What is Neo? (NEO)

The Beginner’s Guide

Neo is a software network that seeks to serve as a platform on top of which anyone can transact and create decentralized products and services.

Neo is sometimes referred to as the “Ethereum of China” due to it sharing many similar features with its more popular counterpart, such as the ability to write decentralized applications (dapps) for decentralized exchanges, prediction markets and social networks, among others.

Further, the Neo network also offers a host of other features to its users, including a decentralized file storage system, an identity system, and an oracle system for feeding external information to it (like price data).

Neo uses a unique governance system called Delegated Byzantine Fault Tolerant (dBFT) as its consensus mechanism for the computers that run its software.

Central to running operations on its blockchain are two native cryptocurrencies, NEO, for voting on protocol changes, and GAS, used to pay for computation on the network

Users seeking to stay connected on the current development status of Neo can follow its official blog for up-to-date details.

What is neo

Who created Neo?

Neo, launched as Antshares, was created by Da Hongfei and Erick Zhang in 2014, and rebranded to Neo in 2017.

The Antshares team initially distributed its cryptocurrency, ANS, in a 2014 token sale, raising over 6,100 bitcoin. ANS tokens were then converted to NEO in 2016, with the team conducting a second token sale, raising over $8 million, while releasing the total supply of NEO coins.

Half of the NEO supply was released to its token sale participants, while the other half was retained for Neo developers, a community fund and for investment in other projects.

How does Neo work?

Neo’s platform allows developers to use its software to run smart contracts (known as NeoContracts) and design new programs (dapps) meant to replicate real world products and services.

NeoContracts differ from other smart contract-based protocols in that developers can build applications using a variety of popular existing languages (like C# and Java), rather than learning a new language.

Thus, NeoContract’s ability to work across various programming languages can be attractive to a larger pool of developers seeking to create dapps, or support existing ones.

Delegated Byzantine Fault Tolerant

To secure its blockchain and keep its distributed network of computers in sync, Neo employs a consensus mechanism method called delegated byzantine Fault Tolerant (dBFT).

dBFT works similarly to the delegated proof of stake (DPoS) and leverages a real-time voting system to determine which computers running the software can create the next block on the Neo blockchain. This means anyone who owns NEO can help operate the network.

Each NEO token (sometimes referred to as a Neo coin) can be locked, or “staked,” to represent a vote (the more staked NEO, the more voting power.) All owners who stake NEO then vote for the consensus nodes, who are responsible for creating blocks.

For proposing and adding new blocks to the Neo blockchain, consensus nodes receive the network’s transaction fees (paid in GAS cryptocurrency).

Why does NEO have value?

The NEO token is the main cryptocurrency powering the Neo blockchain and can be used for holding, sending, spending, and staking.

NEO’s main use case is that it allows those who stake it the right to vote on upgrades to the network’s parameters.

Staking NEO grants users a portion of the block rewards, paid in GAS. Gas is generated with each new block created until the network has released 100 million tokens.

Of note, its smallest unit is 1 NEO and it cannot be further subdivided whereas the minimum unit of the GAS cryptocurrency is 0.00000001.

Like many other cryptocurrencies, the supply of NEO and GAS tokens is limited, meaning that adhere will only ever be 100 million units of each according to the software’s rules.

Why use NEO Coin?

Developers may be drawn to NEO due to the protocol’s technical design, which, rather than relying on its own programming language, allows them to build applications using familiar languages.

Investors may also be interested in adding NEO to their portfolio should they believe the market will one day favor protocols built to facilitate custom tokens and dapps.