports java, c-sharps, python, and other programming languages. This feature should make it effortless for any developer to use it.
The NEO consensus algorithm is the Delegated Byzantine Fault Tolerance. This mechanism allows users to vote on trusted nodes (delegated nodes) based on token holdings. These delegated nodes collect all transactions in blocks and share them. When a new block receives 66% of consensus, it becomes part of the blockchain.
How to Buy and Own NEO
Anyone can purchase NEO on the major cryptocurrency trading exchanges around the globe by trading other cryptos for this token. The other trading platforms that allow you to exchange fiat currencies (USD, GBP, etc.) for the coin include:
- Huobi Global
- Mandala Exchange
It’s worth noting that the NEO token is indivisible. So, contrary to other crypto coins, you cannot buy or sell only a fraction of them.
Where to Store NEO
If you are keen to purchase NEO, you should initially have a wallet to store the tokens. You can choose between:
The network provides the platform’s wallets available in desktop, mobile, extension, and web formats. The following include other exchanges as well:
- NEO – GUI
- ONTO Wallet
- NEO Line
- 03 Wallet
- NEO – CLI
Benefits of Using It
- NEO uses the Byzantine fault tolerance algorithm and the digital certificate assurance model X.509. These features help built trust by creating accurate records of a transaction on the blockchain.
- Its smart contract comes with the most common programming languages (java, python, c sharp, etc.). This way, developers can create DApps on the blockchain by using their code of choice.
- The platform comes with its wallet versions suitable for anyone. Also, they can link them to numerous trading exchanges to ensure the security of their trades.
- The project’s latest mainnet, NEO 3.0, has catapulted smart contract DApps to new heights. It comes with a full-stack DeFi protocol, Flamingo finance, allowing users to wrap, swap, and stake tokens to earn rewards.
- It has a built-in oracle and cross-chain interoperability that allows users to engage in cross-chain operations between blockchains.
- The mainnet comes with a form of file storage, NeoFs. This storage network allows its users to have complete control over their data.
- It has a decentralized ID solutions system.
- This update comes with new architecture and governance NEP 17, a consensus is achieved through a dynamic and democratic on-chain governance mechanism.
- The 3.0 version allows the fastest transactions time, 1,000 transactions per second. In the future, it should support 10,000 transactions per second.
The Bottom Line
NEO is a highly ambitious project. Despite the glaring association with the Chinese Government, the project went out of its way to validate its security. For instance, it secured the listing of its primary token on some of the most legitimate crypto exchanges.
The primary issue with NEO is that it has too much on its plate. It aims to support a token economy similar to Ethereum. However, it is struggling with slow development and the indivisibility of its main token. Future improvements should increase its market appeal. Unfortunately, we can’t tell when that will happen.