What is NEO cryptocurrency (NEO)?

The cryptocurrency boom quickly led to new projects that were looking for innovation, one of those projects is the NEO cryptocurrency. Created in order to generate a “smart economy”, NEO is one of the most valuable and innovative cryptocurrency projects out there today.

Ethe name NEO refers to one of the cryptocurrency projects that seeks to transform existing economic platforms. For this, this project presents a series of very interesting concepts, technical capacities and innovations. It has the ability to deploy smart contracts, DApps, distributed storage system and a highly scalable consensus protocol. All these characteristics make this project a platform blockchain large capacities.

In fact, NEO is known as "the Chinese Ethereum", and this is not very far from reality. NEO is built by a series of vibrant community formed in that country. All of them willing to transform it into a strong option against Ethereum and other cryptocurrencies of similar capabilities.

NEO history

The project started in February 2014, when the company Onchain I AntShares. The masterminds behind this creation were Erik Zhang y Hongfei Da. With AntShares, the company was looking to create a very ambitious blockchain platform. First, they wanted AntShares to have the same capabilities of Ethereum and even superior when it comes to making smart contracts, processing transactions, among others. Second, they wanted to take the capacity for interoperability and migration between public and private blockchain to a new level. This second bastion would lead AntShares to stand out from other projects by having tools that facilitate this task.

In the midst of the evolution of AntShares, in 2017 the project decided to change its image and the name of the project. This change gave rise to the cryptocurrency NEO and the current image of the project. But the name change was not only to obtain a new image, behind it there was a clear roadmap to follow. All this in order to quickly climb to the top that its developers wanted so much to achieve.

In the midst of all this, the company began to have close relationships with the Chinese government and other companies in the Asian nation. Thus, after rebranding and the creation of new working relationships, NEO hard work of evolution began. The result of those efforts is that companies like Microsoft China supported the project.

NEO technical features and innovations

Cryptocurrency NEO It has a number of fairly unique features. While it is true that it has some that we have seen in Ethereum o TRONThe way they work is completely different. In fact, NEO It has improved many aspects and has taken them to new levels, not only of security, but of scalability, the Achilles heel of cryptocurrencies.

Now let's delve into some of these advances and innovations to learn more about this development and all its potential.

DNA, a platform to distribute the potential of the blockchain

DNA are the acronyms of Distributed Network Architecture o Distributed Network Architecture. Your goal is laying the foundations for an interconnection platform between digital services and other public or private blockchains using the NEO ecosystem. With this, NEO aims that each digital service, regardless of its profile, can use the potential of its platform.

If the above is not clear enough, perhaps this example will help you see it better:

Imagine that your company has a business mail service. This service must have the ability to send encrypted and signed mail transparently to the user, and at the same time provides a high level of security. It is here where DNA take action. DNA allow that NEO can manage identity, encryption, and secure sharing of public keys between users. Thanks to this, it is possible to encrypt and sign the mail message. Best of all, it happens transparently to the user, without complications.

It sounds surprising and it is. But best of all is that NEO has already made it a reality. The example above is precisely what Alibaba does with the mail service of Ali Cloud. However, the ability to DNA it doesn't end there. The objective of DNA is to serve as an interconnection bridge between NEO and the rest of digital services, and this includes other blockchains. All in order that NEO be the base of construction of these services.

dBFT a consensus protocol designed for scalability

Cryptocurrency and the ecosystem behind NEO It has developed important advances in the world of blockchain consensus protocols. To do this, its developers have created the consensus protocol dBFT (Delegated Byzantine Fault Tolerance). This algorithm is a highly modified version of the algorithm BFT that we see for example in Bitcoin o Ethereum. If you want to know more about Byzantine fault tolerance, you can read our article in this link.

The design of dBFT allows a series of validators to be chosen according to a voting system between nodes. that is carried in real time. The objective of this vote is to choose the nodes that will create the block will confirm the transactions. Once the validators are chosen, they take the transactions, confirm them and generate the block, repeating the cycle. This also means that NEO is a coin that cannot be mined.

The achievement of this system is that pIt allows to generate blocks very quickly and with a low energy cost. In fact, the generation of blocks in the NEO cryptocurrency usually takes between 10 and 15 seconds. This allows it to have great scalability compared to blockchain like Bitcoin. In fact, the algorithm can be adjusted to have performance close to 1000 transactions per second (TPS) and even get to 10.000 TPS with enough optimization. The highest known transaction cap on this blockchain is more than 2400 TPS.

NeoVM, a virtual machine with unique characteristics

The ability to use smart contracts in cryptocurrency NEO it comes from the hand of a virtual machine just like in Ethereum. This virtual machine is known as NeoVM. The capabilities of NeoVM are very similar to those of Ethereum Virtual Machine (EVM) with some interesting additions and modifications.

