Neo NEO

About NEO

NEO is a decentralised, open-source blockchain program that’s administered by the people who use it. It’s one of many projects which aims to form the backbone of a future, smart economy. It does this through smart contracts, in the same way as Ethereum. Smart contracts, along with ‘digital assets’ and ‘digital identity’, form one of the core structures of the sort of economy envisioned by blockchain’s creators.

• 100 million NEO tokens came to be with the genesis block.
• Of these, 50 million were sold in the initial coin offering.
• NEO can support up to 10,000 transactions every second.
• NEO is indivisible, unlike BTC and ETH.

History of NEO

Back in 2014, HongFei Da and Erik Zhang came up with the idea under the name Antshares. A white paper was released in 2015, and the platform adopted its current name in 2017. Unlike many other cryptocurrencies, the name is actually quite straightforward — it comes from a Greek term meaning ‘new’, which you might recognise from words like ‘neoclassical’, ‘neophyte’, ‘neologism’ and ‘neoconservatism’.

You might hear the currency called ‘The Chinese Ethereum’, though this isn’t a nickname that the developers themselves endorse. The company behind the currency — OnChain — is headquartered in Shanghai, and retains close ties to some of the Chinese economy’s big names. This puts it at odds ideologically with many of the big names in cryptocurrency around the world.

NEO vs GAS

The platform enables the use of two tokens: NEO and GAS (or neoGAS). The former is used to determine voting rights within the system; the latter is used internally for transactions and smart contracts.

What is N3?

N3 is Neo’s term for the third version of the blockchain, which was first announced in 2018. It’s not actually backwards compatible with the existing NEO chain, which, according to the developers, will be called ‘Neo Legacy’, and will run alongside the new version rather than being replaced by it.

Among the major changes introduced in version three is built-in oracle, a simplified architecture, and a decentralised identity protocol. The N3 MainNet is set to launch in the third quarter of 2021.

How does NEO Work?

Regulatory Compliance

We might wonder how a real-world asset can be entered into a blockchain ledger in a way that’s decentralised, trustworthy and free of intermediaries. The NEO platform does this by linking a particular physical asset with a digital equivalent on the network. This works because, unlike other blockchains which prize anonymity, NEO requires that contributors, including businesses and individuals, have a verifiable identity. This puts the focus on regulatory compliance. Put simply, to use the NEO network, everyone will need to know who you are.

What is Proof of Stake?

NEO uses a modified version of the proof-of-stake protocol. In contrast with the proof-of-work method favoured by Bitcoin and other ledgers, proof-of-stake does not require that the machines involved perform arbitrarily difficult sums in order to restrict the amount of time it takes to mine a given block.

A proof of stake consensus method relies not on mining, but on validating. Validators stake their cypto as collateral, and in return get the right to validate transactions. If you validate a new block, then you receive the transaction fees.

Proof of stake is more environmentally sound, in theory, as it doesn’t require quite the same degree of energy consumption as proof of work.

What is Byzantine Fault Tolerance?

Byzantine fault tolerance is named after a twist on the ‘two generals’ problem, in which allied generals on opposite sides of an enemy encampment cannot reach an ironclad agreement about when to attack, as they’re always unsure about whether their acknowledgement has been received.

In the Byzantine version of the problem, there’s more than two allied armies. Moreover, some of those generals could actually be traitorous, meaning that they might lie about their intentions in order to save their own armies while seeing their enemies fight one another.

This is relevant in a blockchain, where strangers must reach consensus without needing to trust one another. The solution, Byzantine Fault Tolerance, is employed programmatically. Typically, a BFT algorithm works by having machines send their orders to one another; if enough of them match up, then it becomes progressively more difficult for a bad actor to distort the decision-making process.

NEO Price History

NEO hit its all-time high in January 2018, during the crypto bubble of that period. It rose to $187.50 at this time, before slumping back to $6 over the year that followed. NEO was among the many cryptocurrencies to benefit from the boom in late 2020 and early 2021. It has experienced unprecedented rises in this period, along with a general slump after Elon Musk poured cold water on to Bitcoin in mid-May.

NEO Price Prediction

Some investors believe that the price of NEO could well rise past the $200 mark by the end of 2021, and push steadily beyond that in succeeding years. With that said, the investment in any cryptocurrency carries inherent risk, and there is always a chance that the value of NEO will ultimately collapse to zero.

What Affects the Price of NEO?

Like all cryptocurrency, NEO is strongly tied to the crypto market as a whole, and in particular to Bitcoin, which is by far the largest currency by market cap. If BTC rises or falls, then so too will NEO.

Any intervention by the Chinese government may spell a choppy future for the currency. At present, Neo enjoys support from many huge Chinese businesses, including the Alibaba Group. While the CCP remains broadly warm towards the NEO, its fortunes are likely to be tied to that of the wider Chinese economy.

Given that the currency is tied to East Asian markets, there’s considerable scope for growth as those regions expand economically.

The NEO network offers many technical advantages over Ethereum, but that does not necessarily mean that it will succeed it. There have been many purported ‘Ethereum killers’ over the years, and yet Ethereum remains stubbornly alive.