NEO and Ethereum are two cryptocurrencies whose developers have intended them to serve similar roles for the crypto community — those being to become the primary platforms for the evolving internet, for ICOs, smart contracts and DApps (decentralized applications).
However, while they may share some goals, each platform also has other priorities and so is going about the realization of their mission statements through different methods.
Ethereum is primarily concerned with becoming the go-to platform for DApps and they are currently cornering the market on this front. Their ongoing work is to provide developers and users greater options and control to develop their own applications.
In contrast, NEO’s developers’ objective is to become the standout platform for the blockchain-enabled economy.
Breaking this down — Ethereum builds technology in response to the demands of current users while NEO seeks to anticipate the needs of future user bases.
This distinction is key to understanding the most important differences between NEO and Ethereum.
In a smart economy, the focus is on virtual assets. Each digital item will be authenticated in the blockchain and can be bought, sold and traded using smart contracts. Although both Ethereum and NEO will likely include many of the same features, this distinction is important to note. The reason being a smart economy isn’t without government regulation and oversight. Therefore, NEO and other platforms who want to make the most of the smart economy are putting a great deal of thought into how best to build in such a way that adheres to governmental regulations.
Additionally, Ethereum and NEO use different protocols. Ethereum utilizes Proof of Work (PoW), which is the same one that Bitcoin uses. In this system, computers on the network compete to solve mathematical forumas and are rewarded with the right to confirm transactions on the blockchain, which makes the network secure. The drawbacks of this include the massive energy consumption needed to solve these equations, and the danger of the 51% attack, which could occur if a group of miners control more than 50% of the network’s mining hashrate, or computing power. On the other hand, NEO uses dBFT (Delegated Byzantine Fault Tolerance) protocol.
It can best be explained as being similar to the way governmental bodies function — or should if working correctly. Rather than allowing everyone to have the ability to participate in the validation process, anyone with NEO tokens can vote for delegates. These individuals, also called bookkeepers take care of the network for all other users. This means that NEO can be more efficient than other protocols, but since bookkeepers’ digital identities will be known to comply with governmental regulations, this system is much less decentralized.
NEO cannot fork (offers finality, important for financial industry and various other markets), while Ethereum can.
Ethereum has one coding language, NEO supports many coding languages.
NEO has two tokens: NEO and GAS, Ethereum only has one: ether.
NEO is theoretically resistant to quantum computers — Ethereum is not.
Now, given all the differences and the fact that both platforms will have some of the same capabilities, there are a number of ways NEO and Ethereum can exist side by side without competition. But, should NEO’s developers become interested in directly challenging Ethereum’s market share, they have a number of benefits which give them an edge over other platforms.
In short, both Ethereum and NEO offer users a range of options, and while NEO is focused on adhering to regulations, which will make it essential in financial markets, Ethereum fosters innovation and further development of blockchain technology. Both of these platforms offer tremendous value to their users, and their commonalities will likely further drive innovation as each tries to stay one step ahead of the other.
