Open source available on GitHub.
Smart contracts can be written by well-known programming languages.
Digital identity and digital assets.
NEO tokens as shares and GAS tokens as dividends.
NEO block size is flexible. The current average block size is 2 MBs.
A new NEO block is created approximately every 20 seconds.
NEO is a rebranded name for the non-profit project formerly known as Antshares and it is the first public blockchain in China. The project was founded in 2014 and it is often called as Ethereum of China. The reason is definitely the fact that NEO implemented smart contracts, which is basically the same feature that was firstly introduced by Ethereum. By putting together smart contracts, a digital identity, and a digital asset, NEO strives to build a distributed smart economy network.
Most interesting NEO technologies are dBFT, NeoX, NeoFS, NeoQS. They will be mentioned later in the text.
NEO‘s development team is not listed on official pages. A well-known person is Da Hongfei. Da Hongfei is the founder of NEO and CEO of Onchain. Tony Tao is CEO of NEO and founder of Nest Fund. Chen Zhitong is a famous NEO community developer. Li Jianying and Erik Zhang (specialist to smart contracts) are NEO‘s core developers. There are about 15 developers on NEO‘s team.
NEO‘s team closely collaborates with other projects. I will mention two of them. The first one is City of Zion which is an independent open source developer group contributed to NEO blockchain source code.
The second one is the Onchain project. Onchain was found in 2014 and is led by NEO’s founders, Da Hongfei and Erik Zhang. NEO and Onchain are separate entities with separated funding. However, NEO and Onchain work on very similar projects and they influence each other hugely. Onchain focuses on designing, researching and developing of the distributed blockchain ledger.
The smart contract is a piece of code that allows creditable transactions between participants. Participants rely on the smart contract which is embedded in the given transaction. Thus the smart contract serves as a mediator between participants and involvement of the third party can be avoided. The smart contract verifies whether all conditions of the contract are met. If this is the case, the smart contract automatically executes coded instructions and thus finishes the transaction.
NEO’s advantage over Ethereum is a support of multiple well-known programming languages which can be used to write smart contracts. The most attractive are C#, Python, and Java. In the future, more languages will be supported.
It is worth to mention that NEO had to develop a transpiler to enable coding smart contracts in above-mentioned programming languages. The transpiler converts the smart contract coded for e.g. in Java, into the code which can be used by an NEO virtual machine.
Smart contracts are the most important NEO blockchain feature since other features utilize it. Other key features in NEO smart economy network are digital identity and digital assets. All of the features together, allow transferring of assets and products in the secured and encrypted way.
Digital identity is an electronic information referring to individuals, groups, organizations or other entities. The identity of the participants must be verified before NEO system starts to transfer money, exchange digital assets or provide other services.
Digital assets are basically custom electronic data. It can be, for example, a token, a share, an electronic document. NEO users can register, store and transfer digital assets. The connection between digital assets and physical assets can be achieved via digital identity.
Utilizing NEO smart contracts, digital identity and digital assets developers might create following types of applications:
The NEO blockchain differentiates between two native tokens. NEO and GAS. There are 100 million NEO tokens and it can be considered as a share. NEO tokens cannot be subdivided. The lowest unit is 1 NEO token. Keeping NEO tokens allows owners to manage the network and participate in voting related to the NEO system.
GAS is the fuel token and it can be considered as a dividend. GAS is needed for NEO network operations like verifying digital identity, storing and sending digital assets or using smart contracts. The maximum total limit of GAS is 100 million. The lowest unit is 0.00000001 of GAS.
NEO’s consensus mechanism, Delegated Byzantine Fault Tolerant (DDBF), is based on the well known Byzantine Fault Tolerant algorithm. It allows large-scale participation in consensus voting. Any NEO token holder can select a bookkeeper which it trusts. The selected group of bookkeepers, via DBFT algorithm, reach a consensus and generate a new block. It takes 15 to 20 seconds to generate a new block. The throughput of NEO network is up to 1,000 transactions per second.
