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With the advancement of the blockchain technology, a lot of digital currencies and platforms are sprouting up rapidly. Many of them are just following the bandwagon but a few have been developed to solve real problems. NEO is one such platform that is set to change this industry.
What is NEO?
NEO is a special cryptocurrency that seeks to combine digital assets, digital identities and smart contracts onto the blockchain platform much in the same manner as Ethereum. It seeks to automate the management of digital assets using smart contracts.
Why was the name changed?
NEO was formerly Antshares and was developed in 2014. It changed its name to capture the new changes that it was to bring to the industry. The term neo means newness in Greek.
How does NEO work?
NEO will work using smart contracts to digitize physical assets to bring about a “smart economy”. The platform not only digitizes assets but also digitizes digital identities and certificates. It aims at bringing the traditional manner of trading into the digital world.
When was it developed and by who?
The main developers are Da Hongfei, Erik Zhang, the core developer, and Tony Tao, the Chief Executive Officer (C.E.O) among others. NEO was developed in the third quarter of 2017 and has since grown into a formidable digital currency.
NEO will have the advantage of having GAS as a separate token to fuel its operation and cannot be forked. Being able to digitize physical assets will push it a great deal. Its specialized PoS makes it much faster in terms of its transactions than its competitor Ethereum. Continue reading for more detailed information.
What are NEO’s special features?
Neo is the first open-source, decentralized digital currency in China. It has two crypto tokens which are Neo and Gas. Let’s look at some of the features that set this crypto apart from the rest.
- Digital Assets – This crypto aim at converting traditional assets into digital ones. It is set to use smart contracts in doing so. You’ll be able to register, circulate and trade different types of assets. Those digital assets will be protected by law using digital certificates and will also be decentralized. They will be set upon the blockchain increasing openness and trust.
- Digital Identity – Neo will enable development of digital identities of individuals and organizations. The information will always be stored in an electronic form. The identities will be usable through various security levels like using fingerprints, facial and voice recognition among others
- DApps – Neo is set to start supporting the development of decentralized applications like smart funds, decentralized exchanges, and AI-supported legal smart contracts
- Neo cannot be forked .
- Smart Contracts – With Neo, developers will not need to learn a new smart contract language, but will instead use mainstream programming languages. It also has a universal lightweight virtual machine (NeoVM) that gives developers the advantage of high concurrency, certainty, and scalability for the smart contracts based on the blockchain.
- It has two tokens which are NEO and Gas.
- The NEO token is a kind of an investment token with a hard cap of 100 million that are all pre-mined. They will be used for network management, consensus requirements, network changes and block creation.
- NEO, unlike other coins, is not divisible. The smallest part will always be 1.
- The GAS token also has a hard cap of 100 million but will act as NEO blockchain fuel. It is divisible and will be generated through mining using a decay algorithm for the next 22 years.
Why is it considered Ethereum of China?
Like Ethereum, Neo also uses smart contracts blockchain technology and is the first of its kind in China. It also supports digital certificates which could be a solution for untrustworthy nodes on the open source blockchain.
What is the NEO system?
NEO is a considered as a replica of Ethereum but uses a unique blockchain algorithm. NEO has two tokens. The NEO and the GAS token. The NEO token was pre-mined during the development phase and is indivisible. The smallest unit will always remain to be 1. The GAS token is divisible by a factor of 1/10^8. GAS will be mined using a special algorithm for a period of 22 years. Both tokens have a hard cap of 100 million.
This is a feature in NEO system that allows a cross-chain assets exchange and crosses chain distribution.
This feature is basically a quantum computer protection. If new quantum computers are developed posing a threat to the NEO system, this application will prevent any hacking attempts using such computers.
Delegated Byzantine Fault Tolerance is NEO’s consensus mechanism, similar to Bitcoin’s Proof of Work. It allows for better scaling and performance. In this mechanism, it will require a 66% consensus agreement among the peers to verify any transaction.
NEO operates on smart contracts. These are a set of commitments set on a digital platform. Neo contracts include validation, function and application contracts. These contracts are certain, high performing and are expandable. These features are possible thanks to NEO’s Neo Virtual Machine or NeoVM. This machine is AI controlled executing contracts at a very fast rate.
How is NEO similar to Ethereum?
NEO crypto is similar to Ethereum in a number of ways.
- Like Ethereum, it operates on smart contracts.
- It is decentralized and open-source based on the blockchain technology.
- Both have the ability to do atomic swaps.
- They can both digitize physical assets and provide digital identities.
The two cryptos also have some differences. The most obvious difference is that NEO is primarily a Chinese crypto, while Ethereum is spread across the world. Here is a more detailed comparison of the two:
- While Ethereum can be forked, NEO cannot.
- Ethereum works on Proof of Work consensus mechanism, NEO operates on Delegated Byzantine Fault Tolerance.
- Ethereum uses Solidity programing language, a language developed specially for it, while NEO utilizes the mainstream programming languages.
- NEO executes transactions at a rate of 1000 transactions per second as compared to Ethereum’s 15 transactions per second.
