What is NEO in simple words: history, course and how to buy

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2019-08-21 00:00:00:

NEO project is a blockchain-based cryptocurrency platform through which digital assets and smart contracts are created. Blockchain is a method of storing information , which consists in the distribution of individual elements of the data chain in a decentralized network. Each element of the data chain (block) in which transactions are recorded (for example, you can read about transactions in the Bitcoin network on this page ) is stored separately from each other on different computers of the network. All foreign exchange transactions are checked against these data blocks. Thus, the transaction and the owner of the funds are confirmed.

NEO is a Chinese project and was formerly called Antshares. In addition to the name of the platform, other transformations were carried out. The blockchain nodes, technical documentation and exchange ticker were updated. The design of the official Internet resource and social media has been completely changed. In addition, a new version of the smart contracts platform called NEO 2.0 was introduced.

NEO is a huge blockchain platform that provides the ability to perform completely secure transactions within the network, excluding the participation of intermediaries, for which a secure cryptographic coding technique is used. The NEO platform is a network that allows for the secure exchange of data and currency between users. At the same time, the risk of loss by network participants of their material assets is excluded.

The system got its name for a reason. NEO is the name of the main character in the movie "The Matrix", according to the plot of which people are used by the global computer network as energy resources. NEO takes a similar approach. The difference is that the source of energy for the existence of the system is the users electronic wallets and funds on them. The aspiration of the creators of the NEO cryptocurrency is the use of smart contracts based on blockchain technology in all spheres of the world economy, in which NEO will be the single means of payment. The founders of the system are actively working to increase its popularity and expand the scope of its operation. In particular, they have established partnerships with many active cryptocurrency systems and large companies such as Microsoft and Alibaba.

According to the head of NEO, their main goal is to create a new global financial system in which the virtual and real economies will be combined. The main link for this is smart contract technology, and the NEO cryptocurrency should be used as a means of payment to ensure their execution.

The project quickly became widely known in China. Since smart contracts have been chosen as the priority area of the system, NEO is often compared with another Internet platform - Ethereum (Ethereum) .

The NEO cryptocurrency has shown steady and continuous growth for a long time. Today it is ranked 18th in the Coinmarketcap ranking and has a market cap of $ 892,607,401.

History of cryptocurrency

The history of the NEO project dates back to 2014. It was then that the Chinese company OnChain, by the decision of its head Da Hongfei, founded a project based on blockchain technology, which is called AntShares. On the basis of this Internet platform, a cryptocurrency is created, which bears the same name.

As conceived by Da Hongfei, the project had a simple, but at the same time large-scale and ambitious goal, namely, the creation of a radically new global financial system, through which the real and virtual economies would be combined into a single structure. Smart contracts act as a means of such unification, and AntShares cryptocurrency is used to make payments within the system. The project is rapidly gaining momentum, improving and gaining popularity.

After a short period of time, OnChain signs an agreement with the Wings blockchain platform and begins to cooperate with Microsoft and Alibaba corporations.

In 2016, large-scale transformations are being carried out - new technical documentation is being developed, blockchain nodes are being updated, ICO ( initial token placement ) is being held to attract investments to launch the modernized cryptocurrency. In addition, the name of the platform is changing and from August 2017 it starts operating under a new name - NEO. The introduction of innovations and renaming bring positive results - the cost of virtual currency increases dramatically more than forty times.

However, there were also difficulties. In early September 2017, by the decision of the PRC leadership, a number of laws were passed banning Chinese banks from investing in cryptocurrency, as a result of which the value of NEO almost halved again. Nevertheless, the shock was of a short-term nature, and quite quickly the cryptocurrency began to regain its former status. OnChains management is constantly improving and modernizing the project, and is also looking for ways to reach a consensus with the Chinese government in order to fully legitimize and smoothly operate the NEO system.

In July 2018, the cost of NEO dropped significantly, which was due to the general sinking of the cryptocurrency market. As of today, NEOs market cap is $ 892,607,401.

The project is currently being actively improved. OnChain is constantly building relationships with other participants in the cryptocurrency market and the blockchain technology sphere. In particular, there is close cooperation with companies such as Agrello, Coindash, Bancor, and many others.

