The implications of NEO being indivisible - more scarce than even Bitcoin 🤓

NEO is doing amazing both in terms of development as well as price. Now that the price has surpassed $150 per NEO, one may start to wonder about the implications of the fact that NEO is indivisible.

NO LESS THAN 1 NEO

What I mean by indivisible is that you cannot own fractions of a NEO. You own either 1 NEO, but you can not own 0.5 NEO. NEO's approach is that NEO tokens are actually NEO shares and just like with normal shares, they are indivisible.

Interesting fact: Despite the 100,000,000 total supply of NEO, the indivisibility makes NEO in fact more scarce than Bitcoin. Yes, Bitcoin's total supply is about 21 million, but you can (and most people do) own fractions of a Bitcoin. Whereas with NEO, since you cannot own less than one NEO, there are at most 100 million people in the world who will own one NEO, ever. And considering I own many more than one, and many own many more than I do, I would estimate the maximum total potential NEO owners to be far, far less than 100 million. They are, in fact, a precious and rare commodity.

If you own less than NEO on an exchange - I'm sorry, you do not actually own that NEO and the exchange is 'virtually' splitting it up for you. They cannot be split and you cannot withdraw fractions of NEO.

HIGH PRICE MAKES IT UNATTAINABLE

As the price of NEO grows, so does the hurdle to get into NEO. Right now it already costs $150 to step in, but this may grow a lot in the future. What will happen if the cost of entry is in the thousands? Contrary to Bitcoin and others, NEO can't tell small investors to 'just buy part of it if you can't afford a whole one'! At some point the price may be so high that only wealthy people and institutional investors may step in.

I'm not sure if that is good, bad, or of no importance. In a way a higher price may attract more serious investors, but it may also shy smaller investors away. Then again, NEO was never intended to be a payments system for everybody - it's a platform for the smart economy. It's okay if it's the corporations buying in - NEO shares were never intended to be a means of trading for the average consumer.

GAS TO THE RESCUE

Fortunately there is also GAS, the native 'gas' token of the NEO blockchain that is generated by NEO holders. Contrary to NEO, GAS actually is divisible. This is because GAS is supposed to be used for (eventual) transaction fees and smart contract deployment, and in the case of fees they will be low and possible variable, and as such a divisible unit was necessary and wanted.

I believe that when NEO itself becomes very expensive that investors may start to turn toward GAS instead, as it is closely linked to the NEO price and seems to follow it at a more or less 50% of the price of a NEO, though it does lag behind it a little bit.

(calculate your GAS generation here)

For now GAS doesn't serve much of a purpose yet and is mostly of no interest to most investors, but as time progresses and NEO continues to grow I think we're going to see an increasing interest in GAS. Even though GAS will be 'released' into the market by NEO holders, it will take 1 NEO 22 years to generate 1 GAS, so the supply remains limited. Especially since GAS has a low coin supply.

Right now we're seeing NEO lead the pack and GAS following in terms of price, but perhaps due to the dynamic, once NEO gets too expensive we will see GAS move first. And obviously if the GAS price should rise, naturally the NEO price must also.

I think splitting NEO and GAS apart into two tokens is a brilliant move by the NEO team. It makes investors go crazy over which one is the most valuable, and I see a lot of potential for the two to affect one another's price.

(Art by Roy Lichtenstein)