021 – The NEO cryptocurrency is one of those examples of successful cryptocurrencies with high market demand. In fact, it has managed to place among the top of the ranking of the most popular cryptocurrencies at the level of Ethereum itself.
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Better known as the Chinese Ethereum, it has the ability to provide more than a currency, an entire Blockchain network platform. This platform makes it easy for developers to create and execute smart contracts, which were originally created by Ethereum. It also enables the creation of decentralized applications. The NEO cryptocurrency was conceived as a large-scale blockchain project, whose function is to create a smart economy capable of automatically identifying and digitizing business processes. More than a currency, NEO is a large ecosystem.
NEO is not simply a cryptocurrency. It is a platform with open source Blockchain network technology, which operates with a decentralized proof-of-interest consensus mechanism tolerant to Byzantine Fault. It is China’s first digital currency and is considered a direct and close competitor to Ethereum. In fact, many call it “the new Ethereum or Chinese Ethereum.” However, despite their great similarities they maintain certain differences.
NEO, formerly known as AntShares is defined as an open source decentralized Blockchain application platform. Founded in 2014 by Da HongFei and Erik Zhang, it was originally developed to create a Blockchain application platform. Also for the purpose of creating a smart contract system for issuing and managing digitized assets called NeoContract. Their project vision is based on establishing a smart economy through the implementation of smart contracts based on Blockchain technology.
How does NEO work?
The NEO network operates with a decentralized proof-of-stake algorithm among several centrally approved nodes, called Delegated Byzantine Fault Tolerant (DBFT). It is known to be a Byzantine Fault Tolerant consensus mechanism. In NEO, almost 2 million blocks are created annually. That is, on average, one block every 15 to 20 seconds. Currently this network chain is capable of processing 1000 transactions per second, a good number for an open and decentralized network.
However, it is far short of its maximum potential of 10,000 transactions per second, according to its developers. What differentiates DBFT from the well-known PoW and PoS is that this one does not support creating parallel branches on the blockchain, nor canceling transactions after verification. This greatly optimizes the security of the network. In addition, the operation of the algorithm requires the cession of its right to confirm transactions and create blocks by token holders in favor of the so-called accountant.
What is its future in the cryptocurrency market?
NEO is an entirely open source Blockchain platform and is the first one developed in China with the backing of the Chinese government. This makes it the most popular digital currency in China, which is one of the largest cryptocurrency markets globally. NEO, is delivering on Ethereum’s promise to provide a platform that enables the development of decentralized applications that outperform Bitcoin (BTC). Thanks to this, NEO is becoming a favorite among developers, investors and users.
The project system that NEO offers to its users consists of three main aspects:
- A platform that allows issuing and activating smart contracts.
- A peer-to-peer environment that enables the direct exchange, without the participation of third parties, of digital assets and any cryptocurrency.
- A digital identity platform (physical assets and identity).
For these and other reasons, NEO should be taken more as a bridge between the real and virtual economy that works on the basis of Smart Contracts.
Advantages of NEO
NEO, bundles and provides its users with a number of advantages that in many cases and for some, are far surpassing Ethereum.
- The dBFT consensus protocol does not support the creation of parallel Blockchain branches nor does it support the cancellation of transactions already sent.
- Offers a number of innovative solutions, including digital identification, cross-chain environment and protection against quantum hacking.
- High transaction speed, Neo is included in the list of projects that have high network speed.
- The creators are developing not only a currency that will be used only as a means of payment, but a whole ecosystem, fully dedicated to the smart economy.
- Support for popular and common programming languages makes the Neo platform more accessible. No need to learn a special programming language to write a smart contract.
- Unlike PoW or PoS protocols, its consensus protocol offers greater scalability.
But not everything is perfect and we have to name some of its disadvantages, as well.
- The first and perhaps, the most important disadvantage is the fact that its decentralization is in question. Since, all nodes remain the property of NEO and some of the associated companies. In fact, its developers have already openly pronounced themselves regarding the actual decentralization, stating that it is out of the question for the time being. But it is not the only thing.
- We also have that, in order to use the network platform, real personal data must be provided and confirmed with documents. In other words, the user’s identity must be confirmed, completely eliminating the benefit of anonymity that many users prefer. In addition, there is the disadvantage of the indivisibility of your token, since transfers of less than 1 NEO cannot be made.
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