What Is NEO? Introduction To NEO \/ GASMarch 20, 2018
What is NEO? It has been dubbed the “Chinese Ethereum,” and this description goes a long way to illustrate what it does: provides a native Chinese platform for tokens and decentralized applications, similar to Ethereum but with important technical differences.
NEO exists to bring the blockchain to Chinese developers, businesses, financial institutions, and even the government. Its tokens and decentralized applications can do anything the Ethereum network is capable of doing, with decentralized applications able to be programmed in several programming languages.
Moreover, NEO is not a mined currency — there were 100 million issued at the beginning and that is all there will ever be — so there is never a wait for blocks. It’s important to note that 50 million of these NEO were held back by the NEO Foundation in order to administer development. More on this here.
There are no transaction fees on the NEO network, although there could potentially be in the future. However, GAS tokens are used to power smart contracts, and the fees are paid to NEO holders. A lack of transaction fees is intended to keep the network growing, which benefits all NEO holders. The more assets registered on the NEO blockchain, the more gas that NEO holders are rewarded with.
The price per NEO began at less than $0.60 cents, but since then it has seen highs of as much as $150.00. Demand for NEO, like Ether, especially increases when token sales on the platform are active.
While many tokens are built on a “Proof of Work” or “Proof of Stake” foundation which enables their blockchains to agree on transactions and histories, the NEO token is a little different. It uses a niftily-titled consensus mechanism called “delegated Byzantine fault tolerance” which, it is believed, may enable NEO to scale more efficiently than other consensus proofs, and protect better against bad actors.
NEO was previously branded “Antshares,” but it has seen the vast majority of its interest and economic growth during the period since its rebranding.
An important concept to grasp when understanding NEO is the “Smart Economy”, which is a cornerstone of the token’s offer. Essentially, when we refer to the “NEO Smart Economy,” we are referring to an economic model where contracts are written in code and executed automatically as opposed to agreements made and enforced by humans.
This technology can be used in any transaction currently conducted by a bank or other legacy institution. By conducting business on the NEO blockchain, transactions can be given a degree of transparency as well as the security of a consensus-driven network.
Trust is removed from the equation in smart economics — there is no need to trust that the other party will act in good faith, as the contract will simply not function if any effort is made to not act in good faith.
As a result, business can be conducted more fairly, and problems generated by cultural and language barriers can be eliminated in code.
Perhaps just as importantly, the implementation of the Smart Economy – in NEO and elsewhere – introduces a new level of efficiency which can reduce costs, the savings of which will inevitably be passed onto end users of financial products.
In the NEO Smart Economy, all real assets can be digitized through decentralized applications. Institutions as varied as stock exchanges and rental agencies can find utility in a blockchain if it is inexpensive enough to use. Having low or no transaction fees as well as a fast network makes NEO an attractive platform.
What is GAS In The NEO Equation?
Along with the base token of NEO, GAS was launched with an identical maximum supply. GAS incentivizes people to hold NEO in that it slowly accrues in the account of every NEO holder over time, based on how many NEO they hold. There are calculators that give you an idea of how much GAS you can expect to earn. GAS will reach its 100 million mark in roughly 2039.
Aside from a financial incentive to hold NEO, GAS works in the same way that Ether does on the Ethereum network — it’s a requirement for launching smart contracts or other forms of decentralized applications on the network. While NEO can only be divided into integers like 1, 2, 5 and so on (unlike the dollar, Bitcoin, or most cryptocurrencies, which can have many decimals), GAS and other tokens can be subdivided the same way that other tokens can be.
Because of the utility of GAS, some believe it may eventually be worth more than the NEO token itself. Historically its price has charted at about 1/3rd of that of NEO, but one can expect this to change, especially when GAS dividends run out and the only way to acquire it is through exchanges.
Other NEO Tokens
Red-Pulse was the first Initial Coin Offering conducted on the NEO blockchain. Red-Pulse is a company which does market research in China for westerners. They were already providing subscription-based services prior to their ICO. The purpose of the Red-Pulse (RPX) token is to incentivize research and honest reporting about China.
Since then, major projects such as Ontology, DeepBrain Chain, Qlink and Trinity have all used the platform for significant raises.
As more and more tokens are registered on the NEO blockchain, it’s reasonable to expect a thriving token economy on the NEO blockchain just as is seen today in Ethereum, each with its own unique purpose and anchoring economy.
- NEO is the first blockchain platform within the Chinese economy with similar functionality to Ethereum, but without mining or proof-of-stake.
- NEO has a market capitalization of over $4 billion (March 19th 2018), with daily volumes exceeding $100 million.
- Half of all NEO ever generated were kept with the NEO foundation and are sold occasionally to fund development and infrastructure.
- The Foundation actively develops NEO: ongoing improvements are an important feature for modern cryptocurrencies.
- NEO lacks transaction fees but the GAS token is a requirement for executing smart contracts on the NEO blockchain.
- Several tokens have been issued on the NEO blockchain.
- While there are billions of dollars wrapped up in the NEO blockchain, NEO’s purpose is not to disrupt the Chinese RMB or any fiat currency, but instead help bring the Chinese economy into the blockchain era.
Source: Read Full Article