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NEO: The future of smart economy

What is NEO?
NEO is one of the most exciting cryptocurrencies in the market. Since its launch in December 2014, NEO has become the largest cryptocurrency in China, and the 11th largest in terms of global market capitalization. By the end of 2017, NEO closed the year trading at the $73 level. As of the time of writing, NEO is now trading at the $38 level.

Aside from being a strong cryptocurrency, NEO has massive potentials when it comes to its technology and practical application.

How does it compare with Ethereum?
Ethereum and NEO differ in many ways, but there are two very major differences between them.

Objectives
Ethereum: Ethereum aims to be a platform for Decentralized Applications (DApp). By being the market leader in the DApp market, Ethereum is able to use the blockchain as a way to improve the internet’s design. Through DApps, users and providers are able to connect directly, without having a central point of weakness. Ethereum’s move to utilize the blockchain is a response to current trends and demands.

NEO: On the other hand, NEO aims to develop a product for the digital future. While utilizing many of ethereum’s innovations and technology, NEO ultimately works on a future platform for an innovative smart economy. As Ethereum responds to current demands, NEO anticipates future demands.

Protocol
Ethereum: Ethereum uses the Proof-of-Work (POW) protocol, which is the same protocol as bitcoin’s. Using POW, computers involved in the network competitively solve complex mathematical formulas in order to have the right to confirm transactions in the network and receive rewards in the form of bitcoin. This is what makes the entire system decentralized.

NEO: NEO, on the other hand, uses the Delegated Byzantine Fault Tolerance (dBFT) protocol. Basically, this protocol works by addressing the issue of how to have everyone on the network work together with all honesty. Instead of having all NEO holders participate on transactions’ validation process, NEO token holders get to vote for bookkeepers who maintain the network for everyone. Though the idea of blockchain innovations is decentralization, NEO’s protocols are not as decentralized, which makes it more compliant to government regulations.

What’s next for NEO?
On the short term, NEO is currently undergoing recovery from its major dip last June 29. After diving to the $27 level, NEO is slowly recovering to the $38 level.

On the long-term, NEO appears to be bullish, especially with more innovations coming into play. With NEO’s sights centered on the future smart economy, it seeks to respond to a demand that is not even there yet. Once the demand arises, NEO will have already been there. With more innovations and improvements, we can only expect NEO to reach even higher price points in the coming years. NEO creator, Da Hongfei, states,

“We want to be the place people go to when they want to do serious and reliable transactions.”

Higher standards and higher quality ICOs
NEO is one of the most compliant projects to government guidelines and regulations in the Asian market. This means that ICOs launching off the NEO blockchain will have to adhere to more stringent regulations, therefore filtering ICO projects to only the most serious, most innovative, and most trustworthy ones. These ICO projects also have to be handpicked by the NEO council, which further improves the legitimacy of the ICOs. Historically, ICOs launched at the NEO blockchain have outperformed ICOs on other platforms in terms of percentage of return.

ICOs and developers move from ethereum to NEO
Some notable ICOs and developers have moved from the Ethereum blockchain to the NEO blockchain. The Narrative ICO, Pikcio ICO, Thor Token, and NEX have all originally planned to launch off the Ethereum blockchain, but decided to move to NEO instead. Compared to ethereum, the infrastructure in NEO is much more user and developer-friendly. This means that it is easier to code on the NEO platform than on the Ethereum platform, which results to lower barrier of entry for NEO.

Hack-A-Thons
NEO is actively pushing Hack-A-Thons on its platform. A Hack-A-Thon is basically a coding event where NEO promotes its platform by having coders compete against each other for a particular coding goal. Just for the first quarter of 2018, there are already 13 events lined up. These events push for innovations on the platform, which greatly attracts more developers and key players.

Transaction rates
On the more technical side, NEO currently has a rate of 1,000 transactions per second, while ethereum only has 30 transactions per second. NEO is pushing for 100,000 transactions per second by 2020 without sharding or second layer scaling solutions. This improvement is slowly being developed, which could mean increasing transactions per second within the year.

On the long-term, NEO is an exciting project that has one of the highest possibilities of realizing its potentials this 2018, in comparison to the other cryptocurrencies. While the market is slowly recovering from a major correction, expect NEO to make more massive moves in the coming months.

To know more about other cryptocurrencies, please visit our education page.

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