What is NEO?

What Is NEO?

What Is NEO?

Are you a fan of cryptocurrencies? Have you ever heard about NEO? Well, you’re at the right place to learn all about it. In this article, we summarize all basic information about it, so that you don’t need to look around and waste your time. We will tell you something about the origins of this cryptocurrency, basic info about its main characteristic and discuss the way it works. Also, we’ll analyze the most common terms related to this topic, like NEO coin, wallet, GAS, contracts etc. Read this short article with the most important information and stay in touch with the latest technology.

How was it developed?

NEO is a blockchain community which was founded in China in 2014. It was originally called AntShares (ANS), but in 2017 they went through a complete rebranding and changed their name. Under its current name, the community has joined the family of cryptocurrencies and quickly became known as ‘Ethereum of China’. It is the first blockchain platform in this huge country, developed as an answer to government regulation. The founder’s intention was to improve digital transactions and to start an era of Smart Economy, which means introducing digital assets, digital identity, and smart contracts. And how are they looking to do that? We’ll show you that next.

How does it work?

NEO requires registration, and registered users are able to trade coins with other users. That’s simple enough to grasp. However, the main characteristic of NEO technology is that all assets of registered users are protected by law, thanks to a special type of smart contracts called NeoContracts. Users have their own digital identity, which enables transparency during digital transactions. E-contracts, or NEO contracts, have a list of transfers of digital assets. Digital tokens are generated by every e-contract and function as fundamental data that can be used to record interest and credit arrangements, financial contracts, credit bonus account and currency. This can also be used for crowdfunding, trading shares, stock options of employees, peer-to-peer transmission, loyalty programs, private funds, supply chain, etc.

Also, it allows receivers not to accept transaction if they don’t want to. It provides users with full control over their transactions and their wallets. That principle is similar to today’s bank transactions: if somebody wants to give you some tokens, they can do so without an approval, but if you have some responsibilities with it, you can easily reject the transaction. In other words, it protects the user and their asset, which is a big deal for users’ security. The current problem with NEO contracts is the high price. Issuing a smart object on the platform costs 500 GAS (approximately 18,000 dollars).

NEO Home Page

NEO Home Page

What does NEO include?

NEO includes Delegated Byzantine Fault Tolerance (DBFT) – an algorithm which provides consensus mechanism, NeoX – which execute operations, NEOContract – creates smart contracts, NeoFS – a service that allows for decentralized storage, and NeoQ – a cryptographic mechanism.

What is important to mention is that you will be dealing with two different tokens here, NEO, and GAS. The NEO token acts as the investment token of the NEO blockchain. It has a hard cap total of 100 million tokens. These tokens will be used in block creation, network management, network changes, and other consensus requirements. These 100 million tokens were all pre-mined during the genesis block creation. NEO is unique compared to other cryptocurrencies because of the fact that it is not divisible. This means that the smallest unit is always one. The GAS token also has a 100 million hard cap, but it acts as the fuel for the proprietary blockchain. GAS has a division factor of 1/10^8 and doesn’t have any pre-mined coins. 100 million GAS tokens will ultimately be in existance through a decay algorithm in about 22 years.

NEO Token Distribution

NEO Token Distribution

Where to buy and store NEO coin?

NEO coin is possible to store in your wallet, but here there are several options, depending on what you want to use. For example, Ledger Nano S does the job splendidly, but you can also use NEON Wallet, NEO GUI, NEO CLI, NEO Tracker, NEO Wallet (.cn), NEO Wallet (.net), Ansy. More than enough to choose what you need and to cover the current needs of users. Of course, we expect the offer to only grow from this point on.

As for acquiring this coin, you can buy coins on many different exchanges like Binance, Bitfinex and several other major websites. Coins can be bought with real money, with a credit card, but you can also buy it with other cryptocurrencies such as Bitcoin, Etherum, etc. At the moment of writing this article, the coin price is about 42 $, but it has dropped significantly since, so it may be a good time to buy.

NEO Exchanges

NEO Exchanges

Are there any potential problems?

When it comes to the financing, NEO put their ‘pre-made’ money in crowdfunding events, so they practically sold the money made from data mining. That opened a lot of discussions, because of the centralization of the coin distribution. The moral of such manner of business is also questionable.

The next problem is the centralization since it turned out that it is quite easy to affect the whole network. The whole idea of cryptocurrency is decentralization of power. In October 2017, it was completely shut down for a few hours, and the official announcement was that they had to shut down blockchain to perform the manual test as they tried to release 15 million new tokens. If you are familiar with the philosophy of the blockchain community, then you realize the concern because of the fact that the team behind this coin can shut down blockchain at any time. That moment shows the great risk of centralization of the cryptocurrency.

NEO Online Wallets

NEO Online Wallets

Conclusion

Is this the future? Can NEO wallets replace regular wallets? Will the coin price go up or down in a next few months? Could the smart economy become the regular way of doing business? Can this cryptocurrency become a standard currency? There is no right answer to all those questions. But one thing is certain, NEO has adapted splendidly to today’s circumstances, so we should be impatient to see what will happen. If they can overcome all challenges mentioned above, they could achieve greatness. Keep following our website to see how everything turns out.

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Author: Ben Prescott
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