What is NEO?

NEO is rank number 22 of Cryptocurrencies by Market Capitalization.
With a market value of $547 M, NEO is just behind Ethereum Classic and Dash and has a price of $7.75 per coin.

Neo has been started 2016 as “AntShares” and has its origins in China. It aims to be “the new Ethereum”, which means building a decentralized platform, that is focused on smart Economy.
The digitalization of assets is experiencing growing demand in a world, that is networked, across borders and constantly developing.

In 2017, AntShares renamed itself NEO.

How does it work?

In order to create consensus on a decentralized basis, NEO is not using Proof-of-Stake or Proof-of-Work.
The consensus-mechanism, NEO is using, is called “Delegated Byzantine Fault Tolerance-mechanism”.
NEO token holders are allowed to vote for delegates, which are responsible for recording transactions on the network.
Between this delegates, a speaker is chosen randomly. The task of the speaker is to build a block with transactions that are waiting to be validated and then sending it to the delegates.

The block is added to the chain, if 2/3 of them are reaching consensus.
The aim of this consensus-mechanism is to keep the ability to reach consensus, even when one delegate is corrupt.

Because of the condition to reach consensus between the delegates, NEO can’t be forked.

Points of criticism

The biggest point of criticism is, that NEO is heavily centralized. With only seven nodes voting, there are big advantages like faster transactions or better performance, but they are only achieved by declines of decentralization and freedom of censorship, which speaks against the basic idea of a Blockchain.
Another weakness of NEO is, that it is very expensive to create a smart contract. It’s hard to compare the costs of creating a smart contract with other cryptocurrencies, because you have to pay in GAS.
GAS has no fixed valuation, what makes the price of creating a smart contract depending on the price of GAS.
A new smart contract costs about 500 GAS, if the price of GAS is higher, the costs are getting higher simultaneously.

Another disadvantage is, that the lag of decentralization leads to a decrease of privacy.

Advantages

If you hold NEO, you will receive a dividend on your holdings, which is called ”GAS”.
If you own 100 NEO for example, you will receive 0.0403 GAS per Day.
with a current price of $1.13USD and a Return of Investment of 2.17%, GAS is a rewarding payment for just holding NEO.

Another advantage is the easy programming language, NEO is using. By applying JAVA, NEO generated a big network of programmers that are developing the blockchain.
The virtual machine behind the programming language is optimizing the smart contract code automatically.

One of the biggest fears of Crypto-enthusiasts is a Quantum-computer breaking the methods of safety of a Blockchain.
This could not happen to NEO, because in contrast to other cryptocurrencies, NEO is theoretically quantum-safe.

The biggest advantage of NEO is the living ecosystem. By combining the hype from 2017, when NEO was called “the next Ethereum” and the thriving development, NEO gained a loyal and active community, which maybe is the most important requirement for long-term success of a project.

Last but not least, there is another advantage, that shouldn`t be forgotten.
There are no transaction fees.

Should I invest in NEO?

There is big interest in smart economy by institutions and projects around the word. The tokenization of assets and personal data is becoming more and more mainstream, which opens up big opportunities for early investors.

The big question is: Are the participants of the platform willing to sacrifice privacy for fast                                                                                           transactions and good scalability?

A point, that speaks for an investment in NEO is, that it is working. Compared to other projects, that only have ideas for solving a problem, NEO is one step forward to many Cryptocurrencies.

With a current price of $7,75USD, NEO is down 92% of its all-time-high ($94USD on April 29th 2018).

The current cheap price and the fact, that I receive dividends in form of GAS, by holding NEO, makes me comfortable in buying a small amount of this cryptocurrency.

This is not financial advice!
Always do your own research!