Cross-chain interoperability agreement (NeoX) is a protocol designed to enable cross-chain interoperability. It allows exchanging assets between different blockchains. Thus the asset from NEO blockchain can be sent to other supported blockchains. The asset can be also received by NEO blockchain from the other blockchains.
Distributed Storage Protocol (NeoFS) is a storage protocol which enables storing of files in NEO blockchain. File content is hashed and distributed in the blockchain’s nodes. Files can be stored and accessed via smart contracts. In addition, a file can be linked with the digital identity so the only verified participant can access the file if it has an appropriate digital certificate.
Anti-quantum cryptography mechanism (NeoQS) is a feature that should ensure resistance to Quantum computing. Thus cryptography used by NEO system will hopefully not be cracked when functional Quantum computing will become a reality.
NEO governance mechanism is not decentralized as it should be expected from a cryptocurrency blockchain. Currently, the network consists of thirteen nodes which are fully controlled by NEO‘s team. NEO‘s community cannot connect own node and participate on GAS mining. It will probably change in the future and people will be able to set up not only own nodes, but also master nodes. Setting up master nodes will require locking up the specific amount of NEO tokens.
Currently, China’s government has a friendly stance on NEO as blockchain technology seems to have bright future. However, the stance might change any day and it could have the negative impact on the NEO project. Currently, ICO is banned in China so the NEO platform cannot be used for crowdfunding.
When the genesis block of NEO network was mined, 100 million NEO tokens were generated. The first 50 million of NEO tokens were distributed to supporters during crowdfunding. The second 50 million NEO tokens are managed by NEO‘s council to support further development. In the NEO white paper, there is exact percentual description how the second portion will be distributed in time. NEO tokens can be bought in major cryptocurrency exchanges.
GAS is generated with every newly mined block. The initial GAS amount was zero and maximum GAS supply is 100 million tokens. Each year approximately 2 million blocks are mined and initially, 8 GAS tokens are generated per single block. The annual GAS reduction is 1 GAS per block. So GAS will be mined 22 years. Once 100 million GAS tokens are mined there will be no further GAS generation.
Please note that currently, GAS mining is not possible so the only way is to keep NEO tokens is in a NEO wallet.
NEO’s white paper is quite extensive and important topics are hit. Despite the fact that the level of detail is not the highest one still, it is an above-average white paper. It is still a very solid document with a lot of key information in it and it is sufficient for understanding what the NEO project is about.
The most important part is dedicated to the smart contracts, digital identity, and digital assets. Other topics are blockchains and nodes, economical model, consensus mechanism and so on. There is a list of 7 contributors.
NEO blockchain usage
NEO blockchain was used as an ICO platform for Red Pulse. Red Pulse Tokens (RPX) are NEO tokens issued by Red Pulse. It depends on China’s government whether there will be another ICO utilizing the NEO platform.
Currently, the NEO network is ready for real business but there is no company utilizing it. However, some projects are under development. AdEx is a project intended for creation of a decentralized exchange. The world’s first decentralized mobile network Qlink announced that NEO will be one of the main investors. It is planned that Qlink blockchain will be able to communicate with NEO blockchain through NEO's cross chain protocol.
There is no relevant information related to investors or funding at NEO‘s official pages. The only resource discussing this topic is in the white paper.
Funding of the NEO project is officially realized via 50 million of NEO tokens which are managed by NEO Council. NEO tokens will be gradually released every year up to complete depletion. NEO council releases monthly reports which are available on Reddit.
Da Hongfei and Erik Zhang as NEO and Onchain founders.
The NEO project has a huge potential due to the fact that it is the first public blockchain in China and the market is massive. If succeeded in China, NEO can expand and can be a serious competitor to Ethereum. On the other hand, there is a lot of work in front of NEO‘s team. Firstly they have to resolve nodes and master node‘s network issue to become a real blockchain in the true sense. After that NEO‘s team will have to pay attention to network scalability and sustainability.
The NEO roadmap can be found on Reddit. There are more roadmaps available per certain period of time and they are just mind maps or text. Quality is rather poor in contrast with the white paper.
