NEO in Lay Terms

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NEO has been named as China’s Ethereum, and it is similar as in it’s a platform Blockchain for smart contracts, dApps and ICOs etc. It. Like Ethereum and all other alts, has been having a turbulent time of late, but it’s coming of age, and I think the future is very bright for ‘China’s Ethereum’. Actually, calling it that is a bit of a disservice to it because as good as both of them are, they are rather different.

Ethereum uses a programming code – solidity – which was created by themselves, and some might say this is limiting Ethereum because it means programmers will have to learn solidity to program on Ethereum. Neo, however, supports many advanced programming languages, such as Java, Python and C++. This I believe gives NEO an advantage because, why would a company/programmer choose to learn a new language when he can create the same thing in a language that he/she already knows.

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NEO’s Consensus Mechanism is also different to that of other cryptos. Proof of Work (PoW) by miners is used by most cryptocurrencies to validate their transactions (although more are moving over to PoS), which is the most common way a crypto is run. But there are drawbacks. A miners computer, will be working long hours, and they have a shelf life, and will no doubt need to keep investing in the latest one once theirs deteriorates. And because of the long hours miners computers are running, it will use an outrageous amount of electricity just to keep the blockchain going. Think of all the CPUs, GPUs, mining farms constantly burning electricity to create these blockchains. We need an environmentally friendly coin.

That’s where NEOs Proof of Stake (PoS) comes in. NEO uses bookkeeping nodes to run its Blockchain. These bookkeeping nodes stake their coins, which help stabilize the market value, and they verify each transaction. There’s no need for miners in PoS and as we know from the political infighting at Bitcoin recently, miners and other stakeholders can create divisions within a crypto, thus leading to a chainsplit. Bitcoin isn’t the only one that has hardforked. Ethereum split into two and Ethereum Classic was created. Ethereum also had another recent hardfork, but 100% of the blockchain followed the fork. This isn’t good for stability or confidence in a coin.

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Because it uses the Delegated Byzantine Fault Tolerance (dBFT) as its Consensus Mechanism, hardforking isn’t possible with NEO. The dBFT understands there can be problems achieving agreements in any system of work, so it leaves the decision making up to the bookkeeping nodes who are actually appointed by other users. What’s more, for each newly created block a chosen bookkeeping node will be chosen to chair the direction of the Blockchain and broadcasts it to the rest for approval. Once all the other bookkeepers agree, it is added to the Blockchain. This agreement system makes it virtually impossible for a chainsplit.

There’s more: Bookkeepers are rewarded for their work. And so are other investors. Any investor in NEO who stakes their NEO in the official NEO wallet will generate GAS, which is basically another token that you can use to either pay for your NEO transactions or accumulate and trade on against Bitcoin on trading sites. The amount of GAS generated varies, but if you have 100 NEO staked in a wallet, you will generate 0.33 per week or 16.8 per year. That’s free money just for staking and today’s price of GAS is about $23. Not bad for nothing.

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Earlier this summer, NEO went through a rebrand and a few collaborations were announced and the price went through the roof. It went from $8 to $55 in a week, and as of August it was the highest returning cryptocurrency of 2017. It’s had a tough time since, with all the China fud and stuff, but it’s hanging in there at about $31.

It’s still a very young crypto, and hardly anything has been launched on its platform, but that’s the beauty of it. All this makes ‘China’s Ethereum’ a very interesting crypto to invest in. Added to the fact that it’s a Chinese crypto, and China looks after its own. Some of the biggest companies in the world are Chinese and they do stick together. When they decide to use cryptocurrencies and Blockchains they will use a Chinese cryptocurrency, and which better to use than China’s Ethereum?

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Sources: https://neo.org/