NEO: A Smart Economy Cryptocurrency
The digital age has taken the world by storm. People have the whole world at their fingertips and can access any necessary information with the help of their smart devices. This has also impacted the way economies trade in the current world. The economic system has gone completely global which has created the need for a smart economy system that would be more secure and help people trade assets online. Hence the blockchain concept came into the picture. Blockchain platforms are distributed computing systems with a high Byzantine fault tolerance and hence it’s easy to achieve decentralized consensus. These systems are also secure, therefore storing records of activities, events, medical records, etc. can be done without any hassle.
Origin & Background
The first platform designed on blockchain was created in 2008 by Satoshi Nakamoto and was successfully implemented as the core of bitcoin in 2009. Creation of a blockchain for bitcoin helped in solving the double spending issue as no authority was required to overlook the transactions. This made bitcoin the first digital currency that served as a public ledger for transactions. Many other applications took inspiration from Bitcoin and are now out in the digital domain for people to enjoy hassle-free transactions. NEO is one such cryptocurrency.
What is NEO?
NEO is a blockchain project that is built on the blockchain technology to enable digital asset and smart contract creation. The digital identity helps in automating asset management using the smart contracts and a smart economy is created within a distributed network. It was originally launched in China in 2014 as AntShares by Da HongFei and became open source project on GitHub in 2015. This system is based on a dBFT (delegated Byzantine Fault Tolerance) mechanism that can support close to 10,000 online transactions in one second. Since its launch, NEO has seen an exponential growth of the blockchain industry and the digital money market. Moreover, NEO has converted the traditional economic systems into more smarter systems that are revolutionizing the digital world.
Since NEO has been so successful in the digital world, Microsoft has started an official cooperation with NEO. This has led to the introduction of smart contract 2.0 that is designed for programming languages like Javascript, Python etc. This step is taken to reach out to more developers so that many new NEO based applications can be created. Moreover, the new feature the “Nest Fund” also allows users to create their own organizations. NEO has been highly successful due to below-mentioned points:
1. Digitizing real-world assets, trading, transfers, registration etc. are all allowed and easy to do in NEO’s framework.
2. Any information related to a specific record is easy to access due to the blockchain platform framework.
3. the e-contracts generate digital tokens which can be used for various purposes like recording assets or titles etc. as they function as general data.
NEO Blockchain & Digital Assets
NEO Blockchain is a continuous list of records that are linked together with help of a hash pointer. Each block stores the information of the hash pointer that links it to the previous block, the timestamp when it was created and the data stored in it. In short, it a contract between the seller and buyer that stores all the transactional data securely and efficiently. All the information is secured by cryptography and the data of any block cannot be altered without making changes to the linked blocks. These features provide great security and seamless transactions for the users.
A digital asset is nothing but the asset that can exist in an electronic format. The NEO blockchain technology helps in digitization of these assets. The digitization is secure, tracked, transparent and trustful. Once a user joins the NEO blockchain, they can register and start trading the assets right away. The security of these digital assets is protected by digital identity.
The digital identity contains the identity information of a user, trader or an organization in an electronic form. The NEO has implemented identity standards compatible with X.509 which supports the point-to-point certificate model from the Web of Trust. An asset linked to a valid digital identity is legally protected.
Smart Contracts & How they work?
A smart contract was first proposed by Nick Szabo, a cryptographer in 1994. These contracts help in the execution of an online transaction by digitally verifying and enforcing the terms of the contract linked to that transaction. Hence no third-party verifications are required during execution as they are autonomous systems that execute services for cryptocurrency. These smart contracts are useful in the blockchain technology that provides a platform that is reliable, decentralized by Byzantine fault-tolerant algorithm, and is secured by cryptography. The main advantage of these smart contracts is that they provide more security to traditional contracts and reduce execution costs whatsoever.
To explain this process let’s take an example. If someone wants to rent a place from a person, he or she can use the blockchain technology to execute this transaction by paying in cryptocurrency. The smart contract will generate a receipt that is stored in the virtual contract. If the owner doesn’t give the digital key at the time of the contract the blockchain automatically refunds the cryptocurrency. This system is visible to other people as well and hence stealing is highly unlikely. Once the time frame is finished the virtual contract is automatically cancelled and cannot be tampered further.
NEO’s smart contract system is called “NeoContract” which is built on common programming languages like Java, C#, python etc. The debugging and tracking of bugs or errors in NeoContract is very easy and can be done by any developer. This will help developers from across the world to create smart contracts as per their requirement.
The two Token NEO vs GAS
NEO and GAS are two different cryptographic currencies available in the NEO platform. Both these currencies cannot exceed 100 million tokens. The NEO token can be considered as a share in the NEO market and it cannot be divided. Users holding NEO currency have voting rights in the NEO market and right to receive dividends as GAS tokens.
50 million NEO currency was open to trading by the users. The remaining 50 million tokens were locked till 16th October 2017 and were used by the NEO council in development of the NEO ecosystem. 10 million tokens were used to reward the developers, another 10 million were used to build the NEO ecosystem. 15 million tokens were saved as a backup and the last 15 million were cross-invested in blockchain platforms.
When a block is built in the blockchain 8 GAS tokens are generated. But the production rate reduces by 1 token after every 2 million block creations. Once the GAS currency count touches 100 million then its production will stop. With the current block creation rate, this is expected to happen sometime in 2039. The GAS tokens can be divided when compared to the NEO tokens. A user has to pay in GAS currency to execute a transaction with the help of a smart contract. A part of the GAS dividend goes as fees to the NEO network.
Conclusion
The NEO is an online trading network that has three critical features: Digital Identities, Digital Assets, and Smart Contracts. With the latest secure technology and cryptography, it has the right infrastructure to build a smart economy that can become the backbone of the future trading industry.
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Disclaimer: Trading in cryptocurrencies is subject to market, technical and legal risks. Prices in India vary from international prices due to local demand and supply. This article is for user’s knowledge. Please don’t consider this as any investment advice.
KoinOK Team
www.koinok.com
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