As the crypto currency world continues to develop, everyday more and more people are taking out a second mortgage and putting their life saving into any project that has a aesthetically pleasing logo, Youtuber support, and a relatively low market cap.
The value of many projects in this space is ultimately built on hype, which in my opinion isn’t sustainable for future growth. This is why it’s important to really understand block chain technology, so you can accurately predict the longterm potential of many of these projects.
I love the idea of a decentralized world more than the next guy, but it’s very likely that the governments and business that control the world aren’t going anywhere, so its important to look at projects that support that philosophy as an investor.
Unlike Ethereum, which focuses on the creating a internet where we are free to develop, access, and earn through decentralized applications, Neo’s goal is to create a smart economy, whose goal is to help governments and business integrate blockchain technology.
Can you be dumb in a Smart Economy?
Actually you can be as dumb as a bag of rocks, and still benefit from a smart economy! Assuming the the intelligence of inanimate objects instantly became measurable and they all didn’t turn out to be geniuses.
Neo’s vision of a smart economy will utilize the blockchain to sell, store, and leverage digital assets through the use of smart contracts, while providing digital identification of users and assets as proof of ownership on the blockchain. This will ultimately grant the government to step in and take note of how much you sold that crypto kitty that you’ve been grooming for the last month for.
So the government will know what I did last summer?
Well yes, but when you think about how the world economy currently operates, it’s gong to be rather hard to achieve mass adoption without governments and big business being on board. And I doubt neither entity would want to do business with someone they didn't know.
There is currently a standard system used to determine digital identity called X.509 that NEO will implement.
The NEO Network broken down!
The NEO ecosystem is broken up into several intermediary parts, which I’ll briefly explain below.
OnChain
is a company founded by NEO’s founders Da HongFei and Erik Zhang whose goal is to develop private and public blockchains for Chinese businesses and government. This is done through a system called DNA (Decentralized Network Architecture).
NEOX
will provide NEO with the ability to atomic swap, or directly trade tokens without the use of an exchange. This will allow users to swap tokens across different blockchains. So we will be able to use our NEO to interact with all of the business that created blockchains using the DNA system above.
City of Zion
Which sounds like an impenetrable fortress housing precious magical items, but in actuality it’s just a open source group of developers who received funding from NEO create ICOs and Decentralized applications (DApps) on the NEO blockchain. This group is responsible for the creation of the NEON wallet!
NEX
An ICO that will allow for the use of decentralized exchanges and payment options on the NEO blockchain. This ICO is important because it will connect NEOX (atomic swapping) with the NEO blockchain.
Is NEO PoW or PoS?
Unlike Ethereum and Bitcoin who utilize a Proof of Work protocol, NEO uses a protocol called the Delegated Byzantine Fault Tolerance (dBFT), which is basically a proof of stake protocol with a few unique differences.
Basically this protocol grants a few dozen elected individuals called bookkeepers, the power to maintain and shape the NEO network. Although it might be a disadvantage to give a vast amount of power to a few people, this method will allow NEO to run more efficiently, while providing governments with more control over the network, due the virtual identities of these bookkeepers being made public.
Another cool feature of the dBFT protocol is that it destroys any possibility forking in the future. There must be a 66% consensus reached by all of the bookkeepers to implement any change, so there can be only one right answer in any debate!
Ok I sort of understand NEO, but what is this GAS?
Well I don’t know what your smelling currently, but the GAS I’ll be talking about is what is used to run the NEO network.
Gas: Is distributed to NEO holders proportional to the % of NEO held relative to the total supply. GAS can be claimed though any personal wallet online or online, so the network doesn't have to compute the interest of GAS to be paid out ultimately allowing for faster transactions.
NEO: Is used to vote on bookkeepers, who are several dozen individuals elected to make decisions on the NEO blockchain. Bookkeepers are paid through transaction costs, so it’s important to elect bookkeepers who pledge to keep transaction costs low!
Why developers love NEO!
So your telling me I don't have to complete a language requirement to graduate?
Neo allows developers to use five mainstream coding languages (more to come), like java and C+ to create smart contracts, which will provide developers with the ability to use their current skill sets to build on the NEO blockchain. This is different to Ethereum which requires developers to learn a completely new language called solidity to create on the Ethereum blockchain.
Is NEO a good bet for the future?
I have no clue because I am not an expert in this field, but after researching into the team, roadmap, and philosophy, I think NEO definitely deserves it’s recent run up in price!
I think the cryptos that develop a platform with governmental regulation in mind, will have the best chance of reaching world wide adoption. NEO is doing just that through their smart economy and focused on digital identification.
The moral implications of true decentralization and the need for governmental regulation are outside the scope of this article, so it’s up to you to decide which project to support! I just hope I was able to help you understand NEO a little bit better!
This has been a message from your friendly neighborhood #spiderblogger!
Disclaimer: I am not a professional trader, nor an expert in this field and this article is meant for educational purposes only.
Sources: 1, 2, 3, 4, 5, 6 , 7, 8