In June 2019, NEOs main network was updated. The modernization, according to the creators, has significantly increased the stability and performance of the network. It is assumed that the newly developed algorithm will be one of the key milestones on the way to the implementation of the new NEO 3.0 blockchain, which is expected to be released by 2020.

In July 2019, it became known about the conclusion of a cooperation between NEO and another Chinese blockchain project Ontology. As a task of cooperation, the development of an open cross-chain platform was announced, which will become the basis for creating the Internet of the latest generation. According to the developers, NEOs task in this project is to create protocols and elements to provide a full range of cryptocurrencies, and Ontology will develop a decentralized identification system.

It is stated that NEO and Ontology will not make changes to their software codes to integrate with the created platform. The release of the project is scheduled for the last quarter of 2019. After this statement, the value of the NEO cryptocurrency has grown by more than sixteen percent.

According to many experts, the project has great potential and is capable of creating serious competition in the future with Ethereum, a recognized leader in the development of smart contracts.

Distinctive features of NEO from other cryptocurrencies

By its very nature, NEO is an unusual cryptocurrency. Moreover, the role of cryptocurrency for the project is secondary. First of all, NEO is a platform for developing smart contracts . The fundamental difference from other cryptocurrency projects is determined by the main goal of the NEO development - the creation of a radically new financial system based on the combination of the virtual and real economies.

Based on the foregoing, the main difference between NEO is that, first of all, it is an innovative economic project, and cryptocurrency only plays the role of a means to ensure the implementation of the idea of a unified virtual-real economy.

As mentioned above, NEO operates on principles similar to those on which Ethereum is built. The NEO network is based on smart contract technology and their provision through internal virtual coins. Just like in Ethereum, the NEO system makes it possible to deploy decentralized applications and carry out the initial placement of electronic currency. The NEO and Ethereum platforms have a very similar philosophical foundation.

Commission for internal operations in the NEO network is paid with internal tokens. The name - GAS, as well as the functioning algorithm were also copied from Ethereum. The tokens in circulation are issued by the company itself. You can only mine GAS. At the same time, mining is only possible for a user who has a certain amount of NEO tokens. The more NEO he owns, the more GAS he gets.

Despite the fact that Ethereum was the first in the smart contract market and today occupies a leading position, the NEO system already at the release stage did not have many of the negative qualities inherent in Ethereum. Moreover, the Chinese project came out with a number of advantages.

The main differences from Ethereum and other cryptocurrencies are:

1. NEO primarily focuses on the Chinese market, which according to many experts is a huge competitive advantage. The NEO platform does not set itself the task of defeating other cryptocurrencies in the global market. First of all, it seeks to take over China. And as the vast experience of many Chinese companies shows, this strategy is fully justified in the fight against foreign competitors. Unlike most other cryptocurrencies, NEO is initially aimed at cooperation with the PRC government and is even ready to provide it with some opportunities for control and regulation in order to receive certain preferences in return. According to the creators, the main goal of NEO is to provide a real economy, which implies the need for regulation. According to Da Hongfei, serious business players looking to do business on a blockchain platform should be willing to sacrifice privacy in favor of security and control.
2. Transaction processing speed. The NEO system has the capacity to process over a thousand transactions per second. This is provided by OnChains own consensus algorithm called Delegated Byzantine Fault Tolerant. In comparison, the technology used in Ethereum only processes fifteen transactions per second. Moreover, it is more expensive and associated with a huge energy consumption.
3. Support for many programming languages. Smart contracts and decentralized projects in the NEO system can be developed using most of the most popular languages, which allows more users to work on this platform. This approach significantly increases competitive opportunities in the global market . To work in Ethereum, you need to know a specific programming language - Solidity.
4. Support for two virtual currencies. The functioning in the NEO system of not one, but two domestic currencies at once gives it great adaptability. The NEO currency, as conceived by the developers, is essentially the platforms shares. They cannot be divided into components, so they are stored and translated in integer values. In order to pay for transactions, provide smart contracts, as well as to pay for other on-net operations, NeoGAS coins (or simply GAS) are used. This approach, in particular, allows for extremely low cost of commission.
5. Quantum security. It is assumed that in the future, after the creation of quantum computing equipment, the entire cryptocurrency market will face a serious threat. It is expected that new computers will be able to crack the cryptographic algorithms that are the basis of blockchain technology at high speed. According to the creators of the NEO platform, they have already developed an anti-quantum protection mechanism called NeoQS, which other cryptocurrency projects lack.
6. The purpose of the project. The NEO system, first of all, performs the task of providing a smart economy and provides the ability to digitize tangible assets and record them in the blockchain, with a guarantee of their safety and constant unhindered access.

