NEO (NEO) – Is It a Good Investment?
What is NEO?
NEO is a decentralized ecosystem which can be used to build decentralized applications on top of, store and execute smart contracts and digitize assets with digital identity. NEO is created with the focus on fulfilling the aspirations of both government regulators and private companies.
The consensus mechanism of NEO is delegated Byzantine Fault Tolerance (dBFT), this means that every token holder can vote upon “bookkeepers.” The selected bookkeepers reach a consensus with each other and generate new blocks that are attached to the blockchain. Under certain circumstances, NEO can process up to 1000/tx per second.
The time to generate a new block is 15 – 20 seconds. There are two different tokens in the NEO-ecosystem, NEO, and GAS. If you hold NEO-tokens, you own a part of the NEO-blockchain, earn GAS through staking, and you can vote on bookkeeping nodes.
GAS is the asset that powers the blockchain. For every transaction, smart contract execution or performing of other tasks users have to pay fees in GAS.
The NEO-system includes also:
- NeoX: Protocol that implements cross-chain interoperability
- NeoFS: Distributed storage protocol, based on the InterPlanetary File System (IPFS)
- NEP5 token standard: A standard for the issuance of new tokens, similar to Ethereums ERC20 standard
- NeoVM: Virtual machine
This project was started under the name “Antshares” in the year 2014 and later rebranded to NEO. The ICO of Antshares was held from 9. June 2016 to 9. July 2016 and the ICO-price was 0.032 $.
Antshares was founded by Da Hongfei and Erik Zhang through Da Hongfeis development company Onchain.
Can it be mined?
It cannot be mined. It uses PoS as consensus mechanism. The asset can be staked to get the second token GAS as a staking reward.
What differs NEO from other Cryptocurrencies?
It works in cooperation with Chinese authorities to realize its vision of a “smart economy.”
They work very closely with regulators and try to develop everything in compliance with laws and regulations.
They want to provide a platform where smart contracts can be used efficiently and in a safe environment. Another big part of NEOs vision is to establish legally binding digital signatures and make it possible to digitalize every asset.
What distinguished them from Ethereum is the fact that smart contracts in NEO can be written in multiple different programming languages instead of using just Solidity. And in contrast to Ethereum NEO has finality, which means it cannot be forked and NEO uses two tokens (NEO and GAS) in its ecosystem.
How much is it worth today?
What is the total and the circulating supply?
The total supply is 100,000,000, and the circulating supply is 65,000,000 NEO.
50% of the total supply was initially held by the NEO development team. They are locked in a smart contract and each year 15 000 000 NEO will be unlocked with the purpose of funding long-term development goals.
Where can you buy NEO?
You can buy it on several cryptocurrency exchanges, most notably Bitfinex, Binance, Upbit, and OKEx.
Can it be sold for cash?
You can sell it for cash on several cryptocurrency exchanges that have fiat-pairings, most notably Bitfinex and Upbit.
More and more ICOs are coming to the NEO-platform, and the developers are very active. And the close association with OnChain is a significant advantage, as they work in synergy with national authorities. The NEP5-token standard is already working well.
I expect that we see more projects built on top of it in the near future. Another thing on their roadmap is to further decentralize their ecosystem by expanding the number of nodes. With the launch of Trinity, it has now its own Lightning Network, similar to the Raiden Network on Ethereum.
Verdict and Rating
It is a fascinating and complex ecosystem. The team is actively developing and working on improving their project. It has some unique features that make it incomparable, like the two-token setup and the close cooperation with regulatory bodies. If China integrates blockchain technology at large scale in their industry, it is very likely to do this with a domestic product.
However, there are some downsides as well. First, it is not even close as decentralizes as Ethereum and the NEO council holds 50% of the total NEO tokens. And there was an incident with a non-responding node that slowed the whole network down; this raises questions about how scalable the NEO-project really is. I personally doubt that NEO can process 1000/txs in a non-ideal environment. Several ICOs clogged the NEO-network recently, for example, Trinity, THEKEY and Bridge Protocol. But it has to be said that this happens to Ethereum as well and we have to see that the whole space is still under development. Certainly an interesting project.
DisclaimerThe above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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