What is the cryptocurrency NEO, its technology and token GAS?

Spread the love

NEO is a cryptocurrency that originated in China and was developed to create a scalable network for building distributed applications (dApps). The development team behind the NEO project has very similar goals to Ethereum. Because of the similarities, NEO is sometimes called the “Chinese Ethereum”, but in contrast to the ETH blockchain technology, this cryptocurrency uses a two token model: the NEO coin and the GAS token.
NEO is the underlying asset and generates GAS tokens which are used to pay the transaction fees in the network. If transactions take place on the NEO blockchain, then the transaction fees, e.g. for the execution of a Smart Contract or a decentralized application (dApp), are not paid in NEO coin but in GAS.
The smart-economy proposed by the NEO foundation is based on three different layers.

  1. Digital assets: users can register, trade, and circulate multiple types of assets through a validated digital identity are protected by an immutable blockchain-layer. NEO has two forms of digital assets: global assets and contract assets. Global assets can be recorded in the system space and can be identified by all smart contracts and users, while contract assets are recorded in a private storage area of the smart contract and requires a compatible client to recognize them.
  2. Digital identity: it means the identity information of individuals, organizations, and other entities that exist digitally (like a government issue ID number).
  3. Smart contracts: the NEO contract, smart contract system is based on multiple languages like c#, java and python, which allows for a quick integration with other protocols.
Token – NEO/GAS

Currently, there is about 65% of the total NEO supply in circulation:

  • Total supply: 65,000,000 NEO
  • Circulating supply: 100,000,000 NEO

GAS is the fuel token for the realization of NEO network resource control, with a maximum fixed total limit of 100 million. The NEO network charges for the operation and storage of tokens and smart contracts, thereby creating economic incentives for bookkeepers and preventing the abuse of resources. The minimum unit of GAS is 0.00000001.
About 100 million GAS, corresponding to the 100 million NEO, will be generated through a decay algorithm in over 22 years to address holding NEO. If NEO is transferred to a new address, the subsequent GAS generated will be credited to the new address.

Technology behind NEO cryptocurrency 

NEO is blockchain-based. Much like Ethereum, it’s focused on creating a digital economy around decentralized smart contracts. NEO, however, utilizes a different consensus mechanic based on dBFT as well as a dual token system.
NEO employs a consensus mechanism called Delegated Byzantine Fault Tolerance (dBFT). Participants in the system can designate certain nodes as bookkeepers who must maintain a minimum balance of NEO and meet certain performance requirements.
Bookkeepers are tasked with verifying the blocks that are written to the blockchain. If two-thirds of the nodes on the network agree with a bookkeeper’s version of the blockchain, consensus is achieved and the proposed version of the blockchain is validated. If consensus fails, an alternate bookkeeper is called and the process is repeated.
As this consensus only needs to be replicated across a subset of the network, it is more efficient than classic Byzantine Fault Tolerance. The network as a whole consumes fewer resources and can handle higher transaction volumes.
 

Leave a Reply

Your email address will not be published.