How NEO works

The NEO system is built on the blockchain technology on which most virtual currencies and, in particular, Bitcoin are based . Blockchain technology makes it possible to exchange assets without the involvement of a third party, intermediary or controlling entity. For example, we can cite sports betting on the outcome of a certain match. Two participants place a bet of one hundred rubles, each on his own team. In the current reality, participants can proceed in accordance with one of the following three options:

• They can simply rely on each others honesty and integrity. In this case, the participant whose team loses will simply give one hundred rubles to the winner. In the event that the participants are really honest, this option is not bad, but it leaves too many opportunities for unscrupulous people who simply refuse to give the winnings.
• The second way is to conclude an agreement. Signing a formal agreement imposes additional obligations and contributes to the implementation of the main ones. However, if its conditions are violated, the injured party will have to go to court, pay the costs and hope for a favorable outcome of the case, which may not come. Considering the small amount that caused the dispute, this option is not the most optimal.
• Participants can turn to a disinterested entity who will act as an intermediary. In this case, each of them must give their stake in the amount of one hundred rubles to this subject, who will then transfer the money to the winner. However, the intermediary can also be unreliable and is also entitled to a fee for participation.

It turns out that none of the above solutions is optimal and each involves certain risks or additional costs.

The main advantage of blockchain technology is that it implements the third option, only completely securely, inexpensively and quickly, since it excludes the participation of third parties in the transaction.

Blockchain, or blockchain, is a system that enables a network of a certain number of computers to provide a single secure data ledger. To carry out transactions on the blockchain, an electronic wallet is required, in other words, a special program through which the users financial funds are stored. The security of this wallet is ensured by means of special cryptographic methods that use a unique pair of different but related keys - public and private.

A message that has been encoded with a public key can only be decoded and read by the user who owns the corresponding private key. The converse is also true: when encrypted with a private key, the message can be read using the public key.

If the user wants to transfer his funds to another network participant, he encrypts the corresponding message using the key of his own wallet. Since the key is known only to the user, only he has access to his own funds on the blockchain. Each blockchain node has the ability to verify that the transaction is requested by a specific user by decrypting the data using the public key.

When a user encodes a transaction request with a private key, an electronic signature is generated that is used by blockchain nodes to identify and authenticate transactions. An electronic signature is a string of characters resulting from a transaction request and a users private key. Therefore, it cannot be used to conduct other transactions. When you change any character in the request sequence, the electronic signature is converted. This means that it is impossible to change requests or the amount of funds transferred by anyone other than the wallet user.

To transfer funds, the user must confirm that he has a key from a specific electronic wallet, since a key is required to send a key to encode the transaction request message. Since the message is transmitted only after encryption, no outsider will ever need to reveal the private key.

The management of the OnChain company emphasizes that the key goal of the NEO project is not just the release of another virtual currency, but the construction of a fundamentally new model of economic relations. This model, called by the developers Smart Economy ("smart economy"), consists of three main elements:

• platforms for the development and implementation of smart contracts;
• virtual assets;
• virtual identification.

All of these elements have been embodied in NEO technology.

For example, a user of the system can digitize documents for real estate and sell them for cryptocurrency. The advantage is that the participation of third parties is completely excluded in such a transaction. According to the creators of NEO, any tangible asset can be digitized through the system: precious metals, real estate, vehicles and much more. To do this, it is necessary to link objects of the real world with their virtual counterpart through digital identification. For this, a smart contract is created.

