In this article, we will analyse and explain what is NEO, why it was created, and how it differentiates with other cryptocurrencies. At the moment, NEO is one of the most popular virtual currencies in the market and calls the attention of several investors. There are several reasons to think of NEO as one of the potentially-revolutionizing cryptos in the world.
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What is NEO?
NEO is considered to be ‘An Open Network For Smart Economy’. It is a non-profit community that uses blockchain technology and digital assets with the intention to manage those assets using smart contracts, and to realize a ‘smart economy,’ using distributed ledger technology (DLT).
At the same time, this network is known as the Chinese Ethereum for its different features, including smart contracts and the possibility to allow ICOs to run on its platform.
The community has been founded in 2014 and was real-time open source on GitHub in June 2015. They explain that NEO has experienced the upsurge of the blockchain industry and the digital market.
One of the basic points of NEO that you should remember is that it combines Digital Assets, Digital Identity, and Smart Contracts in order to create the so called Smart Economy.
Digital Assets are programmable assets that exist as electronic data. With DLT, users are able to register and exchange different kind of assets. With blockchain the digitization of data can be done in a decentralized, trustful, and traceable way. They can be deployed on top of the NEO network.
There are several companies and developers already working with this blockchain network. That’s not all. These companies are also developing a wide range of solutions, including digital identities.
The second point in which the NEO project is based is in digital identity. It refers to the identity information of individuals, organization, and other entities that exist in an electronic way. NEO implements a set of X.509 compatible digital identity standards. This is the most mature digital identity system based on the PKI (Public Key Infrastructure).
Digital identities can be deployed on top of this network. It allows firms and interested parties to provide information about individuals and firms in just a few simple steps. The interesting thing about it is related to the fact that it is compatible with international digital identity standards.
This is the latest feature that NEO uses for its project. The NeoContract smart contract system is the biggest feature of the seamless integration of the existing developer ecosystem. Users do not need to necessarily learn a new programming language, but instead, they can directly use C#, Java and many other programming languages available in the market.
This would definitely be a game-changing thing. Users will be able to run smart contracts on top of this network that will help them provide services and solutions to other individuals and companies.
NEO allows for different projects to create their own decentralized applications on top of its blockchain. There is an important number of project including Red Pulse, Qlink, Thekey, Ontology, and more.
All of them offer different functionalities and work in many different sectors of the economy. They have support from their very active communities and also investors. Most of them have been very successful companies that are fully operative and growing.
What is NEO Gas?
In a similar way to what Ethereum does, the gas in the NEO network is used to power transactions or contracts running on the blockchain. If a company or user decided to use the network (send a payment or run a smart contract) it will have to pay using Gas for these resources.
The gas that projects need to pay is related to the resources they use. If the intention is to send a very small transaction, the gas needed will be very small. But if the intention is to run a very heavy smart contract or process, then it will consume more Gas.
All NEO holders are rewarded with Gas tokens. This is an important way to generate a good income over time, if the tokens are not needed. In order to pay to Gas holders, NEO uses a specific formula. The bigger the number of NEO tokens that an individual hold, the bigger the reward.
NEO and the Cryptocurrency Market
At the moment, NEO is the 11th virtual currency according to its market capitalization, being worth $3.41 billion dollars. Each coin can be bought for $52 dollars according to CoinMarketCap. What else do we know about NEO’s price? Well the currency has been growing since it came out to the market. $50 dollars seems to be a strong support level. During market dips, it worked out as a good barrier for the price to fall even further.
In terms of BTC, it has also been growing during time, but less if compared with USD. At the moment each NEO coin has a price of 0.00685748 BTC.
What is the Delegated Byzantine Fault Tolerance?
The Delegated Byzantine Fault Tolerance (dBFT) is a consensus mechanism that the network implements. It is different from the so known Proof of Work (PoW) or Proof of Stake (PoS) that we find in most virtual currencies.
With this consensus mechanism blockchain nodes have a different arrangement. With this mechanism, the network is able to avoid the Byzantine General Problem, where components may fail and there is imperfect information on whether a component is failed. With the dBFT the network is able to achieve consensus even if malicious node would attempt to cause harm.
At the same time, there are professional node operators that are able to gain an extra income and users that want to explore different features on the ecosystem. By acknowledging these groups, it would be possible to create a secure network.
All the nodes are appointed through voting. And if there is a 66% agreement among the nodes on the information broadcasted by professional nodes, the consensus is achieved.
NEO has been founded by Da Hongfei and Erik Zhang, which have settled NEO’s vision and strategy for the future.
Da Hongfei is one of the most important experts in the crypto ecosystem, and more when it is related to China. He is working with NEO since 2014 when it was called Antshares and another company known as Onchain.
At the same time, it has an incredible team of experts related to blockchain technology, marketing, and software development.
NEO is China’s first ever open source blockchain network. The intention is to revolutionize how e-commerce is done, and that’s why it was able to create the smart economy. In the future, the network will be implementing different digital certificates, cross-chain interoperability, and P2P networking, so as to achieve its goals.