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NEO Cryptocurrency – The Ultimate Guide
About this guide: Our NEO cryptocurrency guide will tell you everything you need to know. We’ll explain what it is, what NEO does and give our opinion on the project. We do urge caution before making any cryptocurrency investments and encourage you to do your own research.
What Is NEO Cryptocurrency?
Declared by many as ‘The Ethereum of China’ or ‘The Ethereum Killer’, NEO is a ‘Smart Economy’ platform. What on earth is the smart economy? It is the digitalization of assets through the use of smart contracts. These digital assets will then be self-managed and can be distributed or exchanged within the NEO network/ecosystem. The ecosystem will also be able to digitize identities which is crucial when it comes to transferring digital assets from one person to another and issuing digital asset certificates (as proof of ownership).
Digitalization of assets is done through apps built on the NEO blockchain and make smart contracts much more useful. This means that smart contracts can be used to transfer ownership of real-world items. Examples of items that can be digitized include: property, cars, gold, oil, food that you would buy in the supermarket and even things like Pokemon cards. Any item that can be digitized can then be traded within the NEO ecosystem in a trustless way. Transfers will be done at a significantly lower cost than previously possible (no need for expensive lawyers), can be done in seconds and across borders.
The Smart Economy can truly change the world. The best part is that NEO is ensuring that digital asset certificates are compliant from a regulatory standpoint. This is essential for the project’s smart economy to function properly.
Both NEO and Ethereum are offering developers the tools to build decentralized applications on their own blockchains, the ability to launch ICOs on their platforms and offer smart contracts. The difference is that Ethereum is reacting to the new demands of the blockchain economy, then making a solution. Neo is anticipating future demand and is building or partnering up with other crypto project teams that offer solutions using their blockchain.
What Is The Neo Council?
The NEO Council is a group made up of the founders of the project. They are responsible for making strategic decisions, technical decisions and driving the project forward. The power of the Council does have a check and balance, as NEO holders can vote on network issues. This means investors in the project can have a say.
The project’s ecosystem is managed by the Council; they help decide which projects can join the network and even fund crypto projects they think can add to their ecosystem. To achieve objectives like this, fund marketing and ensure the platform has the best developers, the NEO Council retained 50 million coins at ICO. Essentially, the Council has well over two billion dollars at their disposal, which will be used to create their version of the new ‘smart economy’.
The 50 million coins held by the NEO Council (out of a total of 100 million) were allocated as follows:
- 15 million coins to invest in other crypto projects that use NEO.
- 15 million coins are kept in reserve for contingency.
- 10 million coins to be used to incentivize developers in the ecosystem.
- 10 million coins to be used to incentivize Council members and project developers.
The Council essentially guarantees that the project has direction. The structure and leadership model does show that cryptocurrency projects are becoming more professional. We really do feel this is required for cryptocurrency to be taken seriously by outsiders.
There is no doubt that NEO has an impressive ecosystem and is already well on the way to creating the smart economy they envision. It includes everything from different types of exchanges, artificial intelligence, travel, trust on the blockchain, infrastructure, identity digitalisation, regulatory compliant checks, research, scaling solutions to content platforms.
As NEO powers all the applications in the ecosystem, application growth should be great news for the coins price through the creation of network effects. The way to think about NEO is that it is the backbone on which all these great applications are built on.
One important piece of the ecosystem that has not been mentioned on the graphic, is the ‘City of Zion’. They are a open source community of developers who work on improving NEO and have won many grants from the Council. The City of Zion have created things like the NEON Wallet, block scanner and have even developed the NEX exchange (one of the most anticipated ICOs in 2018). We have little doubt that this network of developers will play a big role in the future of the project and that they have already proved their worth.
It is important to remember is that the ecosystem is still in its infancy. The project does have a working product and therefore has an advantage over competitors such as EOS and Cardano. We have to accept that right now, Ethereum is the platform of choice for ICOs. We do expect NEO to start increasing its market share here throughout 2018.
The NEO Economy
There are two different coins:
- NEO Coin: You can think of as similar to a typical share in the stock market.
- The coin represents a right to manage the network and includes voting rights. In essence, this is ownership of the network.
- The coin pays you dividends! For every 10 NEO coins you own, you will get roughly 1 GAS token per year. Some exchanges will give you GAS automatically, but if you store your coins in a NEON wallet then you will certainly get your dividend. You can checkout your expected GAS reward on this calculator.
- The NEO coin cannot be divided by anything smaller than 1. The exception to this rule is if you are using a cryptocurrency exchange like Binance, where you can by fractions of a coin. Just be aware that you cannot withdraw fractions of a coin off the exchange. If you do this, you will lose your excess NEO.
- Currently, there are no transaction fees.
- GAS: Is the fuel for the NEO network. In the same way that you need to fill your car up with gas to make it work. App providers must use GAS to ensure their Apps run smoothly on the NEO blockchain.
- GAS is divisible. The smallest unit is 0.00000001.
- The GAS tokens divisibility could be a big deal. We say this because imagine if NEO was $1,000 per coin. Many investors wanting to invest a smaller amount, could not store this securely off exchange (smallest NEO unit is 1). This would mean the only way for smaller investors to get exposure to the project, would be through buying GAS.
Both tokens can also be used to take part in ICOs that use the NEO blockchain.
NEO have one of the biggest teams in the cryptocurrency space, with over 50 contributors and team members. The project has a wealth of talent, but we don’t want to bore you with details on the whole team. We’ll just focus on the founders.
- Founder – Da Honfei: Graduated from South China University of Technology in 2001. He then went on to become CEO of IntPass for 9 years before founding NEO and Onchain in January 2014.