On-net transactions can be carried out by paying the cost of a commission. Payment is made through the intranet currency - GAS, which was developed specifically to ensure intra-system transactions.

NEO tokens cannot be mined, they are issued by the developers themselves. It is assumed that the issue is limited to one hundred million coins. Half of them were released into circulation during the initial token offering. The other half is with the developers. Users can mine GAS with NEO coins on their e-wallet. The number of coins in the wallet directly affects the amount of GAS mined. Currently, two and a half thousand tokens on the electronic wallet add one GAS coin every day. That is, the creation of coins occurs automatically.

Despite the fact that NEO is often called the "Chinese Ethereum", this project has many advantages that Ethereum cannot boast, although it occupies a higher position in the cryptocurrency rating. The Chinese project is more convenient and has a much wider range of possibilities, which suggests that in the future it may bypass its Western competitor.

Advantages and disadvantages

At this stage in the development of the cryptocurrency market, we can say with complete confidence that the NEO project has achieved tremendous success in a fairly short period of time, both in its homeland - in China, and abroad. The platform was developed by a highly professional team consisting of people with great authority in the world of virtual currency. All this leads to a rather high place in the ratings and a considerable amount of market capitalization. And although the NEO cryptocurrency still faces many challenges and there are many areas for further improvement, a number of significant advantages of the Chinese project can already be identified. Some of the obvious benefits include:

1. The use of a special dBFT algorithm, which greatly simplifies the issue of new coins, without the huge costs of purchasing and maintaining equipment and paying for resources.
2. The possibility of using various programming languages for the development of smart contracts allows a wider range of users to be involved in the network, which allows the system as a whole to develop at a faster rate.
3. An excellent level of security provides reliable protection against most attacks on the system, which makes it one of the most stable in comparison with most other projects based on blockchain technology. In addition, the creators of NEO have developed a special protection system NeoQS that can resist attacks using quantum computing equipment.
4. Extremely low cost of commission and huge speed of transactions and execution of smart contracts. In theory, the maximum possible speed of the system is ten thousand transactions per second. However, even a practical one thousand is a much higher rate of processing speed than those that most competitors can offer.
5. The ability to carry out cross-chain operations and create cross-chain platforms.
6. Limited issue of tokens. There are one hundred thousand NEO coins in the system and they will not be issued anymore. The issue of GAS coins as a reward for certifying transactions is also limited. In total, one hundred million GAS can be issued, which appear eight coins for each newly created block. The reward for creating new blocks decreases by one coin every year. Thus, the reward will be reduced until the last of the hundred million coins is released. It is assumed that imposing a limit on the issuance of tokens prevents inflationary processes and increases the value of both NEO and GAS.
7. NEO operates in a completely legal manner. The creators of the project are largely concerned about the legal side of their activities and consider cooperation with the state a priority. There is an opinion that this is rather a disadvantage of the NEO system, since it deprives users of privacy and implies accountability for operations. However, given that many of the worlds states are currently exploring the possibilities of controlling and regulating the cryptocurrency market, the approach taken by NEO can be considered very far-sighted. In particular, China has very strict requirements for personal identification in any financial transactions. Consequently, while it is currently prohibited to conduct initial offerings of virtual coins, there is a high probability that they will be allowed in the future. And if this happens, legally transparent and reliable companies will enjoy much more confidence.
8. Extremely strong and highly skilled team of creators. According to a number of experts, no similar project could boast of something similar at the beginning of its work. In addition, the company has many close ties with established IT giants such as Microsoft.

Despite its many strengths, NEO also has a fair number of weaknesses. This is largely due to the fact that, in essence, NEO is a private blockchain technology platform with open source code. Among the main disadvantages of NEO, the following should be highlighted:

1. The NEO system is centralized as all blockchain nodes that authenticate the data in the blocks are owned by the private company OnChain. And although the system contains a theoretical possibility for users to create independent blockchain nodes, in practice it has not yet been implemented.
2. Most of the NEO and GAS coins belong to the creators of the system themselves, which gives them very significant leverage over the cryptocurrency market. This circumstance is an important deterrent to investing in NEO by those who earn money on the difference in cryptocurrency rates.
3. The dBFT consensus algorithm is used exclusively in private blockchains and is not used in any of the general ones. Of course, if the blockchain nodes that authenticate the information about the transactions are owned by the company, there can be no question of fraud. However, this means that the blockchain is private and centralized. It turns out that there are no security guarantees for public blockchains.
4. Lack of user confidentiality, which follows from the very purpose of the NEO system - linking the tangible assets of identified participants to electronic counterparts and creating a unified virtual-real economic system. Accordingly, in the case of NEO, the principle of financial independence proclaimed by most cryptocurrencies does not work.

