What is NEO: Everything You Need to Know About NEO Coins
NEO coins are a cryptocurrency utilizing blockchain technology to promote online smart contracts, and more digital exchange. It aims to surpass competitors like Ethereum by granting access to more programming languages and more global businesses.
This article explains NEO’s role in the production of new, more secure Dapps, the creation of subsidiary Coins like GAS tokens, and where it can be bought or used for those interested in this particular cryptocurrency.
At a glance
|Industry||Blockchain / Infrastructure|
|Hash Type||SHA256 and RIPEMD160|
|Total coin supply||100,000,000|
What Is NEO
NEO is a Chinese based blockchain platform designed to allow decentralized applications to scale up and down. NEO defines itself as “a distributed network for the smart economy.”
It’s intended to allow creators to make smart contract applications which will be secured by the NEO blockchain. This smart contracts ecosystem is very similar to Ethereum. NEO coins produce GAS tokens, which are used to pay for transaction fees generated by applications on the NEO network. GAS can be thought of as the “fuel” that runs the network.
The creators of NEO intend for their network to act as a public cloud, providing blockchain security to applications and third-party software developed on it. Their intention is for others to have access to the platform, and the tools to create applications for the platform, to create a thriving business system with NEO providing the underlying foundation.
The coin was first developed by a company known as Onchain, under the tentative name of Antshares with the ticker ANS. But he name was later changed to NEO. It is now managed by NEO, a Chinese based company.
As of writing this post, the market cap for NEO is $2,373,553,500 as of this writing. It started at $6.7 million at its public release in October 2016. Each coin was valued around $.10. As of its highest point, NEO coins were valued at more than $50 per coin!
The total supply of NEO coins is 100,000,000, with 65,000,000 coins in current circulation. NEO coins were pre-mined during the genesis stage, and are non-divisible, meaning the smallest value any coin will ever hold is one.
NEO is currently traded on exchanges such as CoinEgg and Binance. It is extremely popular in Chinese markets and has been mention as an Asian alternative to Ethereum.
Gas tokens can also be traded on several larger exchanges such as Binance, OKex and Huobi.
Who Created It
NEO was created by founder Da Hongfei and his company Onchain. Other people involved in its creation were Co-Founder and Core Developer, Zhang Zhengwen, and Secretary General Tao Rongqi. They intended to create a Distributed Network Architecture, capable of providing blockchain services to more types of online business than previously possible.
It is the first Chinese based open source cryptocurrency. The company switched from the original name of Antshares to NEO in 2017. At its inception, the company created 100 million coins, which will remain fixed. The GAS tokens produced by NEO coins increase at a deflating rate over time, intended to generate 100 million as well from its time of conception onward.
23% of the tokens were given to investors during the ICO. NEO also received funding for its development from Onchain. Unfortunately, as a Chinese based company, NEO was affected by the nation’s ban on ICOs, which has yet to be lifted.
What Does NEO Do?
NEO coins act as a Proof of Stake to allow access to the NEO network, and in turn, produce GAS tokens. NEO coins act as a form of identification and the GAS tokens produced allow you to verify transactions or form smart contracts using this online ID. Creating Dapps or programs for the platform is impossible without a NEO coin to allow access.
NEO is unique in that it is a key, allowing a holder to utilize the tools of NEO, but it also produces GAS as a subsidiary token at roughly 8 GAS Tokens per block in each blockchain. The intention is to form a platform that applications can operate on while providing a layer of security, impossible to bypass by anyone not in possession of a NEO coin.
How Does NEO Work?
NEO says that a smart economy should consist of:
- Digital Assets – NEO has two asset types, global and contracts.
- Digital Identity – The identifying information of individuals, companies and other entities that exist in electronic form.
- Smart Contracts – Automated contracts that are coded with specific instructions to self-execute when certain conditions are met.
Neo Consensus Protocol
NEO uses a dBFT (Delegated Byzantine Fault Tolerance) security system to look for consensus when operating. They chose dBFT due to its scalability and its potential to reach 10,000 transactions per second, allowing support of large-scale applications.
