NEO is doing amazing both in terms of development as well as price. Now that the price has surpassed $150 per NEO, one may start to wonder about the implications of the fact that NEO is indivisible.
NO LESS THAN 1 NEO
What I mean by indivisible is that you cannot own fractions of a NEO. You own either 1 NEO, but you can not own 0.5 NEO. NEO's approach is that NEO tokens are actually NEO shares and just like with normal shares, they are indivisible.Interesting fact: Despite the 100,000,000 total supply of NEO, the indivisibility makes NEO in fact more scarce than Bitcoin. Yes, Bitcoin's total supply is about 21 million, but you can (and most people do) own fractions of a Bitcoin. Whereas with NEO, since you cannot own less than one NEO, there are at most 100 million people in the world who will own one NEO, ever. And considering I own many more than one, and many own many more than I do, I would estimate the maximum total potential NEO owners to be far, far less than 100 million. They are, in fact, a precious and rare commodity.
If you own less than NEO on an exchange - I'm sorry, you do not actually own that NEO and the exchange is 'virtually' splitting it up for you. They cannot be split and you cannot withdraw fractions of NEO.
HIGH PRICE MAKES IT UNATTAINABLE
As the price of NEO grows, so does the hurdle to get into NEO. Right now it already costs $150 to step in, but this may grow a lot in the future. What will happen if the cost of entry is in the thousands? Contrary to Bitcoin and others, NEO can't tell small investors to 'just buy part of it if you can't afford a whole one'! At some point the price may be so high that only wealthy people and institutional investors may step in.I'm not sure if that is good, bad, or of no importance. In a way a higher price may attract more serious investors, but it may also shy smaller investors away. Then again, NEO was never intended to be a payments system for everybody - it's a platform for the smart economy. It's okay if it's the corporations buying in - NEO shares were never intended to be a means of trading for the average consumer.
GAS TO THE RESCUE
Fortunately there is also GAS, the native 'gas' token of the NEO blockchain that is generated by NEO holders. Contrary to NEO, GAS actually is divisible. This is because GAS is supposed to be used for (eventual) transaction fees and smart contract deployment, and in the case of fees they will be low and possible variable, and as such a divisible unit was necessary and wanted.I believe that when NEO itself becomes very expensive that investors may start to turn toward GAS instead, as it is closely linked to the NEO price and seems to follow it at a more or less 50% of the price of a NEO, though it does lag behind it a little bit.
(calculate your GAS generation here)
For now GAS doesn't serve much of a purpose yet and is mostly of no interest to most investors, but as time progresses and NEO continues to grow I think we're going to see an increasing interest in GAS. Even though GAS will be 'released' into the market by NEO holders, it will take 1 NEO 22 years to generate 1 GAS, so the supply remains limited. Especially since GAS has a low coin supply.
Right now we're seeing NEO lead the pack and GAS following in terms of price, but perhaps due to the dynamic, once NEO gets too expensive we will see GAS move first. And obviously if the GAS price should rise, naturally the NEO price must also.
I think splitting NEO and GAS apart into two tokens is a brilliant move by the NEO team. It makes investors go crazy over which one is the most valuable, and I see a lot of potential for the two to affect one another's price.
Once again an interesting post @pandorasbox :-)
You point out some interesting things. There is an increasing interesting in NEO at the moment, because you need it to get into the NEO ICOs. That results in some nice price action. On the other hand, what we see is that once an ICO is over (Trinity this afternoon and currently TheKey with an offline website), people dump their NEO if they didn't get in.
On the short-term we also have the effect of the Bittrex NEO wallet being offline, artificially cutting off quite some of the liquid supply. On the long-term that does not really matter of course :-)
That 1,500USD you mention sounds good to me though!
Yep the NEO ICO season is officially open :)
Too bad there's lots of problems with the ICO's so far, but they'll fix it eventually.
I'm kind of disappointed they don't use GAS as the native token to invest in ICO's though!! Now GAS still has no real use, despite that it has a price :)
@pandorasbox half of my portfolio is NEO. Im very bullish about it! Definitely it is going to the moon!!!!!!
I'm at 40% NEO, so yes, we're going to the moon together :D
Why even stop there? $1500 NEO in due time is perfectly reasonable if the market maintains.
wow! 1500??? thats quite optimistic, but not impossible at all... and do not forget GAS :)
any price prediction for GAS?
I think $1500 isn't that crazy TBH! and GAS tends to follow at about 40-50% of the value of one NEO so that would bring it to $500-750 if it holds up over time
I've been pretty happy the last week or so with my portfolio being about 90% NEO. π€
Haha, I bet you are! I'm laughing myself too! The entire market is red, but my portfolio is higher than evr! nly 40% NEO here, but still good days :D
Just keep hodling that NEO!!
Has not disappointed thus far!
Great post outlining the scarcity of Neo! I am doing a post overviewing how Neo can be used for passive income - would you mind if I include the passive income calculator in it that you have in this post? I will credit you of course!
Sure thing! The more people learn about NEO and crypto in general the better! NEO's gas dividends are one of the best parts for investors!
Thank you! Agreed!