Does NEO mining exist?

As mentioned above, direct mining of NEO tokens is not provided in the system. NEO coins play the role of shares in the company, most of which are owned by the creators. The mining opportunity exists, but it only applies to another on-net currency called GAS.

GAS is a coin designed specifically for all settlements within the network (payment of commission, payment of smart contracts, initial placement of tokens, etc.). The existence of a second intranet currency makes it possible to protect the system from overloading empty transactions.

In order to mine the GAS cryptocurrency, the user needs to have a certain amount of NEO coins on the electronic wallet. The more NEO a user owns, the more GAS coins are automatically credited to his account every time a new block is created. Moreover, unlike most other cryptocurrencies, the system itself generates new coins and does not require the use of complex and expensive equipment for this.

How can I buy or sell NEO?

As with other cryptocurrencies, NEO is traded on cryptocurrency exchanges. It should be said that since the beginning of its existence, the Chinese cryptocurrency very quickly gained fame and achieved success. If initially NEO was traded by only two Chinese cryptocurrency exchanges, now it is present in the lists of the most recognized titans of virtual commerce, such as Binance, Bittrex and many others. In addition to exchanges, you can buy or sell NEO in many online exchangers .

At the time of this writing, the NEO cryptocurrency is ranked eighteenth in the coinmarketcap rating with a market capitalization of $ 892,607,401.

The NEO to dollar rate is $ 12.65 per NEO. The NEO rate to the euro is 10.9 euros for one NEO, to the Russian ruble - 796.3 rubles.

In addition, it should be said that the GAS token can also be purchased or sold on cryptocurrency exchanges, and it also has its own rate and capitalization. Thus, the market capitalization of GAS is currently $ 21,120,766. The exchange rate against the dollar is $ 2.09 per GAS, against the euro - 1.86 euros, and against the ruble - 136.1 rubles per GAS coin.

Where to store NEO

In fact, there are three main ways to store cryptocurrency, which will be discussed below.

1. Keeping NEO on an electronic cryptocurrency exchange

This method is the most common and generally the first one that comes to mind for most users. This storage method has several advantages, such as:

• simplicity of operations with assets;
• the convenience of this storage method;
• it is possible to carry out transactions with several assets at the same time.

But, despite the obvious advantages, NEO owners should take into account the significant difference between this cryptocurrency and others, which forces them to take into account a number of factors:

• There are not very many platforms on which you can store NEO. The largest cryptocurrency exchanges trading NEO, Bittrex and Binance, have restrictions on new user registrations. Of course, there are other, not so large exchanges, but they cannot boast of a large NEO turnover.
• The specificity of the functioning of the cryptocurrency exchange in relation to NEO is that when storing funds on it, the user does not receive GAS, since they are issued within the NEO network.

Given these circumstances, we can conclude that storing NEO on cryptocurrency exchanges is not the most optimal way. However, it should be noted that this specificity is unlikely to become a stumbling block for a user who, first of all, intends to make money on the difference in rates with many electronic currencies.

Storing NEO on e-wallets

There are many e-wallets that can store NEO cryptocurrency. Of course, there is also some specificity here. Firstly, few wallets can boast of great reliability. Secondly, when choosing a wallet, you need to make sure that in addition to NEO it also supports GAS, which is certainly more convenient.

To date, the Neon Wallet, an independent project created by a group of developers called City of Zeon, has proven to be the most reliable. In addition to the electronic storage of NEO, it serves as an independent expert on the improvement of cryptocurrency and enjoys the support of a large community.

