NEO is an open-source smart economy platform. NEO uses blockchain technology and digital identity management tools to digitize assets and automate the management of those assets using smart contracts.
It is a very popular cryptocurrency platform that also carries a massive amount of hype. But what is NEO, and why should you care?
What is NEO?
NEO started life under a different name. Back in 2014, Da Hongfei and Erik Zhang founded Antshares, then China’s first public blockchain. Parent company, OnChain, changed the name to NEO in 2017. The rebrand was key to the relaunching of their vision for a smart economy.
Digital Assets + Digital Identity + Smart Contract = Smart Economy
NEO makes it easy to digitize existing assets to move them into the smart economy. Users can create digitized assets linked to a digital identity, while NEO offers various types of protection for both assets and identities.
The NEO Smart Economy
Three core components comprise the NEO vision of the smart economy: Digital Assets, Digital Identity, and Smart Contracts.
- Digital Assets. NEO’s infrastructure supports two forms of digital assets: global assets and contract assets. Global assets are made public and are accessible to all smart contracts and NEO clients whereas contract assets are private and only accessible by certain clients. The connection between a digital and physical asset is provided using a digital identity.
- Digital Identity. NEO’s digital identities are rooted in encryption, using Public Key Infrastructure to secure and maintain verified identities. The NEO identity verification can use facial features, fingerprints, and voice, as well as other multi-factor authentication methods.
- Smart Contract. The NeoContract smart contract system integrates digital assets and digital identities into the NEO ecosystem. NeoContracts use existing programming languages, such as C# and Java, rather than forcing developers to learn a new proprietary language.
The core of the NEO platform feeds into the wider NEO ecosystem. In turn, the NEO ecosystem features full decentralized nodes, a blockchain explorer, an SDK development kit, DApp development frameworks and toolkits, and much more.
NEO has a strong focus on regulatory compliance. The deep integration of digital identity in the NEO platform illustrates this. Without completing and verifying a digital identity, businesses and individual cannot develop on or issue smart contracts on the NEO platform. Furthermore, unlike most other crypto networks, each node in the NEO network must also provide a valid digital identity before joining the network.
Finally, NEO uses a Delegated Byzantine Fault Tolerance (dBFT) consensus algorithm. dBFT allows holders of NEO tokens to vote on the generation of new blocks for the NEO platform. Block producers on the NEO network are known as bookkeepers and voting takes place in real-time. NEO’s dBFT integrates NEO platform digital identities, too, meaning bookkeepers and block ownership is recorded using real names of users and organizations.
NEO Blockchain Technology
NEO has a bunch of other handy features, too.
For instance, the NeoX protocol allows cross-chain interoperability. This means if a blockchain isn’t compatible with NeoContract directly, they can still be compatible with NeoX through the cross-chains existing smart contract functionality. Adding to that, NeoX facilitates cross-chain distributed transactions, allowing users to scatter transactions across blockchains while maintaining the integrity of the smart contract.
NEO also features integrated distributed storage via its NeoFS protocol. NeoFS uses Distributed Hash Table technology to index data through the file content (a hash) rather than the file path (a URI). The storage of small files is free to almost free, depending on the file requirements and size.
Another important feature is NeoQS. NeoQS is the anti-quantum cryptography mechanism that will protect the platform against future quantum computing developments. A major fear for cryptographers and, ergo, cryptocurrency and blockchain platforms, is that quantum computing will easily crack existing encryption algorithms.
NeoQS (Quantum Safe) uses a lattice-based cryptographic mechanism. Lattice-based cryptography appears resistant to both existing and quantum computing attacks, with lattice-based problems difficult to solve efficiently. However, until the true advent of quantum computing, quantum safe cryptography is difficult to verify. That NEO actively attempts to protect against quantum computing is a positive for its users.
You can read more about NEO’s development and future vision in its whitepaper.
NEO and GAS Tokens
The NEO platform uses two tokens: NEO and GAS. Ownership of NEO gives users voting rights and network participation options. GAS is what fuels the network and is used to process smart contracts and other network transactions.
There is a maximum supply of 100,000,000 NEO tokens. At the time of writing, the circulating NEO supply is around 70 million tokens. NEO is pre-mined, meaning you can only purchase NEO or earn it through network participation.
Similarly, there is also a maximum supply of 100,000,000 GAS. However, the circulating supply of GAS stands at 13,935,116. That’s because just 8 GAS generates per NEO block. The GAS is distributed to all NEO holders, making the accumulation of GAS comparatively slow.
NEO Similarities with Ethereum
NEO and Ethereum often receive comparisons. They’re both DApp platforms that specialize in smart contract development. Furthermore, both platforms use blockchain virtual machines to execute smart contracts.
NEO has a few plus points over Ethereum. The Ethereum blockchain can process around 15 transactions per second, whereas NEO can process around 1,000 at the current time. It is thought that NEO can scale up to around 10,000 transactions per second, too. In fairness to Ethereum, the development team is set to launch a new Proof of Stake algorithm and is also investigating sharding, which should increase the number of transactions.
Another key difference is the use of multiple programming languages. The Ethereum blockchain uses Solidity exclusively. Solidity was developed for Ethereum, meaning it is blockchain specific which does come with some advantages. Conversely, NEO supports C++, C#, Go, Java, and other programming languages. The range of programming languages available lowers the bar of entry for NEO, potentially increasing adoption.
Ethereum is certainly the better-known platform. It has more users, more DApps, and the core currency is of a higher value. But don’t let that fool you. NEO implements some excellent blockchain technology and will continue to challenge Ethereum in the long term.
Where Can You Buy NEO?
At the time of writing, one NEO token costs $9.63, well down from the all-time high of $161.98 achieved in January 2018. NEO has a market capitalization of $678,996,056, ranking it the 18th largest cryptocurrency by market cap. Coincodex lists NEO for sale on 48 exchanges, with 125-coin pairings.
You can purchase NEO GAS outright, too. At the time of writing, one GAS is worth $1.64, down from its all-time high of $77.98. GAS is only available on a handful of exchanges.
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Disclaimer: This is not investment advice. Bitcoin and other cryptocurrencies are highly speculative. Nothing is guaranteed in cryptocurrency. Always perform your own research before investing and never commit more money than you are comfortable losing.
What Is NEO’s Future Potential?
NEO has bags of potential. Already considered a competitor to Ethereum, NEO has substantial financial backing, too. Parent company, OnChain, is backed by China’s largest private conglomerate, Fosun. Furthermore, OnChain is also responsible for Ontology, another crypto platform built on NEO. The combination of three organizations—NEO, OnChain, and Ontology—provides an enormous target market.
One important thing to note about NEO and OnChain is that they are not censorship or privacy-focused platforms. As above, verifiable digital identities are a core NEO feature. That NEO and OnChain focus on providing real-world identities likely gives it a positive light in the eyes of the Chinese government, helping it to exist within national regulations.
While some crypto users won’t agree with that approach, private cryptocurrency alternatives and platforms do exist. For others, the close ties to Chinese companies and the Chinese government make it seem NEO is certain to succeed.
Check out the Blocks Decoded Ontology coin study to learn more!
Join the NEO Community
If you want to know more about NEO, or simply want to stay informed of updates and developments, you can join the very active NEO community.
- Official NEO Twitter
- Official NEO Facebook
- Da HongFei Twitter
- Erik Zhang Twitter
- Official NEO site
- Official NEO Discord
- NEO subreddit
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