What is NEO /antshare Gas, what is Ethereum Gas, how do you earn NEO gas and how much of it do you earn?
Hi everyone
In response to my last post people asked me to do a short post on what NEO gas and ethereum gas are. I'm trying to keep this high level.
NEO (newly rebranded from antshares) is analogous to an equity share in the blockchain. Gas by contrast is like fuel for a car. It is what is/will be paid to the blockchain network for consuming its processing resources. Applications will need to pay gas. The more processing power they consume , the more gas they will need to pay.
There will only ever be a finite amount of gas produced so its price will rise over time.
Gas comes into being initially as a dividend to holders of the NEO coins (provided they are held in private wallets and not on a public exchange). See my post for how to download a wallet on a normal laptop as I ran into problems but a friend helped me fix it https://steemit.com/neo/@katythompson/easy-way-to-get-private-antshares-neo-wallet-if-your-blockchain-synching-step-seems-very-slow
The dividend amount is a slightly complex formula that basically decreases about 10% ish each year. In year one (now) we get something like 0.5 gas per day per 1000 NEO shares. However you can look up the exact amount you get on this neat app I found
This also lists the trading price of NEO and its Gas which are $5.07 and $1.92 at the time of publishing this post.
The dividend holders can then sell their Gas on an exchange (or keep it as an investment)
App providers on the NEO network will either need to buy Gas on an exchange or buy NEO and collect the gas dividend and use that.
Just as gas is the fuel for the NEO network, so ( similar but not identical) gas is also the fuel for the Ethereum network. However unlike NEO, ethereum gas is NOT given as dividends to everyone that holds ethereum. It will be possible to earn ethereum or its gas (i'm not sure which but someone reading this will doubtless know and can add that to the comments?) when ethereum moves to a proof of stake consensus model. But my understanding is that not everyone will be able to be a proof of stake node to benefit. You have to have a minimum amount of Ethereum and to be selected somehow and there will be competition from the affluent ethereum holders to be a node. Those that are selected will put up some of their ethereum as a bond and in return they will be paid. I don't think the amount of ethereum gas produced has a finite limit, but again someone correct me if I'm wrong..
So I think the main differences to a new investor between the way gas works for NEO and Ethereum are:
a. The gas is finite in NEO but not in ethereum
b. Anyone with NEO on a private wallet earns NEO gas, but this isn't true of anyone owning ethereum. There are ways to earn more ethereum from your original holding but it will favour bigger ethereum holders and not small holders.
This is a narrow focused post on gas as that's what I was asked my my reader to write. But to compare ethereum and NEO for investment potential you need to look at a range of criteria including:
-Number of develops and development ecosystem (Ethereum wins hands down right now but NEO is expected to get a good community in China)
- Likely success in West vs China
- ICO market potential which has driven a lot of value for ethereum
- Use cases
- Partnerships
- Consensus mechanism
- How robust it is or will be as we march towards quantum computing
- Its potential market cap and where it is today (how much growth it has)
- And the earning potential (e.g. the NEO gas dividend vs ethereum proof of stake) of your existing holding
I may cover a comparison of the two blockchains on these measures if enough readers seem interested.
I am not qualified to provide investment advice and am not doing so. But for disclosure I do hold some NEOas it sounds to me like the technology is really good, I expect it to do well in China (as Alibaba did relative to Amazon), NEO is only a percent or two of etherum' current market cap today (so much more upside) and NEO provides dividends. But if Ethereum falls much further in price I would get back into ethereum as well.
Katy xx
@katythompson, do you know if the amount of Gas received per day is also based on the amount of claimed Gas, or is it solely dependent on how much Neo one has? e.g. i have 1000 neo and 100 gas. do I collect more new gas because of the 100 claimed gas units, or would i get the same amount of new gas with just the neo without the claimed gas?
From the NEO Whitepaper:
"GAS is the fuel token for the realization of NEO network resource control, with a maximum total limit of 100 million. "
It isn't any more rare than NEO even though it is displayed as 9 million on CoinMarketCap.
Very informative!
It's really interesting !!
Thanks @nazarwills
Thank you @katythompson very detailed and nicely explained everything.
you're welcome @blazing - thanks for the nice feedback
Sometimes I feel like I have been living in a cave for a very long time and have just come out and found a whole new world. I am so lost reading your article that I must read it again and again and then look up words. Thank you for writing in depth articles about crypto. I'm trying to learn and you are expanding my mind exponentially.
I can relate to this and love how you worded it!
There's a steep learning curve with the crypto world, and it's hard to stay current with it, as it moves so fast.
Thankfully, it does start to get easier once you get the basics down and familiarize yourself with the landscape of the "new world" that you've been wandering around in (like a big video game but this one is real). It's been an intense effort, many hours, and some mistakes, to get myself up to speed, but I'm starting to take the wheel more, as my confidence grows.
I think what I've been feeling have been "growing pains" for my brain!
It's really interesting !!
Thanks
informative thank you
How is NEO/GAS compared to ETHEREUM in regards to mining. Who performs the validation of transactions? Miners? Nodes?
They claim on their website quote
"With each NEO Block getting generated, GAS will be distributed to all NEO holders."
So I think regardless of whoever does the mining. The block reward is distributed among all the miners in the network based on the amount of Neo they hold.
thanks for info and following...upvoted and followed back