NEO is oft considered Red china’due south response to Ethereum. Its goal is to create a smarter economy by bridging the gap between digital and traditional assets. NEO is a blockchain platform that facilitates the development of digital assets and smart contracts. The platform uses two different tokens (similar to Ethereum): the first is besides called NEO, the second is GAS. Both tokens accept specific uses on the NEO platform, as we’ll run across in this guide.
This information should non be interpreted equally an endorsement of cryptocurrency or whatsoever specific provider, service or offering. Information technology is not a recommendation to trade.
|Icon||Symbol||Initial release date||Algorithm blazon||Max. supply|
|NEO||August 2014||Northward/A||100 million NEO|
|GAS||August 2014||Northward/A||100 million GAS|
The primary aim of NEO is to become a digital, decentralised and distributed platform for not-digital assets, through the utilize of smart contracts (see below for a more detailed wait at smart contracts). This means that its goal is to become a digital alternative for asset transfers that are currently non-digital. An example would be paying rent using a smart contract that triggers automatically once a month, instead of setting up a bank payment.
The two native tokens of the NEO platform serve unlike purposes:
- NEO tokens represent the ownership of the NEO blockchain. They are used to create blocks and manage the network, and when you hold NEO in your wallet y'all’ll be rewarded with GAS tokens.
- GAS tokens give you lot the right to use the NEO blockchain. Much like Ether to the Ethereum network, GAS is the fuel that powers transactions in the NEO system.
The NEO platform, with its system of NEO and GAS tokens, is different from Bitcoin and many other cryptocurrencies. Three of the unique differences that set it apart are:
1. NEO indivisible units
The smallest unit of NEO volition always exist 1 share, and this cannot be divided in the same mode every bit other coins like Bitcoin. The master reason for this is that, simply similar shares in a visitor or service, NEO cannot be divided into fractions. This might get a problem in the future if NEO’south value increases, only exchanges already take their ain methods of dividing the coin.
Money fractions at exchanges. How do they do information technology?
Exchanges are currently trying to figure a way around the problem of NEO being indivisible. The answer they have might not be the best ane, but information technology’south the best we have: You lot’ll be allowed to trade fractions of NEO as long every bit you keep them inside your commutation wallet. If you lot transfer them to your NEO wallet, those fractions will remain on the exchange and won’t be moved to your individual wallet.
For example, you are not technically allowed to ain 5.32 NEO. Yous either have 5 NEO or 6. But exchanges will allow you exchange BTC for five.32 NEO without issue. If yous keep those 5.32 NEO in your exchange wallet, y'all should accept no problem exchanging them for another cryptocurrency. However, if you transfer the 5.32 NEO y'all ain to your actual NEO wallet, you will finish up with 5 NEO, and the 0.32 NEO volition stay on the substitution.
two. Generating GAS
The biggest differentiating feature is the two-tiered arrangement of NEO and GAS. Although GAS can be bought and sold on a handful of exchanges, users typically buy NEO tokens, which correspond their stake in the future of the platform. The benefit of the 2-tier arrangement comes into play the moment you lot transfer NEO to your NEO-compatible wallet.
While belongings NEO, you start generating GAS automatically as more blocks are generated by the construction of the blockchain. With every new cake generated, eight GAS are distributed for all 100,000,000 NEO in existence.
This is similar to Ethereum, simply very different from mining in Bitcoin in that the value of GAS is decoupled from the value of NEO. This is in dissimilarity to Bitcoin, where the value of a Bitcoin mined is the aforementioned as the value of a Bitcoin purchased.
GAS is used to pay for transaction fees on the NEO network.
three. Smart contracts
Another important factor that sets NEO autonomously from Bitcoin is the apply of smart contracts, best explained using a existent-world scenario:
How do smart contracts work?
Smart Contracts are the digital equivalent of holding coin in escrow with a third party, with the intention of releasing the funds some time in the future. Suppose I take to pay you 0.002 BTC in three months’ time. A contract is created and entered into the blockchain that triggers in three months’ fourth dimension, every bit long equally I’ve deposited the 0.002 BTC required. Once the contract executes, the money is transferred from my wallet to yours and is automatically witnessed and verified by regulators on the blockchain. However, information technology’s worth noting that, at the time of writing, the fee for deploying a smart contract on the NEO network was 500 GAS.
