Where did NEO actually come from? Around the Neo platform is a lot of turmoil. This is not surprising given the complicated history of this project.

Neo was born under the name AntShares (ANS) in 2014. AntShares, founded by Da Hongfei and Erik Zhang, was named the first Chinese blockchain platform. In 2016, supposedly in response to the growing interest in AntShares and the need for a blockchain solution that meets the requirements of both government regulators and private companies, Da and Erik founded OnChain, a company that offers blockchain-based financial services. In 2017 AntShare was renamed Neo.

Neo and OnChain are headquartered in Shanghai. It is definitely important to say that Chinese regulation can have a far-reaching impact on cryptomarkets and their development. Neo is also vulnerable and very well set up to inform and respond to this Chinese mistake.

Smart Economy

The Neo whitepaper is our key resource for understanding this platform. Unfortunately, some aspects of Neo are still work-in-progress and different details are unclear. Occasionally, their whitepaper reads more like a summary of all smart contracts in general than as a specific guide to Neo’s internal operation.

The concept is a Neo smart contracts ecosystem, similar to Ethereum. It enables its users to automate the storage and exchange of digital assets. In order to keep pace with already established smart contract implementations, Neo uses evolving technology and cooperation with the Chinese authorities to achieve the already mentioned goal of “smart economy.”

Digital Identity

In 2005, the Chinese Digital Signature Act allowed digital signatures to be legally binding. The problem here arises when we look at ways of digital identification that meet the requirements of this regulation. It is very difficult for some to come across. In 2016, in partnership with Microsoft China, OnChain founded Legal Chain with the clear goal of providing such ways of identification. Legal Chain wants to apply the invariability and transparency of blockchain systems to meet these requirements with the goal of integrating face and voice recognition over time.

This concept of digital identity is a key element of the smart economy that Neo lectures. Keeping a trusted connection between the digital and the physical person means that you should be able to trace the legally bound identity for the abuse of the system.

Consensus

Neo uses a consensus mechanism called Delegated Byzantine Fault Tolerance (dBFT). Participants on the system are able to design certain nodes as bookkeepers. The Bookkeeper Node must maintain a minimum NEO balance and also meet certain performance requirements.

Bookkeepers are employed by verifying blocks that are written to the blockchain. If two-thirds of the nodes in the network agree with the bookkeepier version of the blockchain, the consensus is reached and the proposed version of the blockchain is approved. If the consensus fails, another bookkeeper is called to repeat the process.

Because this consensus must only be replicated across a subset of the network, it is supposed to be more effective than the classical Byzantine Fault Tolerance. The network as a whole uses fewer resources and is able to handle a larger number of transactions.

With dBFT and a few other key optimizations Neo claims to handle more than 1,000 transactions per second to optimize to more than 10,000 transactions per second. For comparison, Ethereum currently has the ability to handle 15 transactions per second.

This is a great advantage, but we can also say that this strengthening will make Neo more centralized. Digital Identification and dBFT can serve to limit control over the system of the selected group.

NeoContracts

Smart Neo contracts are called NeoContracts. One of the major obstacles in designing smart contracts is that their results must be reproduced reliably across the network.

If a contract is listed in a blockchain and yields different results on different systems, the network can not reliably agree to how blockchain actually looks and blocks will be stopped. But a smart contract can not perform meaningful operations without having access to some variables.

Timestamps – You might want to use smart contracts to automate weekly employee payouts, or you want to pay an account with a reseller every 30 days. Your contract will have to know what’s in time. To provide a consistent access to time data, Neo registers the timestamp to each new block that is generated. The new block is added every 15 seconds, so the contracts have access to the current time within 15 seconds.

Randomness – Also useful is the ability to generate random numbers. But how do you provide a random number while ensuring that the same random number is identified across the network? To provide smart contracts with random access, a random number is inserted into the Nonce field of each new block. Contracts can then refer to this Nonce field to gain access to a random number.

Data Storage – Data in NeoContracts can be stored privately, so they are accessible only for the contract they are linked to. Data can also be stored in a global context where it is accessible for all contracts in the network. External data must be moved to the Neo blockchain and then forwarded to those private or public storage sites for reference to the contracts.

Tokens

The platform features two different tokens. NEO and GAS are cryptographic currencies that drive the Neo network. Both NEO and GAS are each limited to 100 million tokens.

The NEO Token is a representation of NEO market shares and are indivisible. NEO holders receive voting rights in NEO ecosystems as well as GAS dividend rights. 50 million NEOs are distributed across an initial crowd of funding. The remaining 50 million tokens are fixed by an annual lockout period, which expires on October 16, 2017.

These locked tokens are to be managed by a NEO Council to support healthy development and maintenance of the ecosystem. 10 million tokens are dedicated to the rewards of core developers and members of the NEO Council, another 10 million are to be used to stimulate the Neo developmental ecosystem, 15 million tokens are to be retained as “fuse” and the remaining 15 million are to be invested in the block of ecosystems supporting Neo.

The second token, which Neo offers, GAS, is generated at 8 GAS per block during blockchain construction. The production speed is reduced by one token for every 2 million blocks that are generated. Sometime around 2039, the GAS will reach 100 million and production will stop. Unlike NEO, GAS is divisible.

GAS dividends are also accumulating as charges in the network. Users pay in GAS to start and run smart contracts. Fees are proportional to the computational means consumed by the contract. These fees are distributed among bookkeepers as a reward for their network activity.

Special Features and Functions

Apart from the core protocol, Neo team is working on a number of side projects from which Neo Ecosystem can benefit.

Superconducting Transactions

In the traditional currency exchange, orders are placed and closed at a centralized market place. This process is effective, but requires the user to have control of his resources by the exchange office.

By automating placement and closing orders across a consensual network, you can make sure orders are closed and processed fairly and transparently, effectively creating a decentralized exchange office. However, this also causes slow transactions, since transaction settings must be confirmed across the network.

Neo offers a system where the exchange transactions are matched to the blockchain, but the closing of the orders is arranged outside the central exchange exchange chain. Neo these transactions called “Superconducting Transactions”. These are intended to convey the effectiveness of centralized bureaux combined with the security of decentralized exchanges.

NeoX

NeoX will allow transactions to move between blockchains. I could not find too much detail about this protocol, but similar protocols include generating smart contracts that lock on one blockchain in exchange for access to alternative chain resources.

NeoFS

NeoFS offers larger files to be distributed and distributed across the network. Users can specify the level of reliability they expect from the file. Files with lower reliability can be stored and collected at a minimum charge. For larger money, data can be stored on more secure nodes.

NeoQs

Quantum computers compromise the security of certain cryptographic methods. Neo uses a lattice-based cryptographic mechanism called NeoQS (Quantum Safe). This mechanism is theoretically immune to attacks from quantum computers. It is unlikely that quantum computers will affect cryptographic systems in the near future, but even so, NeoQS creates a sense of security.

Source: https://cryptosvet.cz/co-je-neo/

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