Is NEO the “Chinese Ethereum” or is it even worth buying?
Should you trade NEO?
As the race to make the next best cryptocurrency and blockchain application continues, we will be looking into the history of NEO coin. Did it kill Ethereum as many people were thinking? Although NEO is a fairly new cryptocurrency, it has wasted no time in becoming a serious competitor for Ethereum. ETH has been around for far longer. It is rivalling bitcoin as the second most used cryptocurrency by improving in a few areas where BTC falls short. Regardless of this, NEO still attempts to rival ETH. NEO’s nickname is “ the Chinese Ethereum”. Simply, because it is extremely popular in China.
Both NEO and ETH are very similar. Both cryptos allow you to create Apps and smart contracts, this is the intention. Bitcoin is just a cryptocurrency, that’s why it’s not offering the same as NEO and ETH. In doing this, they both aim at the same target market. That’s why we’ve decided to make this post dedicated to explaining the ups and downs of NEO coin. We will be focusing mainly on NEO coin rather than Ethereum. Simply because of the fact that NEO is a Chinese crypto. Most of the information about it is not accessible to those who do not read or speak Mandarin.
The History of NEO
NEO is a blockchain and cryptocurrency platform designed in hopes of building a scalable network of decentralized applications.
Its initial release was in February 2014 as AntShares founded by Da Hongfei and Erik Zhang.
Part of the history of NEO starts in June of 2017. There was a brand name change and AntShares became NEO. In March 2018, NEO’s parent company Onchain decided to distribute 1 ontology (ONT) token for every 5 NEO coin held in a user’s wallet. This was used to vote on system upgrades, I.D verification and other governance issues on the NEO platform.
How the history of NEO continues. The Genesis Block was creating over 100 million NEO during the distribution period. 50 million NEo are sold to early investors. The rest are locked into a smart contract. NEO Development team is using 15 million NEO tokens every day, which the smart contract is unlocking for them. The reason is to fund any long-term development goals. NEO tokens generate a slow deflationary amount of GAS tokens used to pay for any transactions on the network. A Decaying half-life algorithm controls gas tokens and their inflation rate. Which is due to release 100 million GAS over the next 22 years.
What’s Next for NEO?
Here’s a sneak peek unveiled by NEO Core Dev Erik Zhang. https://t.co/Ln5NHZzKcs
— NEO Smart Economy (@NEO_Blockchain) July 10, 2018
NEO’s Thumbs Up
One of NEO’s main selling points for many people is that creating smart contracts is far easier. To program a smart contract using Ethereum, you will need a fair understanding of the Solidity programming language. NEO, on the other hand, make use of the common and already existing programming languages. Also, NEO has a built-in proof of stake system. This means far less energy is needed, resulting in cheaper and faster transactions. The proof of work systems used by Ethereum are fairly inefficient, however, there’s a chance Ethereum are working on this and it could change at any time. Also, the process of transferring coins between accounts is free on NEO.
Another benefit NEO has is its focused use cases and the design that lends it to specific applications. An example of this is NEO’s ability to digitise physical assets. This means the NEO blockchain will allow you to verify specific real-world assets you own such as a car or fiat currency etc. This is a huge step in linking the blockchain and the real world together.
NEO is also the only blockchain that is quantum computer proof. NEO released a whitepaper which includes a proposal for an “Anti-quantum cryptography mechanism” named NeoQS. The developers may eventually include this into the existing NEO architecture. Though it may not be an essential feature today, in a few years from now it may become important as quantum computing becomes more common.
Ethereum’s Thumbs Up
One of Ethereum’s main advantages over NEO is its proper decentralisation. At the time of writing this, Ethereum’s main net was being hosted across 15566 nodes all over the world. NEO, on the other hand, is concentrated down to only a few nodes. The NEO Council run most of these nodes. This is making the system centralised in its current state.
Ethereum has hosted the creation of a large number of different cryptocurrencies and has a seat very close to the heart of the blockchain technology. In the time of writing this, out of the top 100 tokens according to CoinMarketCap, 96 are hosted by the Ethereum blockchain.
Is NEO Worth it?
What does the short history of NEO tell us? Is Neo Worth it? Despite last year’s Chinese government crackdown on cryptocurrencies, NEO still flourishes. In January 2018, digital currencies saw a downward spike following the news of the Chinese and Korean government’s crackdowns on cryptocurrencies. However, amongst all the chaos, NEO still managed to stand tall and even keep going up for a few hours. And then it NEO started following the downward movement of the entire marketplace. Experts say this is a good sign that the coin’s backing and momentum is very strong. On January 15th 2018, NEO coin’s worth hit an all-time high of 196.85$ which is far higher than it was just a month prior which was only 33.64$.
One of the main reasons NEO has high prices is because it is able to pay out considerable dividends to any users that have a large number of tokens. With more use, the earnings can add up. They evenly distribute the GAS used as transaction fees, amongst NEO token holders.
Ethereum also pays dividends, although it may be much harder to get any. On the contrary to NEO, Ethereum users will have to own a considerable amount of ETH to stake before they can start earning any dividends. The creator of Ethereum, Vitalik Buterin, has set 1,000 ETH as the amount you need to start earning dividends. Eventually, it will be lower over the time.
Things to take into consideration
Now what for conclusion history of NEO tells us. Both Ethereum and NEO are smart contract cryptocurrencies. In this, they have many similarities but this does not deem them mutually exclusive. There may be a chance people overestimate the effects of competition in the cryptocurrency world, and you will find many people confidently stating that NEO will be the end of ETH and vice versa. The reality is, despite any major marketing moves by either party, there is no real way to predict the outcome. If you are considering purchasing any of these cryptocurrencies, please take into consideration that cryptocurrency is volatile, unpredictable and very speculative by nature.
Please be sure to do your research and have all your facts checked before you invest.
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