A New Blockchain Platform is Taking on Ethereum
NEO is going head-to-head with Ethereum, claiming that its platform provides more options for scripting smart contracts and enhanced reliability.
New Kid on the Blockchain
Cryptocurrency is on the rise and, as a result, there’s no shortage of companies looking to establish themselves as an essential part of the trading process. In addition to organizations fielding new coins, there are firms that handle other pieces of infrastructure, like Blockchain specialist NEO (formerly known as AntShares).
NEO’s biggest competition is currently Ethereum, the blockchain platform behind the prosperous Ether token. Both offer support for programming languages — Vitalik Buterin, who originally conceived Ethereum, has felt that the absence of such support has been a major detriment to cryptocurrency — but the group behind NEO maintains that its implementation has several advantages.
Smart contracts are automated agreements between traders that can call upon all kinds of different checks and triggers, ranging from a particular date to the balance of a particular account. NEO allows developers to write smart contracts and other projects using familiar programming languages like .NET and Java, with plans to support Python, Go, and JS in the future.
NEO also diverts from the likes of Bitcoin and Ethereum in eschewing the need for anonymity. The platform uses a digital identity system that’s intended to help it integrate with the real-world economy. Digital identity is expected to give NEO a major advantage as it attempts to spur adoption in its origin country China.
Bitcoin and Ethereum use proof-of-work (POW) to validate transactions, but NEO instead uses a delegated Byzantine Fault Tolerance (dBFT) consensus method.
“POW has strong availability, but it also has a big disadvantage, because it cannot ensure finality. Forks and lone blocks will occur easily,” explained company co-founder and CEO Da Hongfei. “dBFT ensures finality, which means that once a transaction is confirmed by a block, it is confirmed permanently without being rolled back or revoked. In our point of view, finality is far more important than availability in an important financial system.”
Bitcoin was the first cryptocurrency to really make a splash, and it still leads the pack. However, it is still too early to determine the ramifications of its recent fork, which could turn out to be either a blessing or a curse.
NEO has been designed with a focus on avoiding the security issues that might prompt a fork. Reliability and stability are a big priority for its creators, having seen projects like Bitcoin Unlimited come undone as a result of such issues.
It certainly seems like NEO is being set up to fulfill the needs of tomorrow’s cryptocurrency market. That being said, competition from the likes of Bitcoin and Ethereum won’t be easy to overcome.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.