New, Young and Needed: NEO
It is only once in a blue moon that one single cryptocurrency get’s the attention of leading media channels having worldwide reach – so when that happens, you know that this currency is here to stay. NEO has quickly started receiving the attention it deserved 5 days ago.
Bitcoin came into the picture just as investors were losing faith in fiat currencies and turned the tables around. The blockchain based skyrocketing tail immediately hoarded hundreds of followers owing to a network which was called “unhackable, entirely liquid and infallible.” With progress of time and advancement of technology, the gaps in Bitcoin grew further apart and Ethereum a Digital currency that has diverse applications and works on a simple proof-of-work algorithm was quick to take to the fame and fill in those gaps. On top of that Ethereum was known for being able to make smart contracts that use the system as a middleman-free, enforceable platform for trade.
But this “greater” expansion of the coin-technology has once again taken us one step further into the future with the revamping of AntShares into NEO, which is being called the “Ethereum of China.”
What is NEO?
NEO – a centralized decentralized cryptocurrency describes itself as the clever amalgamation of blockchain technology and digital identity with an aim to digitize assets. The use of smart contracts for digital assets would be self-managed, in order to achieve “smart economy” with a distributed network.
NEO is not the newest cryptocurrency in town, in fact it has been here for quite some time – 2014 to be precise. Back then it was known as AntShares. The name change occurred in the Beijing headquarters of Microsoft and since then this “Ethereum of China” is up from $2 to $50 in the last couple of months. In fact it rose by a value of approximately 400% in the last week alone and rocketed into the top five of coin market caps, blowing past the veteran Litecoin. As matter of fact, August has been an incredible month for NEO. Just last week, NEO became the 10th cryptocurrency to attain a $1 billion market cap. Since then, its value has more than doubled to $2.3 billion.
NEO uses a unique blockchain algorithm that improves upon Ethereum’s model. While the basics still apply – it also supports decentralized commerce, identification and digitization of several assets. NEO also closes loopholes that have caused some Ether contracts to be vulnerable to hackers.
The brains behind the Idea, and the Idea itself
With Da Hongfei as their founder, the NEO team is one of the most professional in their mannerisms and conduction. In a crypto-society which is increasingly focusing on new ICOs (Initial Coin Offerings) and have teams that expound upon the pre-sale of the coin and its potential value, NEO has chosen to take a completely opposite path. In their new strategy, Da’s team is relentlessly accessible to the public, they speak on the technology’s real-world applications and try to keep the masses as involved as possible.
Before we move ahead, these are a few NEO-terms that were explained in the whitepaper, that you should know:
“Digital identity refers to the identity information of individuals, organizations, and other entities that exist in electronic form. NEO plans to implement a set of X.509 compatible digital identity standards. This set of digital identity standards will also support Web Of Trust point-to-point certificate issuance model. NEO includes the use of facial features, fingerprint, voice, SMS and other multi-factor authentication methods.”
“The NEO blockchain allows its users to register, trade, and circulate multiple types of assets. NEO basically has two forms of digital assets: global assets and contract assets; Global assets can be recorded in the system space and can be identified by all smart contracts and clients and contract assets are recorded in the private storage area of the smart contract and require a compatible client to recognize them.”
“The NeoContract smart contract system is the biggest feature of the seamless integration of the existing developer ecosystem. Developers do not need to learn a new programming language but use C#, Java and other mainstream programming languages in their familiar IDE environments (Visual Studio, Eclipse, etc.) for smart contract development, debugging and compilation. NEO’s Universal Lightweight Virtual Machine, NeoVM, has the advantages of high certainty, high concurrency, and high scalability. The NeoContract smart contract system will allow millions of developers around the world to quickly carry out the development of smart contracts. NeoContract will have a separate white paper describing the implementation details.”
Now, you’ve probably heard of Proof of Work (PoW) and Proof of Stake (PoS) as consensus mechanisms employed by Bitcoin and Ethereum (going to be applied soon) respectively. NEO instead of using either of these, uses Delegated Byzantine Fault Tolerance alternative (dBFT) as it’s consensus mechanism which offers lower electricity costs and removes the possibility of a chain split which makes it useful for its goal of digitizing real-world financial assets.
What’s so different?
As an article on HackerNoon https://hackernoon.com/is-neo-the-one-67799886b78f puts it, NEO created a stable store of value by leveraging one that already exists (fiat) and bridged the old and new financial system in a single shot. Using fiat allows traditional financial powerhouses to use the revolutionary new technology of smart contracts, a technology that’s poised to change how we do business all across the world.
The NEO coin behaves like traditional security. It acts like shares in the company that runs the platform. Many of the NEO coins were sold in an earlier ICO and given to early contributors. The rest are held by the company itself, as many or more than 50%. Like Ethereum, they do use “gas” to run the platform, but it’s fiat that buys gas to execute smart contracts.
Also, beyond smart contracts and stable stores of value, they’re looking to unite two competing philosophies in the blockchain universe: on-chain and off-chain transactions. They call it a “joint accounting” model. Businesses can conduct transactions off the primary chain, with their own verification methods and then push them to the main chain.
According to their whitepaper: http://docs.neo.org/en-us/
“Although NEO support the exchange of assets on the chain, the blockchain itself does not provide order book and order matching functionality…through a mechanism called ‘superconducting.’
Under the superconducting transaction, the two parties do not need to host the property to an intermediary (traditional exchange). Users only need send to the exchange an order signed with their private keys. After the exchange matches the buyer and seller orders and broadcast transactions is the transaction complete. From beginning to end, property does not leave the user’s control, putting an end to the traditional moral hazard. Exchange under the superconducting trading mechanism only plays the role of information matching.”
If Coins equal Shares, how does the Distribution work?
According to their website, NEO’s 100 million tokens are divided into two portions. The first portion is 50 million tokens distributed proportionally to supporters of NEO during the crowdfunding. This portion has been distributed.
The second portion is 50 million NEO managed by the NEO Council to support NEO’s long-term development, operation and maintenance and ecosystem. The NEO in this portion has a lockout period of 1 year and is unlocked only after October 16, 2017. This portion will not enter the exchanges and is only for long-term support of NEO projects.
The plans for it are as below:
? 10 million tokens (10% total) will be used to motivate NEO developers and members of the NEO Council
? 10 million tokens (10% total) will be used to motivate developers in the NEO ecosystem
? 15 million tokens (15% total) will be used to cross-invest in other block-chain projects, which are owned by the NEO Council and are used only for NEO projects
? 15 million (15% total) will be retained as contingency
? The annual use of NEO in principle shall not exceed 15 million tokens
Should You Invest in NEO?
“In almost every respect they’re absolutely achieving what they set out to achieve, which is to “build a financial system that can bridge the gap to real world assets.They’ve cleverly found a way to mash up future technology with legacy systems into an elegant hybrid system. In the long run, it may not be the system we need to change the world.
But it might just be the system we need right now.” https://hackernoon.com/is-neo-the-one-67799886b78f
We, at ItsBlockchain, agree to this. The project is firing on all cylinders even as we are posting this article. On top of this, the recent price increase has a lot of investors intrigued and excited at the same time. It’s not too hard to picture the entire NEO team relentlessly working day and night to make things happen. And if all of this wasn’t enough to back NEO, the Chinese companies have also taken a liking to this blockchain project, by the look of things. This also reflects upon the NEO market cap, which has grown by leaps and bounds. With a significant rise in the value of each individual token as well, things for NEO are looking incredibly promising right now.
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