Getting started with Neon Wallet is easy. The first thing to do is to go to the official NEO website and select the specified e-wallet, as well as select the operating system used. The site supports Windows, Mac and Linux. Next, the user creates a wallet and chooses a password (it is advisable to use as complex as possible and one that is not used anywhere else by the user). After completing registration and creating an electronic wallet, the system provides the user with all the basic information about the personal account:

• a password invented by the user that provides access to the account;
• e-wallet address, which is required to carry out transactions between users and store newly created GAS coins;
• coded key for working with the wallet;
• the private key, which is essentially the users wallet. It stores information about the number of NEO and GAS coins that the user has;
• QR codes with public and private key addresses.

After that, the user comes up with an identifier and can start working with an electronic wallet.

Cold storage of NEO cryptocurrency

Regarding NEO, cold storage of a cryptocurrency usually means paper storage. It should be said that this method is used exclusively for long-term storage, in which the actual freezing of assets occurs. For a user who intends to make money on the difference in rates and expects favorable conditions for buying or selling, this method is definitely not suitable. In addition, it must be said that in this case, as well as when using cryptocurrency exchanges, the owner of NEO will not receive GAS. However, all these disadvantages are compensated by the highest reliability of storage of funds.

To generate keys for cold storage, use the Ansy online service that provides this type of service. At the same time, it is desirable to have a neon wallet, so that you can create a non-paper wallet using Ansy.

There are two ways to create cold storage keys:

• conversion - converting the users own passphrase into a QR code;
• generation - the system creates a completely new QR code.

More preferred from a security point of view is the second method, which provides better protection against hacking.

To create a cold storage key, the user needs to enter their private key, after which the system generates a code that can be printed on paper.

It is advisable to print several copies and keep them in a safe place that guarantees reliable protection against falling into the wrong hands.

The future of NEO cryptocurrency

For a long time, the media have been discussing rumors that the national Chinese cryptocurrency will be created on the basis of the NEO blockchain. Accordingly, with government support and official status, the value of the cryptocurrency should soar to unprecedented heights. Whether or not it is true, several local activities can be noted to date, such as the launch of a special application to optimize public services and to electronically verify the identity of users in Guiyang City (Guizhou Province). In addition, some foreign government agencies cooperate with OnChain, for example, the Japanese Ministry of Economy and Trade.

NEO is able to offer its own corporate blockchain to government agencies and representatives of large businesses. In addition, the company has signed partnerships with such giants as Alibaba for the provision of e-mail certification services and Microsoft, with which it has extremely close cooperation in many areas.

The developers carry out continuous active work to improve the protection system. So, in August 2018, it became known about the cooperation of NEO with the Certik Internet platform. This project carries out checks of cryptocurrency platforms, as well as sites for the development of smart contracts. The goal of the joint work was named to improve the security of financial assets of users and the NEO network in general. Certik professionals performed audits and developed some customized approaches to digital confirmation of assets in the NEO system.

According to the creators of the project, they are not at all worried about the decline in cost that has taken place recently. They are confident in the inevitable rise in the rate and consider their key task today to develop and launch applications for enterprises in the real economy.

According to experts from such an authoritative agency as APECON, the NEO rate will remain at the same level in the next two years. The cost increase is expected not earlier than by 2021. According to them, the NEO rate in December this year will be in the region of 5.13-5.91 US dollars, which is almost 40% lower than the current cost. An increase to the current figures of ten or more dollars, they predict by 2021, and twenty dollars for one NEO by the fall of 2022.

Anyway, it is safe to say that there is a fairly unanimous opinion about NEO in the cryptocurrency world. Almost everyone is confident that the project will be successful. The biggest concern is the fact that more than half of the NEO coins in existence in the world are owned by company executives. According to Da Hongfei, in the very near future, all the coins available to developers will be sold to other users, and the system will truly become decentralized.

In the event that all the far-reaching ambitions of the developers are realized, the NEO system has great potential to enter the top five of the worlds leading cryptocurrencies. In addition, if the Chinese government really decides to legitimize the cryptocurrency and implements large-scale government blockchain projects, the value of NEO will increase many times over. Considering this purchase of coins at the current relatively low price, it seems to be a completely rational step.