NEO versus Ethereum: Why NEO might be the strongest currency in 2018
NEO versus Ethereum who’s the ultimate winner? NEO is undoubtedly a platform with a purpose; the question isn’t whether it can compete with Ethereum but if it needs to. To a developer, functionality of a platform is the most vital quality. As it may be too early to claim loyalty to any particular brands in the blockchain industry, functionality is key. The platform that performs better than its counterparts wins over the developers.
I have pored over information on both NEO and Ethereum and summarized it here. On that note, I will admit that I did more in-depth research on NEO as there is already so much about Ethereum out there. As such, I have focused on expounding on NEO and then comparing it to Ethereum’s capability.
If Ethereum is Goliath, NEO is David. Ethereum was here first, taking the crypto world by storm in an exciting and revolutionary way. Almost every ICO today is built on Ethereum’s ERC20 token platform, not to mention that Vitalik Buterin is currently one of our greatest minds. However, the fact that Amazon’s market cap is being closed in by Alibaba and that the social scene in China is dominated by WeChat, it is a clear indication that China plays only by its own rules. With their own technology and networks, the nation of the Red Dragon cares little what the U.S is up to.
Ultimately, the two cryptocurrencies are after the same end in the crypto community- both aspire to be the tech platforms for the new internet (ICOs- Initial Coin Offerings, Dapps- Decentralized Applications and smart contracts.
NEO and Ethereum Overview
While both platforms serve as a toolbox for developers, each one differs as far as their objectives go. I will summarize each one as below.
Ethereum’s objective is to create a platform that enables the development of Dapps, and in doing so creating a “freer, more globally accessible and more trustworthy internet.”- internet 3.0. The goal here is for Ethereum to be the platform for Dapps, and so far they are largely accomplishing this. They are all about relinquishing more control and options to users and developers.
NEO, on the other hand, “uses digital identity and the blockchain technology to digitize assets, to use smart contracts to automate digital assets management, and to realize a “smart economy” with a distributed network.” NEO is about creating a product for the future. Not only did they rebrand from Antshares to NEO in June 2017, they successfully refocused their marketing as well. While it might utilize quite a number of similar technologies as Ethereum, NEO’s goal is to be the platform for a new smart economy.
In summary, Ethereum develops in response to new demands whereas NEO develops in anticipation of future demands.
A smart economy is in the future, and as a result, the platforms need to be designed in a way that they can accommodate this. NEO hence places special emphasis on remaining compliant with government regulations. To accomplish this, they need a digital identity and digital assets. Ethereum’s, digital identities aren’t much different from how NEO’s work but their secured digital assets aren’t necessarily compliant with regulation.
The biggest differences between Ethereum and NEO
Ethereum and Bitcoin use the same protocol-Proof of Work (PoW). The problem with this is the massive energy it consumes. Hence, it is my opinion that PoW will soon be outdated as the industry transitions to Proof of Stake (PoS) as it runs on virtually no energy in comparison.
NEO uses Dbft (Delegated Byzantine Fault Tolerance). This protocol works to get everyone to be honest and work together. It is also modified version of the standard proof of stake protocol.
Neo can process transactions faster than Ethereum since its protocol is much more streamlined than the latter’s PoW. NEO can transact at speeds of 1,000tps topping a maximum of 10,000tps while Ethereum transacts at speeds of 15tps with a maximum of 30tps.
Forking and Scaling
Much like Bitcoin, Ethereum forks in order to update its software. Forks happen due to lack of finality in Ethereum’s consensus mechanism. Conversely, NEO has finality and cant fork- an important quality for adoption.
Decoupling of GAS and NEO
While Ethereum’s native token is ether, NEO decoupled itself from the token needed to run it-GAS. Since NEO was never meant to be transacted with, GAS was developed. The merits of having two tokens-NEO and GAS are enormous when working with PoS protocol.
Smart Contract Language
Ethereum and NEO biggest difference is the coding languages. Ethereum’s contracts must be written in solidity- a language created just for Ethereum. Neo, however, supports a variety of five different languages with plans to support more in the future. Few people know solidity and would have to learn it in order to work with Ethereum, giving NEO an advantage as far as adoption is concerned.
Smart Contract Execution
Smart contracts use virtual machines. These are machines that run on the computers of miners to execute the contracts. Essentially, NEO has a faster and more efficient way of executing smart contracts than its counterpart.
NEO’s Recipe for Success
In my opinion, NEO has two avenues for success: All the aforementioned benefits allow it directly compete with Ethereum allowing it to become the go-to platform for ICOs and blockchains. The second avenue is that it doesn’t compete but instead becomes the DApp platform and the smart economy foundation for East Africa.
Although it evidently beats Ethereum on a number of fronts, the latter platform is already established in the industry, hence overtaking it will be quite a challenge. However, I strongly believe that it has a lot of room to grow. Similarly, taking the 1.4 billion Chinese, and the untapped surrounding area results in a market that will easily trump Ethereum’s $44 billion market cap. Having currently banned ICOs, the question is that if China eventually legalizes ICOs, can this make NEO the big man?
Ultimately, my last take on this issue is that NEO is basically Ethereum but with a specific purpose- To enable a smart economy.
By felix Kingstone