Gas is the operational token for Neo, a blockchain project that offers smart contract functionality and support for decentralized apps and ICO’s. Neo was launched in 2014 by Onchain, a Shanghai-based company that designs and builds private blockchains for businesses. Onchain’s distributed network architecture helps companies assess the usefulness of blockchain assets in their current business practices. The Neo platform is Onchain’s public-facing product.
Neo is often referred to as the “Chinese Ethereum” because of its similarities to the Ethereum project. It was originally released under the name “AntShares” as a solution to the issues caused by China’s Digital Signature Act of 2005, which allowed individuals and businesses to digitally sign legal documents. While convenient, the law set tough verification requirements for the digital signatures.
AntShares founders Da Hongei and Eric Zhang believed blockchain technology was the perfect tool for verifying digital signatures. They decided to build a platform for verifying digital assets and identities that was complaint with the Chinese government’s regulations. As a result, AntShares became the first open-source blockchain to gain widespread acceptance in China. The platform was rebranded to its current name and image in 2017 to give it more credibility.
While similar to Ethereum in many ways, Neo is arguably easier to adopt because it allows developers to build applications using a variety of programming languages, including JAVA, GO, and C/C#. In comparison, Ethereum currently only allows developers to code apps using the Solidity language. Allowing developers to use so many languages removes the barrier to entry and significantly increases the pool of developers.
Gas Pricing, Market Cap and Volume
Like Neo, there is a maximum available supply of 100 million GAS tokens. The circulating supply grows by 8 tokens with every block. The block interval is 15 to 20 seconds and around 2 million blocks are generated every year. At the current block rate, Gas’s hard cap will be reached in approximately 22 years.
In less than a year, Gas’s market cap has managed to reach over $250 million USD, earning Gas a spot in the top 50 crypto assets by market capitalization. Gas’s stability is directly tied to the Neo token, which has managed to become one of the top 10 crypto assets by market capitalization with a valuation of over $7 billion USD. The rate of adoption of Neo as a platform for smart contracts will determine the success of both GAS and the Neo token as investments.
How Neo Works
Just as how everything on the Ethereum network is fueled by Ether, so are Neo’s smart contracts and dApps fueled by Gas. Businesses running contracts on Neo must have Gas to power their transactions.
Neo doesn’t use a proof-of-work system like Bitcoin or Ethereum. Instead it opted for a unique consensus mechanism called the delegated Byzantine Fault Tolerance (dBFT) to provide fast transaction times, prevent malicious system attacks, and keep the network “fork proof.” The dBFT system acknowledges two types of players: professional node operators called “bookkeepers” who run nodes as a source of income, and ordinary node operators who are interested in using Neo’s features.
The ordinary nodes vote on a set of bookkeeping nodes to confirm every block. During the verification round, one of the bookkeeping nodes is randomly chosen to broadcast its updated version of the blockchain to the rest of the network. If a majority of the network accepts the new version, consensus is secured and the blockchain moves on. If a majority does not accept the new version, a different bookkeeping node is appointed to broadcast its version of the blockchain to the rest of the system, and so forth until consensus is reached.
Under the dBFT system, Neo can confirm up to 1,000 transactions per second and could potentially scale to 10,000 transactions per second. It is significantly faster than the Ethereum network’s current capacity of 15 transactions per second.
The dBFT system also uses digital identity verification technology to keep track of the identities of the bookkeeping nodes. This is necessary for the platform to remain government complaint and makes it possible for government regulators, the judiciary, and law enforcement to register and monitor compliant financial assets on the network.
GAS is One of Two Tokens
The Neo platform has two tokens: NEO and GAS. Neo is the platform’s management token. It gives holders the right to vote on the platform’s governance. Holding 1 NEO token gives a user the right to vote on who will be the bookkeeping nodes for the next block. Neo holders can also vote on network changes.
The network’s consensus algorithm awards Neo token holders Gas every time a new block is created. Holding 1 NEO will earn you between 0.0003 and 0.0005 Gas per day. You can calculate exactly how much Gas you’ll earn on sites like NeoToGas.com. Neo has a hard cap of 100 million tokens, all of which were created when the platform was launched.
Gas vs. Other Cryptocurrencies
Since Gas fuels everything on the Neo network, its value is proportionate to the usefulness of the platform. It is necessary to look at what Neo can do to determine how Gas will fare in the crypto market. Here are some of Neo’s key features:
Digital asset management – one of Neo’s core goals is making digital assets that are secure and difficult to forge. There are two types of assets on the platform:
Global assets – these are transparent assets that can be identified by anyone and can be stored with different levels of accessibility.
Contract assets – these are private assets that are useful for parties that need to swap confidential information using smart contracts. They are restricted to users who have permission to access them via a given contract.
Digital identity verification – this goes back to the original signature verification problem AntShares tried to solve using blockchain technology. Once implemented, Neo’s digital identity verification feature will allow users to submit IDs, SMS authentication, fingerprints, facial features, voice recognition, and other methods to verify their identity. Verified identities could then be built into smart contracts or used to give meaning to physical objects linked to data on the blockchain.
Smart contract functionality – Neo smart contracts are easier to adopt than Ethereum smart contracts because they support different programming languages. Developers can rapidly develop new smart contracts without having to learn a unique programming language.
Buying, Storing and Selling Gas
Gas can be bought from many popular online exchanges which offer Neo. The best options include Binance, OKEx, Poloniex, Kucoin, and Gate.io.
There are several digital wallet options for securely storing Gas, including Neon Wallet, NEO Desktop Client, NEO Tracker Wallet, NEO Web Wallet, and the O3 Mobile Wallet for Android and iOS devices. Secure options for long-term storage include Ansy paper wallet and the Ledger Nano S hardware wallet. Don’t store your NEO tokens in an exchange wallet if you want to earn Gas rewards.
Liquidity of Gas
Gas is less of an asset for investment and more of an operational token, but by being so closely tied to Neo, it has managed to maintain surprisingly high market liquidity. Its value will likely continue to increase as Neo becomes more popular.
Investors interested in this project should consider buying Neo tokens and then automatically earn Gas with the generation of each new block. It’s a win-win situation because the value of Neo tokens will also go up as the platform continues to grow.