A delegate, or book-keeping node, is selected at random to create the block.
The other book-keeping nodes then attempt to reach consensus and add that block to the chain. When a two-thirds majority agrees with the original blockchain, a transaction is verified. If majority cannot be reached, the whole process starts over.
NeoContract – Smart Contracts 2.0
NEO’s primary goals has always been to replicate the functions on a virtual machine as well support multiple programming languages. Currently, the languages supported are:
- C#, VB.NET, F#
- Java, Kotlin
- Future release – C, C++, Golang
NEO’s smart contract system is being developed to achieve this purpose. The system is made up of 3 main elements: NeoVM, InteropService and DevPack.
According to NEO’s website, NeoVM is where the smart contract code is executed. It contains three elements: execution engine, stacks and iterop services. These can be seen in the diagram below:
The NeoVM is basically just a lightweight virtual machine that handles logic operations, executes instructions in the contract, etc. Its architecture is very close to the JVM and .NET. It can also be ported to non-blockchain systems.
This is used to load the blockchain ledger, digital assets, digital identity, NeoFS and other underlying services, while also providing a storage area for smart contracts. NEO calls them “virtual machines that are provided for virtual machines.
It allows contracts to access data outside of the NeoVM. Currently, this service layer provides some APIs for accessing chain-chain data including:
- Block information
- Transaction information
- Contract information
- Asset information
Devpack consists of the high-level language compiler and IDE plug-in allowing developers to use multiple languages to code smart contracts, a distinct advantage over systems like Ethereum.
Future features of NEO include:
- NeoX – Allowing for cross-chain interoperability
- NeoFS – A method of disctributed data storage using hash table technology. NeoFS will enable smart contracts to store large files on the blockchain and set access to those files.
- NeoQS – A safeguard against quantum computing and the threat it poses to cryptographic systems based on RSA and ECC.
Who Uses NEO
NEO is specifically designed to enable more online business. To this point, it is aimed at enterprises and companies that require smart contracts for extra network security. Because it understands multiple coding languages, it is more accessible to people with moderate technological know-how, as well as crypto users without advanced cryptocurrency knowledge.
As mentioned earlier, China leads the world in NEO usage. The development of NEO is supported by the Chinese government, and therefore, NEO’s primary users are mostly Chinese.
Usage vs. Speculation
Unlike many crypto coins in the market today, NEO is already in use. Dapps such as Chainline, NEORaffle, and AdEx already make use of the system.
- Chainline is a peer to peer delivery and transport system, which allows users to earn courier fees.
- NEORaffle acts as a blockchain lottery accessible to those on the network.
- AdEx uses NEO coin to create a targeted-ad system, with the security of the NEO coin network.
NEO biggest competitor is Ethereum. Although it is newer, NEO provides an advantage over Ethereum by being Turing complete. It also allows the use of multiple programming languages. Ethereum uses its own programming language, which is a drawback, but has existed longer and has held a place as the consistent number two cryptocurrency on the market.
EOS coin is another large competitor in the infrastructure space. The mission of EOS is to build a giant decentralized operating system using blockchain technology.
Traditional competition for NEO lie in physical currencies like the US dollar or Chinese yuan. It is also meant as a form of contract to ensure deals are made and honored to the letter, regardless of good faith. This means it is a new contract-based form of security acting as a competitor with all modern forms of physical trade and business.
Some of the advantages of NEO include:
- As fiat, NEO coins have no intrinsic value at first. However, as they are used in the formation of smart contracts, they make online contracts more reliable than traditional ones.
- The ability to create Dapps using multiple programming languages makes it more powerful across cultural boundaries than other cryptocurrencies or competitors.
- There are no splits when attempting to reach consensus, which removes stutter and lag time in transactions.
- It is the first cryptocurrency to have been verified as Turing complete.
- How different is Ethereum from NEO? As mentioned earlier, NEO supports multiple programming languages which lowers the barrier of entry for many developers. NEO also uses a different consensus mechanism which theoretically fixes the scaling issues Ethereum has experienced.
