- NEO wants to leverage digital assets, digital identity, and smart contracts to power the smart economy.
- Da Hongfei and Erik Zhang are the founders of NEO.
- NEO project received capital worth over $5 million in it’s two crowdsales campaign.
NEO is one of the leading names in the cryptocurrencies space today. One can’t be a part of the cryptocurrency industry and never heard about NEO. We are sure that you must have had a question when you read about NEO first – What is NEO? This article will help answer this question for you.
The NEO project wasn’t always known as NEO. It used to be known as Antshares in the past. Many people also call NEO the “Ethereum of China.” There’s no doubt about the fact that NEO has some similarities with Ethereum, but it has some unique features as well.
In this detailed guide, we will learn about NEO in detail and know about its features. Let’s start with some history first.
What is NEO? – The Historical Aspect
NEO is a non-profit organization with a community-based blockchain project. They digitize assets by leveraging blockchain technology and digital identity. The smart contracts help NEO automate the management of digital assets. They aim to build a smart economy with a distributed network. You can find the following statement on their website, and it sums up what NEO wants to achieve:
“Digital Assets + Digital Identity + Smart Contract = Smart Economy.”
The founders of NEO are Da Hongfei and Erik Zhang. They are also the CEO and CTO of NEO. The interesting thing about them is that they are also the founders of a company known as OnChain, which was ranked among the KPMG’S Top 50 Fintech Companies in China in 2016 and again in 2017. It is a well-known R&D company based in Shanghai. NEO’s founders began their research on the NEO project in 2014.
NEO raised capital for the project through crowdsales, and they did not stop at one crowdsale campaign. They raised capital for the NEO project through two crowdsales campaigns. They sold NEO tokens worth $550,000 in the first crowdsale campaign, and it lasted for 10 days. A total of 17.5 million NEO coins were sold in the first campaign.
The second crowdsale was even more successful as they sold all the remaining 22.5 million NEO tokens throughout the campaign. They raised $4.5 million in total from their second crowdsale campaign.
NEO – How Does it Work?
The consensus algorithm powers every cryptocurrency in the world. Let’s talk about Bitcoin for a second. You see, when it comes to Bitcoin, its consensus algorithm is proof of work. The issue with proof of work is that it consumes lots and lots of energy. Thus, it leads to lower transactions compared to other cryptocurrencies.
In the case of NEO, they have a consensus protocol that is specifically created for NEO. It is known as Delegated Byzantine Fault Tolerance, also known by its short name – dBFT. It is very interesting in terms of the operating process and is unique.
Every NEO token holder has a vote, and they can use their votes to select a Consensus Node. Now, this Consensus Node manages the NEO blockchain. Its because that’s their responsibility after they are elected by NEO token holders. The Consensus Nodes receive all the transactions that NEO holders send, and then, the Consensus Node bundles all the transactions and create a block of it.
The verification of current blocks is done by a Consensus Node that is randomly chosen for the task. After verification, they will send the block’s ledger to the rest of the Consensus Nodes on the network. The block is closed if two-third of the Nodes agree. But if the consensus reached is less than 66%, a new and different Consensus Node is chosen. It is tasked with submitting its block for verification, and this way, the whole process begins again.
Are you wondering how you can become a Consensus Node? For that, you must hold a certain amount of GAS. Additionally, you must have a dedicated internet connection. There’s a caveat here – The final decision is in the hands of the NEO community. If they believe someone else will do a better job as a Consensus Node then they will vote for him.
What Makes NEO Unique?
NEO stands out from the rest of the cryptocurrency projects in the aspect of having a central council. This central council decides what projects can be built on the NEO platforms and what projects cannot. They also make decisions on how the remaining 50 million NEO tokens should be spent.
NEO’s Price Movements
On September 9, 2016, each NEO token was worth $0.550467. It did not see much growth until August 15, 2017, as each NEO token touched $45.74 on this date. The next considerable rise in the prices of NEO tokens came on December 19, 2017, when each NEO token was worth $80.68.
NEO saw over 200% growth within one month from December 19, 2017, when it was worth $178.57. Then came a downward slide in the prices of NEO, and by April 9, 2018, each NEO token was down to $53.66. It recovered a bit by May 2, 2018, with each NEO token’s worth equaled to $84.02.
Since June 2018, the NEO prices are under constant decline with a limited number of small rises in its prices. As of now, each NEO token is worth $20.41, which is a far cry from the highs of $178 that NEO was worth in 2018.
The Path Ahead
The prices of NEO tokens haven’t seen much of a rise for some time now, but it doesn’t mean that its technical robustness is questionable. To be fair, NEO’s approach looks interesting. It has a lot of potential. NEO can also be adopted by the Chinese authorities. We may also see NEO getting adopted by other foreign governments who do not have any affinity for cryptocurrencies that are decentralized and anonymous.