NEO Platform Offers “Smart Economy” On The Blockchain

NEO Cryptocurrency Platform Basics

NEO has become the 6th largest cryptocurrency platform, with a market capitalization of over $9.1 billion at the time of this writing (CoinMarketCap). Its price has gone up significantly from around 80$, at the beginning of this month, to the current price of approximately 140$. Although the crypto-market’s prices fluctuate wildly, and NEO’s market cap is no exception to that, it still doesn’t take away the fact that it is generally recognized as a major crypto-platform. So, what are the factor(s) that could have contributed to its popularity? Before addressing this, let’s first go over the basics of this platform, which is often referred to as one of “Ethereum killers” by its proponents.

Developers of the NEO network claim that it functions as a next-generation “Smart Economy” platform. Moreover, a “Smart Economy” is created, according to NEO’s development team, through the use of Digital Assets, Digital Identity, and Smart Contracts. These features are implemented using the “Delegated Byzantine Fault Tolerance – dBFT” consensus protocol. Like many other crypto-platforms claim, NEO’s architects consider it to be an advanced version of the “Proof of Stake” algorithm.

Delegated Byzantine Fault Tolerance Algorithm

When dBFT is used, thousands of nodes (network participants/entities) are reportedly able to reach consensus within seconds, without using much energy. Per NEO’s creators, it can handle 1000 transactions per second (TPS), and the goal is to eventually be able to process 10k TPS. This seems to be a significant improvement compared to BTC and ETH transactions, which only average around 3-4 and 15 TPS, respectively. Furthermore,  its architects also chose to use coding languages for its Smart Contracts that the majority of programmers are familiar with. These languages include C#, Java, JavaScript, and Python.

Development Of NEO Made More Accessible To Programmers

Since NEO’s source code, is written in common coding languages, it is much easier for developers to program dApps (distributed applications) on NEO’s blockchain. To further advance its development efforts and encourage more people to adopt its technology, NEO rebranded itself from “Ant shares” in mid-2017. Throughout this time, it has often been called “China’s Ethereum”, and was originally launched by Hongfei DA , in 2014. Hongfei is considered, by many, to be one of the prominent pioneers of China’s crypto-community.

The NEO founder happens to be the CEO and co-founder of Onchain as well, a Shanghai-based blockchain R&D company. Hongfei’s main partner is OnChain CTO Erik Zhang, one of NEO’s core developers. Together, they first started developing Antshares in 2014. It is necessary to mention OnChain while explaining what NEO is, because both entities are being worked on in China’s crypto-community, so their separate development efforts could impact one another, or even overlap.

To make things clear, OnChain is a for-profit organization, and doesn’t have ownership rights to the NEO platform itself. In fact, NEO is among one of many community crypto-projects. Moreover, even though they have some similarities as far as their origin, they’re both separate entities, legally and conceptually, while also focusing on different missions. Additionally, NEO is an open-source project, dedicated to the development of smart contracts. Meanwhile, OnChain is an independent company developing a product called DNA (Distributed Network Architecture), a technology that allows users to create various assets that are issued and traded through its own smart contracts.

Pertinent Details About The NEO Platform

As mentioned, NEO is a “Smart Contract” system like Ethereum, but it integrates Digital Identity and Digital assets to make it a “Smart Economy”. This helps NEO compete with other established blockchains like NEM’s Mijin blockchain, which also uses C++. What makes NEO’s implementation unique is that it uses what it calls designated bookkeepers, which are nominated and chosen through a voting system by NEO’s holders. Bookkeepers are tasked with validating the transactions on NEO’s blockchain. Therefore, each bookkeeper verifies the blocks on NEO’s ledger, and consensus is achieved if two-thirds of the nodes agree with the bookkeeper.

Smart contracts on NEO’s network are powered by two tokens, namely NEO and GAS. NEO is the native token used for network management, whereas GAS is the fuel token for powering NEO network. Unlike Ethereum, where the GAS is deducted as a small portion of Ether, GAS tokens in NEO are paid as dividends to NEO stakeholders. GAS itself is a fairly well-known cryptocurrency with a reasonable price and market cap. By Hoarding NEO, you will be earning GAS. Notably, Binance and Kucoin are two exchanges that are rewarding GAS to NEO holders.

NEO’s “Real Strength”

NEO’s real value and strength lie in working towards a regulatory compliant smart economy platform. That’s why its developers say it has overcome many challenges and continues to grow, despite Chinese regulators crackdown on virtual currencies. Another reason for its growth is often attributed to the ease of developing decentralized applications on top of NEO’s blockchain. Its support of all the standard programming languages, compared to Ethereum’s applications built only with its own Solidity language, could prove critical to its mainstream adoption.

Also, NEO holders are rewarded with GAS tokens as dividends as a form of recognition and appreciation for supporting the network and helping it grow in value. This could be another reason why NEO’s platform might further penetrate the cryptocurrency market. Furthermore, there have been considerable scalability issues with some of the major crypto-platforms such as Bitcoin and Ethereum, and NEO seems better equipped to scale. That’s because it uses what its  supporters consider to be not only a faster, but more efficient dBFT algorithm (compared to Proof of Work and Proof of Stake).

A few issues with NEO are that the NEO team holds most of the nodes. It might be better for if most of them are “liberated” in the future and become a truly decentralized platform for it to be accepted globally.

Please note that this article is not a comprehensive explanation of what the NEO platform actually does, and how it works. It is intended to increase awareness among crypto-enthusiasts, and inspire them to learn more about this platform, in addition to other crypto-platforms, in general.