What is NEO (NEO)? Crypto Beginner’s Guide
While everyone may already be familiar with Ethereum and its many western counterparts, there is a new type of cryptocurrency that shares many similarities to Ethereum. There are many cryptocurrencies that try to tackle the same issues that Ethereum does.
Being able to keep a completely decentralized blockchain, provide opportunities to create apps and other platforms, have a relatively stable digital coin for transactions, and so on. While not all cryptocurrencies take on all of these issues at once, some altcoins do try.
However, there is one flaw in Ethereum and that is within its scalability. It is with this flaw that has led the way for a certain cryptocurrency to gain the name of Etherum killer, and not it isn’t Bitcoin!
This cryptocurrency descends from China and is the unexpected response to Ethereum. As its name would have you believe, this is a new cryptocurrency that will pave the way to a better future or at least a level up from Ethereum in certain areas.
NEO: The Chinese Ethereum That is the Future for the Smart Economy Cryptocurrencies
While everyone can assume NEO is just another Ethereum, there is more to this cryptocurrency than meets the eye. It was once called Antshares before a Chinese developer team took it over and gave the digital currency a massive upgrade and overall new look.
The developer team behind NEO have made many other innovations beyond decentralized applications and an open-source smart contract ecosystem. In a way, this cryptocurrency offers a bit more than even Ethereum to its growing community of users and third-party developers.
A few of these third-party developers are PeterLinX, City of Zion, and NEOtracker. These third-party developer teams work alongside the main developers behind NEO. This, in turn, opens up the possibilities for future innovations and quick repairs to NEO when needed.
The third-party developers and community will be responsible for the creation of dApps. The NEO developer team will retain control over the NEO platform.
NEO brings to the table what Ethereum hasn’t and that is:
- Superconducting transactions
- Digital identity and certificates that are easily integrated into the real world
- A dBFT consensus mechanism
How Does NEO Work?
NEO can be broken down into a few major components. Each part contributes to the functionality of NEO as a blockchain network and platform. NEO functions on the basis of the original Ethereum before the hard fork. Basically, “Law is Code” is the bedrock of NEO. NEO uses a digital, trust-less smart contract system that can transcend borders and work globally.
Another key feature of how NEO works is the if-then-else conditional programming structure. This structure is built around contract law, thus giving you smart contracts similar to Ethereum’s smart contract capabilities.
The rest of how NEO operates is as follows:
- NEO contract
This is the internal mechanism responsible for creating the smart contracts on the NEO platform. It is capable of making seamless, scalable smart contracts within a high-performance environment. It can integrate easily with other codebases such as Java, VB.net, Kotlin, C#, and F#.
- The delegated byzantine fault tolerance algorithm (DBFT)This is the driving force behind NEO. This algorithm is responsible for resisting Byzantine Generals problems, act as a consensus mechanism in place of the usual proof of work/ proof of stake methods, and will maintain this consensus at all times.
It will still function even if certain nodes within the blockchain are infected with malicious intentions or corrupted by hackers.
This is the part of NEO that is part of the main system. It is responsible for creating the ability to execute functions on the blockchain. It can also operate across the various blockchains within the NEO network.
This more of a service on the NEO platform. It does serve as the main function by acting as decentralized storage. This function is peer to peer and is more akin to other decentralized storage databases like Dropbox.
This is the part of NEO that serves as the main cryptographic function for the cryptocurrency and the blockchain network. It is a lattice-based cryptographic mechanism. Its primary use is to create problems that can’t be easily solved by quantum computers.
- Gas, also known as NEO Gas
This is a dividend that is paid to users who hold onto their coins. To earn these tokens you will need to keep your altcoins stored onto one of the wallets offered or on a wallet that is compatible with NEO. This is the token users can use as a form of payment for things on the NEO platform. Unlike the NEO token, the NEO gas token is divisible.
- NEO tokens
These NEO tokens are not mineable. These tokens are also not divisible either. Users can purchase NEO on the few cryptocurrency exchanges that sell them. The NEO token is considered to be a share in the NEO platform. Keeping these tokens in a wallet allows you to earn the other tokens that are used on the NEO platform.
NEO users can purchase NEO and store them on a digital wallet. Currently, NEO offers users a few wallet options. The mobile version works on Android. The desktop version works on Linux OS, Windows OS, and Mac OS. Last, but not least, there is also an online version of the NEO wallet.
What are the Drawbacks of Using NEO?
Despite the many advantages and innovations of NEO, there are still a few drawbacks to be aware of. Some of the drawbacks include:
- No mining or proof of work method
- Half of the sold NEO tokens are managed by the NEO council which makes this a bit more centralized than its competing cryptocurrencies.
- Not a substantial amount of users are adopting the cryptocurrency which puts limitations on future developments
NEO is definitely worth investing into as far as cryptocurrency goes. With the opportunities to develop platforms and dApps similar to Ethereum, the sky is truly the limit. For those who are looking for a secure and reliable cryptocurrency, NEO is definitely an option to look into.