Powered by its NEO coin and GAS tokens, the NEO blockchain represents an intriguing solution for businesses looking to power their operations with blockchain. NEO is a blockchain designed to give businesses a scalable and easy ecosystem to develop decentralized applications.
With a bevy of smart tools including cross-chain functionality, quantum-resistant cryptography and more, the project has been called an “Ethereum-killer”.
What is NEO?
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On a broader scale, NEO is not only attempting to build a development platform, but an infrastructure for what the company calls a “new smart economy.” For NEO, this includes focusing on three major aspects: digital assets, digital identity, and better smart contracts. NEO offers users the ability to create global assets—which can be viewed by all smart contracts and users—as well as contract assets—which are specific to those being used by specific parties (such as application specific tokens).
In terms of digital identity, uses widely accepted digital identity standards based on public key identification. NEO also uses a variety of biometric and other multi-factor identification methods to verify users and ensure transparency. Finally, the company’s smart contracts, while operating in similar fashion to Ethereum, offer native cross-chain transactions and other key benefits thanks to the company’s bevy of partnerships.
What Makes The NEO Coin Unique?
One of the more unique features NEO has is its use of Delegated Byzantine Fault Tolerance (dBFT) consensus, which reduces miscommunications on the chain and avoids the “byzantine generals” problem. This conundrum occurs when multiple actors have to act in consensus and one chooses to go against the group.
In practical terms, this means the NEO coin has built-in mechanisms to avoid malicious actors thanks to its system for choosing special nodes to verify blocks, and establishing a speaker to propose changes to the chain.
In order for any change or verification to be confirmed, the network needs to achieve more than 66% consensus, a number that eliminates the need to validate every delegate node. More importantly, the use of byzantine fault tolerance ensures that malicious actors can be easily spotted and rooted out.
Importantly, NEO’s own dBFT model is designed to make scalability easier by reducing the resource needs to consistently verify new blocks and limiting the need for extensive mining by every user to ensure transactions are completed.
What About Mining The NEO Coin?
The NEO platform operates with two distinct tokens—the NEO coin and GAS—each with a unique purpose. The NEO coin represents ownership in the network itself, and are used in managing the blockchain, verifying chains, and voting on network matters. These coins are non-divisible, and they cannot be mined. All the existing NEO coins have already been minted.
GAS tokens, which fuel the day-to-day operations on the NEO blockchain—paying transaction fees, development costs, and more—can be staked by holding the NEO coin in a wallet on the chain. Because NEO uses a proof-of-stake model at the base of its dBFT, users who hold the NEO coin are rewarded with GAS for participating in the verification process.
There is a 100 million cap on GAS tokens and they will be trickled into the network over a 22 year period. Eight GAS tokens are generated per block, and that number drops by 1 every 22 million blocks. This reward reduction will continue until the GAS per block generation rate goes down to 1 GAS per block.
What are NEO’s Advantages?
- Cross-Chain Interoperability – NEO offers fast and scalable cross chain swaps thanks to its NEOX protocol, which scatters the steps of a cross-chain transaction across several blockchains provided they have smart contract capability. Each blockchain will perform a step in the transaction in sequence, opening up the possibility for the development of cross-chain smart contracts.
- Integrated Identity Management – Unlike other blockchains that require third party solutions to develop digital identities that can be verified by the network, NEO has built in features and is working on partnerships to allow this feature. This includes partnerships with THEKEY to optimize existing digital identification, and the use of Public Key Infrastructure X.509 standard, a widely recognized standard for digital identities.
- Flexible Smart Contracts – NEO smart contracts can be programmed in a variety of languages, including popular choices like C# or Java, unlike Ethereum’s more rigid ecosystem. Moreover, it allows for contracts that are more readable by humans, and provide some upgrades over the Ethereum versions. Most importantly, perhaps, it enables for contracts to be verified outside of the chain, empowering easier use for businesses which require compliance and transparency.
The Team Behind NEO
NEO, which is designed with the financial world in mind was founded by Da Hongfei, who believes in bringing legitimacy to the blockchain field. Moreover, the foundation counts upon a diverse and extensive team of experts in fields that include both veterans of the blockchain industry and newcomers.
One of NEO’s most notable collaborations is a technology partnership with Chinese blockchain firm Ontology. Ontology launched its own blockchain at the end of June 2018, migrating from the NEO blockchain in a move that saw select NEO users receiving a newly minted version of Ontology’s token (ONT), formerly NEP-5 tokens (NEO’s coin standard, similar to Ethereum’s ERC-20 standard) free of charge.
Where to Buy NEO
One can purchase the NEO coin or GAS tokens on Binance for a number of other tokens. HitBTC, also supports the purchase of NEO coins with BTC or ETH. Some exchanges enable users to use their credit card, perform a direct bank transfer, or Skrill. Other exchanges that list NEO coin include Cryptopia, Changelly, and Shapeshift.