I wonder how many people transfer their crypto from their exchange wallet to the Neo wallet? As you say if it's on the exchange, to the average investor you can buy 0.5 Neo and they are non the wiser. You make a lot of very good points. I've been holding Neo for awhile now. $1500 sounds good :)
A lot of small and new investors don't know this, if they haven't done their research. But the big players obviously know.. or perhaps they don't because they don't ever bother with fractions?
I'm sure a fair deal of newbies are disappointed from time to time though. They must just hodl it on the exchange instead..? if they choose the right exchange they can still get GAS
"if they choose the right exchange they can still get GAS"
I didn't know you could claim gas on an exchange. Good to know.
Yeah I think most people probably just hold on an exchange. Maybe the big players do to so they can sell it quickly if they wanted to.
You don't claim it per se, but Binance and Kucoin both claim it for you if you hold NEO on there. I believe they pay it out once per month?
But it's better than Bittrex, which doesn't pay out the GAS and simply collects it for themselves!
Bittrex's Neo wallet has withdrawals suspended at the minute as well. Thanks for the information on Binance.
It wont go too far before correcting soon! I think that is beginning. close to 200%+ increase since it bottomed at 49. I think the ABC correction has started. We will see it likely down back to 100 or so before it makes a run to 300-400 like Monero. The run is very similar. Where monero came back down to 90s and stayed there for a while and then kept going up and made to 400.
I'm not sure we'll see 100 again, as we've been hovering around 100 for a while before the recent rise, but you may be right. I'm feeling $150 as a support, with potential to shoot through to $300 if we pass $200 at any point.
But I am wary of BTC. Once it starts moving it's game over for the altcoin gains! Chart may look awesome, but Bitcoin determines the course of NEO in the end.
I don't care either way, I'll just hodl it all through any dips upcoming. If we dip, so will everything else, I'm sure of it.
Though it's only about 10% of my overall portfolio, NEO has been one of my favorites, especially lately as it performs in a sea of red.
It's very interesting what you say about the scarcity because of its indivisibility. I never put it together that that was the reason I could only withdraw full coins from the exchange. But it's brilliant and thanks for bringing it to my attention.
Getting GAS for hodling NEO is amazing as well. This is a great project!
You're welcome!
And I would hold on to that 10% NEO of yours for at least another year. All those other projects are still promises and whitepapers, but NEO is the first next-gen Ethereum to actually be here and have a community. It's taking off in 2018 if you ask me. If Cardano can do $30 billion on a whitepaper then NEO should easily surpass that with a working product and expanding ecosphere!
And holding and generating GAS is my #1 reason why I ever invested in NEO! I wanted a Masternode for passive income but they were all too expensive. Then there's NEO, which gives the same ROI except you can hold smaller amounts too, and you don't have to do a darn thing to get it either! Best coin for hodlers, if you ask me! :)
Oh, I will not let go of my NEO!
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I ended up with NEO because of Bitfinex ousting US investors and I had to find something with a working wallet. I was actually holding IOTA but never could get that wallet to function. Pitty because the price of IOTA really took off from the $0.5 point where we had to sell and get off bitfinex in November. I picked NEO because of your interest and I am pleased with its performance. I have one other coin that stakes Neblio(NEBL). I actually prefer Neblio because it does not split the currency and it pays 10%.
I think NEO and IOTA are both good holds, but I personally put more faith in NEO as it is much further ahead in development. 2018 is a big year for NEO, while IOTA is aiming more for 2019-2020 I think. It kind of sucks that you missed out on the crazy IOTA gains, but I personally feel like NEO, despite it's gains, has not had 'crazy gains' yet like some other coins have. I feel it's overdue for NEO to do something like Cardano, TRON, XRP or RaiBlocks did. But massive spikes have not been NEO's thing too often, so perhaps I'm mistaken.
I dare not let go of my NEO, though! I just know the moment I do, it's going to shoot up like crazy and I'll regret it forever ;)
I will have to look into Neblio, i don't know much about it yet
One of the best real world uses for Crypto at the moment with great potential. Makes up a major part of my portfolio! cheers mate
Good article you discuss exactly my thoughts. I believe the indivisibility will initially be a good thing but later on it may become Neos doom. As more people will not be able to afford neo the market cap will remain low since the swarm money will not flow in. If they see neo as a share then they will eventually split it imo like many other shares on the stock market have done (apple etc).
Gas will eventually become the currency of neo and neo the expensive share of it. Seeing that Gas is not at a fixed supply it will probably be kept at a constant price by neo in order for it to be able to become a true currency. I treat neo as something holy. I dont trade it. I keep it for my returns and for the ecosystem. Its really clever, but basic. If you want an ecosystem you have to give something back.
Though I would love for neo one day to become an economy of universal basic income once ID verification gets on to it. So that people can have a kind of a vote (money) for what it is that they want to see succeed, because lets be honest, rich people have more votes (money). Our economy does not have a "what will benefit society" kind of mentality but a "what is in it for me" mentality.
Hopefully something will come along the blockchain revolution which will address this. People don't realise the biggest gift we have is the society we build for each other. Money is meaningless. You realise that once you find yourself in the ER. My 3 cents ;)
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