- Can I buy NEO coins with physical currency? NEO is difficult to purchase directly and is actually easier to acquire by purchasing and trading other cryptocurrency coins for them.
- Can I buy GAS tokens directly? GAS tokens are produced through the transactions completed on the NEO network. They are generated through NEO coins and rewarded to holders of NEO coins for participating in blockchain production and transaction verification. However, GAS tokens can be acquired on crypto exchanges such as Binance.
- Is NEO regulated by a government? China has previously issued a statement refusing to acknowledge Bitcoin or other cryptocurrencies as viable forms of money in the marketplace. However, NEO has been recognized by the Chinese government, which some argue could lead to more intense regulation of NEO in China.
- Does NEO have any essential partnerships or affiliations? NEO coin has a sister company, Onchain, and has already partnered with several cryptocurrency companies for additional technical support, including Bancor, Agrello, and Coindash. They’ve also partnered with Alibaba, which is possibly the world’s largest eCommerce company.
The Future of NEO
As proof that it is one of the leaders in the crypto space, NEO has become the platform of choice for various cryptocurrencies attempting their first ICOs. Narrative, a social media network, as well as workforce recruitment platform Moonlight, are both ICOs intending to make use of NEO this year, as of this writing. Neon Exchange, a trading service, is another ICO intending to use NEO to its advantage.
NEO’s roadmap is filled with exciting new goals and they have a very active developer base. Below are a just a few of their future plans:
- By the end of 2018, NEO has already announced their intention to move to a new Proof of Consensus algorithm, as well as the intention to include sharding.
- They have also issued a statement detailing their intention to address bottlenecking. Their current system can cause lag for new ICOs, and the coin doesn’t allow for new NEO coins to be produced.
- Over time, NEO ultimately aims to become a platform of choice for other ICOs, with future sources of cryptocurrency or smart contracts relying on it for security.
- Due to the tentative business relationship, NEO has with the Chinese government, it is possible they will seek to meet further regulations in their native country and may change as part of a new government friendly partnership. For the time being, however, they are publicly approaching possible working relationships with the Japanese Ministry of Economics, Trade and Industry, among others. This may see NEO move its base of operations from China to more cryptocurrency friendly waters shortly.
How to Get NEO
Because cryptocurrencies generally have very unique ways of being obtained, it’s important to understand the different ways someone can earn or buy these coins.
How to buy NEO
Buying NEO coins with traditional fiat currency like US Dollars is difficult. Instead, users must purchase other coins such as Bitcoin and convert it to NEO.
List below are several exchange from which you can get NEO coins:
No exchanges found
How to mine NEO
Because all NEO coins were pre-mined, you cannot mine them. Instead, the only mining related to NEO comes from verifying transactions with your NEO coins, which rewards you with GAS tokens instead.
GAS mining is done as a natural part of the approval of block creation, so using a NEO coin to participate in blockchain verification is the only method available.
How to store NEO
- If you want to use a hardware wallet, then Ledger Nano S is a great wallet to store your NEO coin. It has additional applications that allow you to redeem and store your GAS tokens produced by your NEO coins as well.
- NEON Wallet is a desktop wallet that allows you to send and receive NEO coins. It also provides the same service to GAS tokens, and you have the additional benefit of knowing no passwords or keys are stored on NEON servers, as security remains in your hands.
- We mentioned that Binance is a recommended way to buy other cryptocurrencies and convert them to NEO. Exchanges, while riskier, can act as wallets, allowing users to trade and manage their NEO coins with ease. Binance also distributes GAS tokens to those holding NEO every month, which no other wallet currently does.
NEO has fast become one of the most talked about and popular cryptocurrencies today. It is already the most favored cryptocurrency in China, and a competitor to Ethereum. It is backed by the Chinese government and some very large companies like Alibaba, greatly increasing their odds of success.
Is it the “Ethereum killer” as many have called it? Maybe in China, but not the world. But there is no reason it can’t operate side by side with some of the other larger blockchain networks, especially if they focus on the Asian market exclusively.