What is NEO?
To put it simply, NEO is the Chinese version of Ethereum, and it focuses on building a decentralized smart-contracts platform.Smart contracts(*) are one of the most incredible features of blockchain, because they allow to process a lot of bureaucracy straight into code. This means that with NEO platform, developers will be able to code the fulfillment of real contracts into the blockchain.If the conditions coded into the smart-contract are met,then the money is transferred.If conditions are not met, the payment does not succeed.
This makes possible to build on the top of NEO blockchain many types of marketplaces, such as decentralized exchanges, to transfer digitalized assets backed by real products(oil, gold…).
What happened in China?
Lately China begun to takes steps in facing the rise of cryptocurrencies.
The interesting thing is that China is moving in order to regulates ICOs(**), probably considering them with a legal status similar to foreign businesses in China.This means that NEO could be the first bridge connecting cryptocurrencies with China.
It would be very strange if such an important topic was not discussed during the National Congress of the Communist Party of China weeks ago,in october.
Building an ecosystem around NEO could be a wise choice for China to become a leader in leveraging blockchain technology, and the possibilities are immense.
Moving beyond the dollar?
China has also been accumulating a lot of gold during the last years, and still owns a big amount of US debt (1.2 trillion $). A bold move into blockchain could shape the world financial markets for the next years.
The total crypto market capitalization until now is still quite small, as it is just around 200 billion $.This amount is quite small if considered that the 60 major stock exchanges in the world have a total value of 69 trillions $. The Federal Reserve(which is the Central Bank of United States) has been printing money with very low interest to boost the economy.This allowed companies to borrow more money and create optimism, rising the value of the stock market.But once a big country like China will limit the amount of dollars they have by diversifying its assets, how much time will pass before US economy's collapse?The dollar is a strong currency, but it's inflated constantly to drive artificially US economy.Strong countries like China and Russia are beginning now to get more aware on how to play their role in the financial world.China is the engine of the world's economy right now, because it's constantly growing and hold a lot of other countries debt.We should watch carefully every move to see what will happen..
But..what caused this sudden price increase?
NEO will deliver an announcement in 3 days, and this could be related to a beginning of a regulating process of ICOs in China, giving NEO a big first-mover advantage.Things could change really fast if this happens…
Right now NEO is trading around 37$, while just some hours ago it was around 29$
Linear Scale Chart from CoinMarketCap
https://imgsafe.org/image/fa8ef421ff
Log Scale Chart from CoinMarketCap
https://imgsafe.org/image/fa97ec51be
The relation between GAS and NEO
An important thing to notice is that a NEO "coin" cannot be divided(similarly to a share in a company).
----It is true that on exchanges is possible to buy “parts” of a NEO, but just because the exchange takes care of NEO’s private keys----
We could see NEO as a “commodity” that allows NEO “shareholders” to get passive income by staking GAS, which is the actual cryptocurrency of the NEO network.GAS simply allows users to use the NEO blockchain for their purpose.
There will always be 65 millions NEO coins,which makes possible for NEO holders to accumulate GAS through a staking process(GAS will be accounted on your NEO wallet).
It’s important to note that GAS is a deflationary currency, because all the GAS will be distributed to NEO holders during the next 22 years
This feature described before is possible thanks to a a consensus mechanism called Byzantine Fault Tolerant algorithm.Wallets who have more than one NEO coin earn constantly GAS passively.
In conclusion:
Neo is fighting to be one of the best crypto in integrating fiat money(dollars,euros. yuan..) into the crypto environment.We will probably see more projects in the future built on top of NEO, and this could rise NEO price up in a considerable way.The more people will create projects on the top of this blockchain, the more GAS will be needed to make them work.But GAS can only be produced my NEO nodes, an NEO coins are just 65 millions.This means that the GAS that can passively earned by NEO holders is a deflationary currency.Holding NEO means holding a fixed amount digital asset that allows you to earn passively a deflationary currency used to build the next level of Internet. The internet of Value.
Always remember that you are the only who is responsable for your own finances, and cryptocurrencies are a risky environment.Always make your own research, as this article is just a personal opinion, and should not be considered as a financial advice.
*What is a Smart Contract?
For example,let’s think about a ship with a cargo full of oil that has to be delivered from a country to another.Seller and buyer, have to be sure that the amount is paid JUST IF the products have reached destination in the conditions previously agreed.If the oil gets robbed during the shipping process or its quality changes, then the amount is not paid.We can use these “If statements” into the code to transfer value.This adds another layer to the internet.Banks are not anymore necessary for the transfer of value.
**What is an Initial Coin Offering?
An ICO it's similar to an IPO, but in the crypto environment.People can raise money on their projects by creating their own cryptocurrency on top of a blockchain platform.Until now it's not regulated and many countries still don't know how to face this new way of raising funds
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NEO has been working with the Chinese government all along. We are starting to see the benefits of that relationship.
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