- Ethereum is focused on dApps and developing demands, while NEO is focused on future market demands.
- While Ethereum seeks to be anonymous, NEO has enabled the use of digital identities to be compliant with government regulations.
- You cannot mine NEO as all the 100 million tokens were pre-mined in the development phase. You can mine Ethereum like other coins.
- NEO gives GAS as dividends to NEO coin holders in private NEO wallets. The GAS is used to run transactions in the NEO ecosystem. This does not happen with Ethereum.
- The GAS in NEO is finite, but it’s not in Ethereum.
NEO rebranded from ANS (Antshares) in the third quarter of 2017. At the initial ICO, 1 Antshare was equivalent to $.036. This value has risen significantly to just about $123 for one NEO. The market capitalization as of January 23, 2018, was $8,018,770,000 with a volume of about 263,389,000.
NEO’s meteoric rise was spurred by its new technology and the growth of the digital currencies in Asia. It offers more than what other cryptos are offering including the ability to digitize, register, distribute and trade physical assets. Its transactions are also much faster than its closest competitor Ethereum.
Price Change and Volatility
Like all digital coins, NEO cryptocurrency has had its fair share of volatility with its price shifting dramatically from time to time. In June of 2017, 1 NEO coin was just about $1.91. A few weeks later in August of the same month, the price suddenly rose by 160% to about $35. The current price now is about $125 and it has a potential to go higher. It once reached an all-time high of $187 on January 16, 2018.
Let’s put this changes in price into perspective. If you had bought NEO coins last year in June for $1000, you would have received about 523 coins. Assuming you were lucky enough to sell them at $187, you’d now have $97,905, a 9690% increase. That only happens in this industry.
Reasons for its boom
- One of the main reasons why Neo suddenly rose in price was due to the press hype after rebranding from Antshares. It attracted more investors pushing its demand high and consequently its price.
- The other reason was its attractive features and its association with Ethereum. The notion that it had better features than Ethereum, made it very popular.
- Another reason was the support it received from Korea CoinNest around August 2017 after China banned all ICOs and exchanges in mainland China. Korea is among the leading nations in the cryptocurrency trading.
Forecast for NEO
NEO has a promising future if especially the Chinese government lifts its ban on cryptocurrencies and ICOs. China is a very large market and remains largely untapped. Considering that the Chinese people use homemade products, this coin is going to have a promising future as the platform of choice in China, and will definitely spread to other regions in the world. It also offers special features that solve some of the problems inherent in Ethereum. Some of these features are:
- Amazing features such as the dBFT that allows faster transactions.
- The digitation of physical assets on the NEO blockchain.
- It will have dignified certificates and identities.
- Seeks to comply with government regulatory measures.
- Allows the use of mainstream programming languages hence will give organizations an easy time adopting into its blockchain.
Can NEO be mined?
You must be thinking that, like many other digital currencies, you can use GPUs and specialized hardware to mine NEO. Well! Mining NEO is not an option. It is not possible. All 100 million coins were pre-mined during the development phase. Those of you who wonder, if you can mine NEO or not, the answer is not really. This answer may seem confusing but here is the thing – the distribution process of NEO is taking place through the Proof of Stake aka PoS protocol. This means that the consensus is distributed. Instead of mining NEO, you can stake NEO coins and get rewarded with GAS. Besides the cryptocurrency NEO, the NEO network has another token, which is known as GAS. A lot of people are attracted to GAS, as it can bring nice returns if one stakes it in an NEO wallet.
In contrast to the other PoS cryptocurrencies, this one will not require its users to keep the staking wallets open throughout the process. According to the user experiences (who have staked NEO in the wallets) they have received their GAS rewards and those were able to be claimed every other 5 minutes. In other words, NEO mining is not quite similar to Bitcoin mining, however, if you are interested in it you can get some nice profits by staking it. The main difference between the mining processes of those two cryptocurrencies is that Bitcoin is using the Proof of Work aka PoW protocol, meanwhile, NEO is using PoS, which many people consider a more efficient method.
Can NEO Crash?
NEO often receive a lot of praise for enabling developers to build decentralized applications easier than they would on the Ethereum network. Of late, however, the China-based network is receiving lots of criticism and some people think it’s an imminent disaster. So, can NEO crash?
NEO may crash if the regular slow-downs experienced every time they host an ICO continue. The company’s blockchain slows down from time to time, and this may prove a problem for them in the near future. At one time, the blockchain crashed because of a technicality issue. Another issue with the network is the high costs to obtain smart contracts. Experts estimate it costs upwards of $15,000 to obtain a smart contract, which is far too high to make it outshine ethereum. Lastly, if NEO issues are not addressed and if its ICOs don’t add any positive impact in the industry, we may witness an NEO collapse in the near future.
How to buy NEO?
It’s important that we look at these exchanges to determine which one is the best in terms of security and fees to be paid. Ultimately, you want a balance of secure transactions and low fees. However, please be aware that you need other cryptocurrencies such as BTC to buy NEO as you cannot buy it with fiat money.