In gild to become a wallet and commencement generating GAS, you lot tin simply buy NEO and concord it in a compatible wallet. This is substantially the same as holding a pale or shares and existence paid dividends. You tin purchase information technology directly with fiat currency on a handful of exchanges, and y'all can even commutation Indonesian rupiah (IDR) straight for NEO. However, you can as well buy NEO with Bitcoin, Ether, Litecoin (LTC) and other cryptocurrencies.
To get started, review the following list of exchanges and decide which one you lot would similar to apply. Yous tin can too check out our guide to buying NEO for more data.
How to buy NEO
Choose an exchange.
Discover an commutation that lists NEO in one or more currency pairings and sign upwardly for an business relationship. Y'all’ll need to provide your email address and ready upwards a password, while some exchanges will also request your name, address and proof of ID before allowing you to trade.
- Deposit funds. Most platforms simply allow crypto-to-crypto trading, then you’ll need to deposit BTC, ETH, LTC or another money that’s listed in a pairing with NEO. You lot tin can buy these popular coins from exchanges that take credit card payments or banking company transfers, such as Luno.
Navigate to the exchange section of your account and search for the currency pairing yous want, such as BTC/NEO or ETH/NEO. Y'all can and then select a market or limit social club, specify the amount of NEO you want to buy or the amount of currency you want to spend, and place your order.
In one case the transaction has been completed, you’ll have NEO tokens sitting in an online wallet created for you by the crypto commutation. This is non platonic as with a handful of exceptions, y'all can just generate GAS when NEO is in a wallet that you ain. So, if your goal is to generate GAS, information technology’southward best to consider transferring your holdings to a NEO-compatible wallet.
What’s the deviation between an commutation wallet and a local one?
Cryptocurrency exchanges permit you to continue your coins in an online wallet fastened to your trading account. This wallet looks and works the same as a wallet installed on your computer, but the main deviation is in the underlying structure of how it works.
It’s of import to be aware that your exchange wallet does not technically have an address. The exchange has its own wallet, a part of which it’southward reserving for you lot, just the wallet belongs to the exchange and is never really yours. And then, in situations like this where keeping NEO in a wallet gives you some sort of bonus, it’southward the exchange that will get that GAS. With this in mind, it’due south worth moving your tokens to a wallet that you own, whether that is a hardware, desktop, mobile or web wallet.
Every bit a concept, NEO is relatively complex for most users, peculiarly those new to the earth of cryptocurrency. This is i factor which might hamper the adoption of the platform, while there are as well other considerations:
No share fractions
One common complaint about this cryptocurrency is that NEO are indivisible. Coins like Bitcoin avert this trouble by having their coins divisible by up to 8 decimal places (the so-called “satoshi”). This means that fifty-fifty as Bitcoin gains in value, users can withal purchase coins that are inside their budget (i.e., fifty-fifty though 1 BTC might price U.s.$8,000, i might even so buy ten μBTC for US$0.08). This is not something you tin do with NEO. If 1 NEO costs US$1,000, you will have to shell out a minimum of The states$1,000 to get in.
Slow to synchronise compared with other currencies
The second biggest complaint users have most the platform is that the blockchain is extremely slow to synchronise updates, for instance when transferring NEO from an exchange to your wallet. This might be fixed in the futurity but, every bit it is at present, it would be about impossible to pay for any large value transactions requiring you to wait for confirmation.
Equally interesting a concept as NEO is, there’south only one certainty in the futurity of NEO: no-one knows exactly where it’s going. Many speculate its value will exist loftier in 2018, but others are not so certain. Later on all, while the sudden growth in NEO to in a higher place US$40 in August 2017 was impressive, it’s nonetheless very much a mirror of the explosive growth of Bitcoin, and NEO tumbled dorsum down to effectually US$23 by September 2017.
Information technology turned around in early on 2018, and peaked to a new high of over Usa$80 at the outset of the year.
I reward of NEO is that the Chinese regime has embraced the platform, while simultaneously distancing itself from other cryptocurrencies like Ethereum and Bitcoin. This has the potential to both legitimise the NEO platform and alienate it from the western world.
The future of NEO is still very much in flux, and a lot remains to exist seen.
Cryptocurrencies are speculative, complex and involve pregnant risks – they are highly volatile and sensitive to secondary activeness. Performance is unpredictable and by performance is no guarantee of future functioning. Consider your own circumstances, and obtain your own communication, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites earlier making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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