Investigating the Top 50 Cryptocurrencies, Part 22 & 23/50: NEO Token & GAS Token (Formerly AntShares)

NEO is China’s answer to ethereum, offering a robust blockchain / token economy that enables smart contracts.

It’s tricky to write an in-depth investigation on the NEO and GAS token ecosystem.

After 21 token deep-dives and counting, I notice a lot of similarities between blockchain projects. While any one blockchain can claim to be “revolutionary,” the truth is that there are only a dozen or so truly unique blockchain concepts out there.

For example:

(1) Media-focused blockchains that enable content creators to get paid (Steem, LBRY, Musicoin, Alexandria, TRON)

(2) Blockchains trying to decentralize computing power / storage (Siacoin, IPFS/Filecoin, Golem)

(3) “Improved Bitcoin” tokens (Litecoin, Decred, BCash/Gold)

(4) Anonymity Focused Blockchains (Monero, ZCash, PIVX)

(5) Decentralized Exchanges (Bitshares, Binance)

Of course there are some truly world-changing projects in the works. I believe that steem is one of them. Nonetheless, there are some projects that I look at now and within a few minutes, I realize I’ve seen this story before.

NEO, formerly known as Antshares, is a great example of this. It’s a smart contract platform that offers all the functionality you’d expect. You can think of it as a direct competitor / alternative to ethereum.

It feels like Medium user Blockknight summed it up pretty well when he said: “At times, the whitepaper reads more as an overview of smart contracts in general than a specific guide to Neo’s inner workings.”

About This Series + Disclaimer

This post is part of a new series where I investigate each of the top 50 coins by marketcap (based on coinmarketcap.com's rankings on October 11, 2017). My goal is to help steem’s userbase become the most knowledgable blockchain community in the world.

Disclaimer: I am not an investment expert and will not be providing investment advice. I will teach you about the top 50 coins, and you can do what you want with that info.

What is NEO and What is GAS?

NEO is a token which represents ownership of a piece of the blockchain itself. Whatever % of the total NEO tokens you hold determines how much power your vote is worth for decisions relating to NEO.

GAS is the token used to pay fees on the NEO network. Whenever you perform an action that takes up bandwidth on the blockchain, you pay a small amount of GAS. GAS are issued with each new block and the rate of issuance slowly declines towards 0% over the next 20 years.

I’ll give some more specific information on how the tokens were issued & the inflation rates later in this article.

NEO’s Smart Contract Functionality

First let’s look at a few of the features that NEO offers in making smart contracts possible (shout out to Blockknight’s article again - I got this info directly from there)

Here’s the three main features that enable NEO smart contract functionality: Timekeeping, Randomness, and Data Storage. Each block contains, in part, the following information: A mark of what time the block is mined at (enabling time-specific smart contracts), a randomized nonce number that allows contracts to “roll the dice” when they need to, and some capability for data storage.

As you can see, this is similar to what ethereum does. It enables smart contracts to be executed using NEO and GAS. User BasicCrypto points out that NEO’s specific focus is on the idea of “asset management and exchange.”

NEO appears to be aimed at sophisticated financial applications like these (image from Basic Crypto’s article)

Supposedly fiat currency can be used within the NEO ecosystem as opposed to having to transact in tokens. I’m not sure how that is going to work, but the point is to play it safe regarding China’s increasingly strict cryptocurrency regulations.

Token Distribution for NEO and GAS

50% of all NEO tokens were distributed via two crowdsale rounds in 2015 and 2016. The remaining 50% were held in illiquid form for one year, ending in October 2017. These non-sold tokens are used for a few purposes: 20% of them to reward core developers and governance members, 30% to support other blockchains that support NEO, 30% as a “contingency” (???), and 20% to help support the NEO ecosystem development.

GAS tokens are issued with each new block. The number of tokens issued per block goes down by approximately 1/8th of the original amount each year until 100 million tokens have been issued. At that time, no more GAS will be issued.

The team behind NEO

NEO was founded by a team of two people: Up Hongfei and Erik Zhang.

_{Up Hongfei}

_{Erik Zhang}

I’ll be honest, I am having a hard time finding even a little bit of info on either person’s history prior to founding NEO (then Antshares) in 2014.

The problem may be that they’re from China and a lot of their past projects/bios don’t have any english translations. Does anybody here have info on what Up/Erik did prior to NEO?

Market History

First let’s look at GAS:

Huge gains starting towards the end of summer 2017, token holders were very happy at that time. After that the token slowly slipped down, and it’s still trending downwards.

Based on my non-expert opinion, it looks like this token could keep dropping. I wouldn’t be surprised to see the price ebb downwards for another few weeks/months.

Next up, the NEO chart which TBH baffles me:

How the hell does a token sit at less than $0.25 for 9 months, then end up above $30 within the next 6? That seems insane. I’ve never seen such a large jump in value, even within the crypto space… what?

Am I misunderstanding what is going on here? Can anybody offer some context?

Final Thoughts

Overall NEO feels like another good version of what ethereum is doing. As long as ethereum is alive and moving forward, I find it hard to believe that NEO could ever become #1 in this category.

I know it seems inevitable that ETH will reign supreme forever. But AOL didn’t, Yahoo didn’t, MySpace didn’t, etc… who knows. Maybe NEO is the slow-and-steady blockchain that can win the long race for cryptocurrency adoption against ETH.

I doubt it. But it’s possible. For now, I look at NEO as a solid niche token in the world of smart contract platforms.

What do you think about NEO / GAS?