Bitfinex is one of the largest and the most advanced digital currency trading exchange based in Taiwan. It supports major cryptocurrencies like Bitcoin and Ethereum. It allows traders to put up trades with up to 3.3X leverage. It has two-factor authentication and a universal 2nd factor for maximum security. Please note that this platform was once hacked in 2016 and lost $72 million worth of bitcoin.
Binance is a platform has the highest volume of NEO, gives a record of GAS generated and is free to withdraw. You first fund it with BTC from an exchange site like CEX.io, then proceed to buy NEO. This is an upcoming exchange platform based in Tokyo Japan. You’ll have a basic and advanced trading options with the advanced giving you more details and technical analysis. Binance has very low fees and a good customer support.
HitBTC exchange is a United Kingdom-based exchange platform that supports USD, GBP, and EUR. It also supports multiple cryptocurrencies. It has the two-factor verification and a superb track record. Trading fees depend on the nature of the trade. Trades executed immediately incur a fee of 0.1%. Deposit fee s are 9 USD for wire transfers and 5 GBP for bank transfers within the UK. It is the same case with withdrawal fees. Euro deposits are free while withdrawals are 0.9 Euros.
Just like other exchanges, Cryptopia deals with multiple digital currencies and also has an online shop. It supports more than 600 altcoins. This company is based in New Zealand. The good aspect of this platform is that it offers more than just trading. It also offers a marketplace with interesting commodities. Trading is usually done against USDT, NZDT, LTC, Bitcoin, and DOGE.
This platform charges 0.20% of the volume of any trade. A point to note is that it does not support margin trading. Its support of altcoins, however, covers this disadvantage.
Bittrex was founded by Bill Shihara, Richie Lai, Rami Kawach and Ryan Hentz. It supports more than 190 cryptocurrencies. It is based in the USA and is fully regulated. Provides stable wallets and its transactions are superfast. Please note that you will pay a fee of 0.025 units of any quantity you’re buying to transfer you NEO coins to your NEO wallet.
NEO uses an improved version of PoS protocol called dBFT. In this system, NEO holders vote for delegates called bookkeepers that run the network for everyone else making the system elaborate and efficient. Transactions are carried out at a higher rate since validating of transactions becomes easier when only the bookkeepers do the validation.
The token that runs the NEO network is called GAS. NEO should not be transacted with, so GAS takes up that role. It is used for all transactions including making any type of payments. You can claim GAS tokens by simply holding NEO in your personal NEO wallet.
What is staking?
Mining Bitcoins and many other altcoins require that a miner solve a complex mathematical problem that has to be confirmed by a network of peers. This system is called Proof of Work, whereby if all the peers in a given network come to a consensus, then the miners’ block gets added into the blockchain. Staking seeks to eliminate the need for solving the mathematical problems that require specialized hardware and excessive energy consumption.
It also avoids the tragedy of commons scenario in which a miner or mining pool manages to acquire a 51% computational power and creates illegal blocks while invalidating legal ones. In PoS, one would need to have 51% of the coins to manage such an attack.
Difference between PoW and PoS
- With PoW or Proof of Work, computers within a particular network compete to solve complex cryptographic problems to get the right to confirm transactions to be added on a blockchain. With PoS or Proof of Stake, utilizes token holders.
- PoW requires special computer hardware that consumes a lot of energy. PoS does not require any special hardware neither does it consume energy. It gives the miner with the highest proportion of coins a higher mining power.
You cannot mine NEO, but you can get GAS from holding NEO in your NEO wallet. This is one feature that sets this coin apart from the rest. So, how do you acquire NEO?
You can buy NEO coin at various exchanges available online. Here is a simple process on how to buy.Get an NEO wallet from the network’s website. (Get either for mobile or for desktop)
GUI desktop wallet is available for Windows only.
- There is a NEON wallet, though that is available for Mac, Linux as well as Windows.
- You can also get an NEO Tracker wallet from NEO tracker. It allows you to get GAS tokens as long as you hold NEO coins. Others include;
- NEO Wallet (web)
- NEONWallet (web)
- Official Neo Wallet (mobile)
- NEO paper wallet-this is good for storing your coins offline where it is secure from hacking
Now find a suitable exchange. You can select from these main exchanges.
The next step is to buy bitcoins or any other digital currency accepted in the exchange you have selected then exchange them for NEO coins.
Finally, move the coins to your preferred wallet and withdraw any remaining funds from the exchange platform.
NEO coin is the coin of the future. The idea behind this platform is revolutionary. It brings to light the issue of how physical assets would be traded in a digital manner. It also kills the myth of fraud and illegal transactions by requiring users to have digital identities and by complying with government regulation. While it goes against the idea of anonymity and decentralization to some extent, it opens up the blockchain technology to mainstream traditional market which will make it more efficient, safe and secure than ever before.
This development is just the beginning of more cryptos coming up to identify and solve any flaws. The blockchain is indeed the future.
Thanks for going through this guide about NEO coin. There is much more to learn about this wonderful idea. Continue reading our publications for more exciting and informative information. We promise to always keep you in the know!