A Deep Look at NEO: Should It Be in Your Portfolio?

Ivan Skladchikov
July 27, 2020
Should NEO be in your portfolio

Labeled as the “Etherium killer,” NEO promises to become the next big thing on the crypto market. But can it deliver? In this article, we take a look at the NEO cryptocurrency to figure out if it’s a worthy investment. Let’s find out if it should earn a place in your portfolio or if it’s one to stay away from.

The Basics: NEO is Kinda Like Ethereum

NEO is a Chinese blockchain platform fundamentally similar to Ethereum. It applies smart contracts to convert physical assets into digital ones. 

The platform facilitates a secure transfer of value so users can safely and easily manage and exchange digital assets. For instance, it can help sell a car by transferring ownership rights via the system and bypassing an intermediary. No need for an agent — no need for an agent fee. Everyone is happy. Well, except for that agent.

The team seeks to build a smart economy ecosystem friendly to both mainstream users and developers. If all that sounds extremely familiar, there is a simple explanation.

NEO copycats Ethereum in a lot of ways. On the bright side, it also adds important innovations.

Let’s consider the common features first.

These are Some of the Things NEO Stole from Ethereum:

Well, let’s be clear, they didn’t actually steal these things, they copied the concept. Maybe even came up with the same ideas in parallel. We are not judging. 😊

  • DApps and smart contracts: Like Ethereum, NEO provides a platform upon which developers can create and run smart contract-based applications. if you are not familiar with the term, smart contracts are digital self-executing agreements. The beauty of a smart contract is that it’s impossible to change or cancel.
  • Digital asset management: Both platforms allow users to digitize and trade real-world assets in a trustless peer-to-peer manner.
  • GAS: NEO uses GAS. Ethereum uses gas. But don’t be confused, those gases are not the same. We explain the differences in more detail below.
Among the distinctive features of NEO are a unique consensus algorithm, a dual token model, a multi-language smart contract system, and a self-sovereign identity protocol.

How NEO and Ethereum Are Different

Both platforms looking similar, the question arises why NEO is “the one” and what it’s going to kill Ethereum with.

Here are the key differences between the two.

  • NEO/GAS: unlike ETH and gas, NEO and GAS are 2 separate assets, each having its own price in USD. Also, NEO token are indivisible — you cannot break them into gwe-like units. If you hold NEO in your wallet, the system rewards you with some GAS. You use it to execute transactions in the network. See NEO as shares or stocks and GAS as dividends.
  • dBFT: NEO uses the dBFT (Delegated Byzantine Fault Tolerance) consensus, not the good old Proof-of-Work method. It means less energy waste, higher speed, and better scalability. It takes between 15 and 20 seconds to generate a new block in the network. As a result, it can handle up to 10,000 transactions per second. Good for supporting large-scale commercial dApps.
  • Digital Identity: every member of the network, be it a person, a business, or an organization has a digital identity. To verify it, the system uses facial recognition, fingerprints, SMS, and other methods. 
  • Multi-language Smart Contract System: this system supports all popular programming languages including Java, Javascript, Go, Python, and C++. A developer doesn’t need to learn a new language to get on board.

NEO Advantages

To sum it up, the value of the project stands on three big pros:

  • Focus on mass adoption: Ethereum only supports Solidity programming language. Its rival offers multiple options to developers.
  • Higher speed: The NEO network can process up to 10,000 transactions per second. Ethereum is well behind with only 15 transactions per second.
  • The government’s blessing: “Chinese Ethereum” enjoys the support of their national government. It opens the doors to the Asian markets and reduces regulatory friction.

What the Future Holds for NEO 

Thomas Lee, the Head of Research at Fundstrat Global Advisors, predicts NEO could reach the mark of $225 in 2020. The experts of Being Crypto agree that the price of this coin might go up to $120 by the end of this year and double in 5 years. Keep in mind though, that the cryptocurrency market is highly unpredictable and these forecasts should be taken with a grain of salt. 

How to Buy and where to Store NEO

If you decide to add NEO to your portfolio — It’s easy. Download our Channels app and buy NEO with EUR, USD, or any cryptocurrency at the touch of a button.

Channels lest you buy and exchange NEO as well as tens of other cryptocurrencies and send them to other wallet users with zero fees. You can trade by exchanging NEO for other currencies within the app, or hold it as a long term investment.

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