- Founder & Core Developer – Erik Zhang: Graduated from Shanghai University and then also went on to found NEO and Onchain.
You might be wondering what on earth is this Onchain that these two guys have founded as well? Firstly, Onchain and NEO are two separate companies but the interests of these two companies do align and support each other.
Onchain provides private blockchain solutions to Chinese businesses and government whereas NEO has a public blockchain. With business and government, yes, they will be interested in private solutions but are exceptionally likely to want public blockchain solutions as well. This is where NEO comes in. You can think about the two companies as:
- NEO = Public blockchain for applications.
- Onchain = Private blockchain for government and Chinese business.
Onchain and their work with the Chinese government is actually a huge deal. This is because many see regulation as one of the biggest threats to cryptocurrency projects. The project should be less susceptible (than other crypto projects) to surprise regulation from national governments. NEO’s main market is China and the founders have pre-existing relationships with government officials, are actually building them solutions and are ensuring compliance solutions are being offered within the NEO ecosystem.
The Project’s Future
NEO seems to have all the foundations in place to be the Ethereum of the East. It’s been well documented that China does not like to use Western products e.g. Google or Amazon, instead preferring to make their own domestic products to serve the home market. Right now, the project is the biggest cryptocurrency to have come out of Asia and its ecosystem is expanding rapidly.
We don’t think it will be long before NEO is taking market share from Ethereum in the ICO market. Indeed, 2018 could see an exodus of applications migrating from Ethereum to Neo. The reason why we think this could be on the cards is:
- Cryptokitties showed that the Ethereum network maximum of 15 transactions per second is not enough to run even a single application properly. NEO, on the other hand, can process 1,000 transactions per second and has a working product.
- In the past, decentralized app developers really didn’t have any credible choices other than Ethereum. NEO has a working product and can compete with Ethereum for new ICOs and offer more transactions per second.
- Ethereum app developers have to build apps in a new programming language called Solidity. This takes time to learn and there are significant shortages in Solidity developers right now. NEO, on the other hand, supports common programming languages, making it easier for applications to be built on its blockchain. This is obviously a big positive for adoption.
- The project appears to have the support of the Chinese government, whereas Ethereum doesn’t seem to have any government backing. Therefore, Ethereum is perhaps more susceptible to negative regulatory changes.
We think that 2018 and beyond will see a battle between the Ethereum and NEO application platforms.
The NEO ICO
Firstly, you should know that NEO was formerly known as AntShares before the rebrand on 8th August 2017. The ICO also started on the August the 8th and priced coins at 3 cents each. The coin then first hit exchanges on 9th September priced at 18 cents a coin and hit an all time high of $196.85 on 15th January 2018.
Even with NEO losing around 75% of it’s all time high value, it still ranks as the third most profitable ICO for investors in cryptocurrency history. You can check out the current return since ICO at ICO Stats.
Should I Invest In NEO Coin?
It’s entirely up to you whether you invest in NEO coin or not. We can give our opinions on the project though:
- It’s the first cryptocurrency to receive an A in the Weiss Cryptocurrency Ratings.
- It’s the closest competitor to Ethereum that has a working product.
- The project allows application developers to build in common programing languages. This makes it significantly easier and cheaper to build crypto project teams.
- Da Honfei & Erik Zhang are working closely with the Chinese government through Onchain.
- It’s big focus is on creating a regulatory compliant smart economy.
- History has shown that China likes to promote China made products over Western counterparts.
- The NEO market cap is around 10% of Ethereum’s at the time of writing. We think there is better potential for larger gains, than with Ethereum.
- The application developer platform space is crowded. There are many projects that will compete with NEO and launch working products soon, for example: EOS, Cardano and Lisk.
- Ethereum has first mover advantage and are working on significantly increasing their transaction per second. If they succeed, then Ethereum may have a faster platform than NEO.
How To Buy NEO?
We have put together a separate step by step article with complete instructions on exactly how to buy and store NEO coin using different methods.
At TotalCrypto, we think that smart economies are the future and will become increasingly powerful over time. We imagine a future where:
- We can buy a house or a car easily and quickly, without significant middleman fees.
- Where ID checks are simple and we don’t have to scan our passports 10 times a year and hunt around for in date utility bills. Companies asking for these ID checks still don’t seem to grasp that most people get paperless bills these days.
- Items can be traded quickly and easily across borders. If I want to sell my mint condition Charizard, I want this to be as easy as possible and avoid extortionate fees.
- We don’t have to pay high commissions to travel companies when booking a holiday.
- The sharing economy grows even larger.
- The gig economy grows further and trustless work marketplaces are even more important.
We live in a digital age and we think it is time that the economy changes to reflect this. We must accept that the dream of this digital smart economy is still in its infancy and we need pioneers like NEO to make this a reality.
When it comes to projects like Ethereum and NEO, we do think there is enough space for a couple to co-exist. We don’t see it as a winner takes all scenario. However, we are aware that something bigger and better could be around the corner and that projects like Cardano and EOS could provide serious competition.
We are excited by the potential of the project and look forward to seeing it do battle with Ethereum, EOS and Cardano is 2018.
Disclosure: We do hold a position in this cryptocurrency and view it as a long term hold.
Below we’ve listed some key resources relevant to NEO.
? Safest NEO Wallets
Hardware wallets are the safest crypto storage solutions available. These wallets store your private keys and do not expose them to the outside world, making your crypto as safe as possible. Maybe you should treat your crypto like the million dollars it could well be worth one day?
? Best Free Wallets
We recommend you use the NEON wallet. Holding your coins in this wallet will ensure you automatically collect your GAS dividend.
- NEON Wallet – From the CityOfZion.
? Best Apps To Track Your NEO Investment
Need more information of NEO? Just check out the NEO white paper.