NEO Explained: All You Need to Know About the Token for the Smart Economy
If you’ve been racking up your brain looking for the best cryptocurrencies to invest in it’s hard not to come across Neo. The race to be next best crypto is hotting up and while Ethereum holds firm, Neo’s surging prices, especially in the last 6 months, have made it a worthy competitor.
Planning an investment already? Well, hang on, before you do so it always advisable to read and learn about how the blockchain works, the team behind the idea and other relevant details as these factors usually determine a platforms utility which in turn affects its price.
Here’s everything you need to know:
- What it NEO?
- How does Neo work?
- Token Utility and Fees
- Who’s Behind NEO?
- Benefits and Downsides of Using NEO
- How to Buy NEO
- Best NEO Wallets
- NEO Vs Ethereum
- How to mine NEO on Windows and Linux?
- Where to Spend NEO?
What is Neo?
In simple words, Neo is China’s first ever decentralized cryptocurrency and its entry into the blockchain world and just like Ethereum it provides developers with the all the tools and assets needed to enter the blockchain platform.
Neo, earlier known as Antshares rebranded itself in June 2017 for a more improved and professional standing in the market. So why Neo? Well, in Greek it stands for “newness, novelty, and youth”.
But let’s get a little technical here. Neo’s aim is to combine digital assets, digital identities and smart contracts using the blockchain platform for a Smart Economy. So what are these fancy terms?
What are Digital Assets?
Digital assets aren’t just about currencies it can also be images, videos etc. but a smart economy is a much broader term. In order to achieve a smart economy, Neo wants to digitize even physical assets such as property, car, gold etc. using smart contracts. Having digital assets in a centralized environment is risky but with the advent of blockchain, it’s all decentralized and thus safer.
What is a Digital Identity?
Digital identity is the information about an entity or person stored in electronic form. For verifying digital Neo will make use of facial features, fingerprint, voice, SMS and other authentication methods to ensure utmost safety and security.
What are Smart Contracts?
The idea of a smart contract was brought to light by Nick Szabo in 1994. Smart contracts are just like any contract that exists between two entities except it is on the blockchain and thus not in anybody’s control.
It is a self-executing contract that is triggered only when certain conditions in the contract are met thus ensuring a safe and trustworthy system.
What is the GAS Token?
Like Ethereum has ether for all transaction, upon using the Neo blockchain you pay in Gas (formerly known as Antcoins). In other words, it’s the fuel to the Neo blockchain and unlike the Neo token it can be divided by a factor of 1/10^8 and isn’t pre-mined either.
But here’s where Neo steals the spotlight. Since gas has been designated as a separate token the gas received for each transaction on the Neo platform is distributed amongst all Neo holders making use of personal wallets like Neon or Neo GUI that can be claimed and used for transactions anytime.
And guess what? It’s all effortless. No need to for high tech computers, no reason to keep your wallets open or other such hassles, a benefit certain to attract more investors in the future.
Who is Behind the Neo Blockchain?
Neo aka Antshares (as it was known back then) was first developed by OnChain in February 2014 and since then has gone on to become one of the top blockchains especially in Asia.
Under the leadership of Da HongFei (CEO) and Erik Zhang (CTO), Neo certainly has the financial and technical backing needed to develop the next big blockchain.
City of Zion
City of Zion, a group of open source developers have provided rock-solid support towards the growth and betterment of the Neo blockchain.
Whether it is about holding multiple DAPP competitions to attract more developers, the development of widely used NEON wallet or the upcoming Neo based exchange, having a team of such expert minds is certainly a game changer.
How do I Buy Neo?
Since NEO cannot be purchased directly using fiat currency I’d recommend you get some Bitcoins or Ethereum and exchange them for Neo tokens using a trusted and safe exchange. Below are listed some of the top exchanges that have listed Neo.
Binance: Binance is the only exchange wallet that offers gas for holding Neo and thus is our top recommendation.
Bittrex: Bittrex is one of the most widely used exchanges not just for Neo but for all cryptocurrencies alike.
Other top Exchanges include:
- NEX (Upcoming Exchange)
For a detailed analysis of these exchanges read our post on the Best Exchanges for NEO in 2018
How do I Store Neo?
One of the best things about Neo is that there are plenty of wallets at your disposable be it online, offline or hardware but making a sensible choice will give you the edge. Only a few wallets provide gas rewards for holding Neo coins.
If safety is of utmost importance, the Nano Ledger offers the best solution and in combination with the NEON Wallet (our top desktop wallet recommendation) helps you claim collected gas anytime.
Other top wallet choices include the official Neo wallet NEO GUI, Binance, Neo Tracker and Ansy (a paper wallet that offers no gas rewards).
For a more detailed analysis of these wallets check out our post on the Best Neo Wallets of 2018.
Neo Vs Ethereum
One of the major differences between the 2 blockchains is the Consensus Mechanism. NEO uses Byzantine Fault Tolerant (dBFT) consensus system whereas Ethereum has a Proof-of-Work consensus. So which one is better?
DBFT is both cost and energy efficient but with Ethereum expected to soon make the switch to a Proof-of-Stake consensus, it’s going to be equally energy efficient.
Also, Neo supports commonly used programming languages such as JAVA, C++, Python etc. whereas coders need to learn Solidity to use the Ethereum blockchain making Neo the more developer friendly platform.
But these aren’t the only differences between these growing platforms. Our post on Neo Vs Ethereum covers it all in detail.
How to mine Neo?
Unlike other cryptocurrencies like Bitcoin, you cannot mine NEO since Neo uses a DBFT protocol. Gas tokens are rewarded for holding NEO tokens in the wallet that can be claimed as and when required. Remember, not all wallets (especially exchange wallets) let you collect gas so I’d say stick to the popular NEON wallet or the official Neo wallet, the NEO GUI.
Future features to look forward to:
Neox: Neox is Neo’s answer to atomic swaps making it possible to swap tokens without relying on an exchange. It also supports cross-chain integration so smart contracts can interact and other crypto assets can be transacted across different blockchains making future cross chain collaborations a possibility.
Nex: Nex is the link between Neox and NEO and is the exchange currently under development by the City of Zion. Its successful implementation and running on the Neo blockchain is sure to attract tons of investors and developers from around the globe.
NEOFS: NEOFS provides cloud storage and is based on the Distributed Hash Table technology. It allows smart contracts to store any amount of data on the blockchain by segregating large data into smaller size restricted blocks stored in multiple nodes making scalability easy and the platform quicker.
NeoQS: A lattice-based cryptographic system where QS stands for Quantum Safe, the NeoQS aims to reduce threats of hacks fazed by other blockchains such as Ethereum and Bitcoin that utilize the ECC cryptographic system.