After the 2017 crypto bull-run and the devastating events that unfolded afterwards, many countries, financial institutes, professionals and analysts cried out for some kind of regulation in the cryptocurrency markets. While many countries imposed a ban on the usage and trade of any kind of cryptocurrency due to their decentralized and unregulated nature, a growing interest towards the development of a regulation-friendly cryptocurrency was noted. NEO Onchain Technology is one of the examples as it is designed in such a manner to allow for regulation and follows a centralized approach.
What NEO offers is basically a platform for corporations to develop and implement their own decentralized applications. For now, their main focus is the Chinese market for some obvious reasons. China is one of the main countries that has banned cryptocurrencies. By offering a regulated and a centralized blockchain technology, it is eager to capture the Chinese markets.
NEO is developed by a Chinese company named Onchain. Originally NEO was launched as Antshares in 2014, but was later rebranded and relaunched as NEO in 2017. The founders of Onchain, and the public figures branding NEO, are Da HongFei and Erik Zhang. It is also rumored that Onchain has the support of the Chinese government at its back. However, what is hard to determine is whether this development around NEO is a positive one or worrisome. Chinese government has been part of controversies where it seized money from its citizens, and same could be a possibility with the NEO users.
Unlike all other cryptocurrencies, which are largely or partially decentralized, NEO follows a completely different approach. It is based on the “delegated byzantine fault-tolerant” methodology which uses consensus nodes to distribute voting power. The founding company, Onchain holds seven of these consensus nodes, thus keeping the control of the network with them.
In May 2019, NEO Foundation launched NEO tokens worth $100 million. The funds raised through the sales of these tokens are supposed to be used for further research and development of the blockchain technology. However, the release of all the tokens in a single-go could be damaging as it might result in immediate inflation.
The NEO platform can support the development and integration of decentralized applications on top of its network. The network also showcases a transaction through put rate of up to 10,000 transactions per second. Of course, this high transaction rate is achieved at an expense of decreased decentralization. The platform currently supports C++, Java, Python and Go as programming languages. However, these languages are not limited in any way by the platform and can become a reason for the deployment of malicious code on the network.
The main lead of the development team is Erik Zhang, who is currently working on the upgradation of the consensus algorithm known as dbft2. The algorithm, once in place, will prevent any attempts of forks on the NEO network. The development works can be traced out on their Github repository.
NEO potential is very promising. Even though it is limited in terms of its decentralization, there are still a number of companies that are ready to deploy their decentralized applications on NEO’s network. NEO will sooner or later emerge as the single most popular cryptocurrency especially in countries that require the implementation of regulatory standards. The rest of the world who do not have their focus on regulation of the crypto-world, might continue to use Ethereum blockchain which is very wide in its approach and incentives.