Firstly, NeoVM it has a tool called neocompiler. This tool is used to "Translate into native language" of the virtual machine, the code written by the developers. This way you can use programming languages ​​like Java, C #, C / C ++, JavaScript, Go, Python or other supported by neocompiler. The result of this is that the creation of smart contracts is simplified. This because developers do not need to learn a new programming language to create them, as it happens in Ethereum.

Other benefits of NeoVM is ability to adapt for use in different applications. For example, NeoVM allow extend its functionalities so that in this way you can access new ones. For example, we can create zero knowledge tests or other functions that allow us to interact with other services or blockchains.

NeoQS, cryptography of the future resistant to quantum computing

Another of the great advances and characteristics of NEO is its powerful cryptography. In fact, the cryptocurrency NEO goes one step further and built a cryptographic system resistant to quantum computing. With it, the cryptocurrency NEO and its ecosystem is ahead of the future and presents a cryptographic system with a high level of security.

NeoQS It is designed on a system of Lattice problems. In particular, a mechanism based on the shortest vector problem (SVP) and nearest vector problem (CVP). In this way, a highly secure system was created, which is complemented by the standard ECDSA to provide greater security.

NeoFS, a distributed storage system designed for the future

neofs is the development of cryptocurrency NEO to give you the ability to distributed storage to your platform. Under construction since November 2019, it is developing this to be the "cornerstone" from your platform.

The main characteristic of this system is that it is based on a homomorphic cryptographic system. In this way it seeks to create a system of secure storage, with high-level cryptography and very low performance impact. At the same time, its operating structure guarantees that the network will be able to distribute the information in a balanced way. This seeks to exploit its capacity, bandwidth to the maximum and maintain a high level of decentralization.

While neofs It is still a project in development, its operating structure is unique compared to other options. It is expected that it will be completed to be used with the launch of NEO 3.0, the next evolution of NEO.

NEO Token Distribution

The cryptocurrency NEO It has the capacity to issue 100 million tokens. This issue is divided into two parts. The first part are 50 million tokens distributed proportionally among NEO supporters during crowdfunding. This portion has already been distributed.

The second part is 50 million NEO administered by the NEO Council. These tokens serve to support the development, operation, and long-term maintenance of the platform. The plans for its distribution are as follows:

1. 10 million tokens (10% total) will be used to motivate developers and Board members.
2. 10 million tokens (10% in total) will be used to motivate developers in the ecosystem.
3. 15 million tokens (15% total) will be used to cross-invest in other blockchain projects, which are owned by the Council and used only for projects NEO.
4. 15 million (15% total) will be retained as a contingency.
5. Annual use of NEO in principle it should not exceed 15 million tokens.

GAS, the other token in NEO

In addition to this, the GAS. The GAS is generated with each new block and is used to pay for transactions within the platform. The initial total amount of GAS is zero. With the increasing rate of generation of new blocks, the total limit of 100 million GAS will be reached in about 22 years.

Every year around 2 million blocks will be generated and the initial generation will be 8 GAS per block. There will be an annual reduction of 1 GAS per block, per year, to coincide with the passage of every 2 million blocks. The reduction will continue to only 1 GAS per block and will remain at that rate for about 22 years. After block number 44 million, the total GAS generated will have reached 100 million and, from this point on, there will be no more generation of GAS from new blocks.

In accordance with this launch curve, 16% of the GAS will be created in the first year, 52% of the GAS will be created in the first four years, and 80% of the GAS will be created in the first 12 years. These GAS will be distributed proportionally according to the NEO retention ratio, registered in the corresponding addresses. NEO holders can initiate a claim transaction at any time and claim these GAS tokens at their retention addresses.

Advantages and Disadvantages of NEO Cryptocurrency

Advantages

Among the main advantages we can mention:

1. Its consensus protocol offers tremendous scalability in contrast with PoW o PoS. This fact has allowed NEO has been able to hit peaks of 2400 TPS so far.
2. Your NeoVM virtual machine is highly flexible. The option of programming smart contracts in well-known languages ​​allows developers to focus on developing rather than learning a new programming language.
3. It offers interoperability with public or private digital and blockchain services.
4. It allows to quickly deploy private networks with different associated services. For example, it is possible to deploy sovereign digital identity services or voting systems in a simple way.
5. Thanks to NeoQS, NEO is capable of resisting quantum computing attacks that undermine the security of its encryption systems.
6. It has a highly dynamic working and programming environment thanks to its extensive development.

Disadvantages

On the other hand, among its disadvantages can be listed:

1. dBFT it is an unproven protocol compared to PoW o PoS.
2. Its network does not currently have a high level of decentralization that guarantees its security and more community governance.
3. Many of the platform options are not yet usable, such as the case of neofs. However, these capacities will be completed with the arrival of NEO 3.0 for the 2020 year.
4. It is a little-known project in the West, which has led to very little technical information written in Spanish and even in English.

Links of interest