NEO

NEO is a smart contract platform designed for the new digital smart economy. It is very similar to Ethereum (in fact, it’s value increased tenfold when it rebranded itself as the Chinese Ethereum). However there are a few important differences.

  1. China
    1. NEO is a Chinese company. The Chinese government is notorious for giving preference to homegrown technology companies over foreign ones. See Wechat.
  2. Compliance
    1. The initial blockchains were supported by people who believed they were valuable in that they could escape the escape the control of governments. While ethereum has not strictly followed this ethos, it wasn’t specifically designed with government compliance in mind either. NEO is different. NEO creates digital identities. This means that everyone transacting on the network (from miners to smart contract creators) have to have their identities verified. This could include facial recognition and is in line with the design of Wechat.
  3. Digital Smart economy
    1. NEO is designed for what they see as the future of a digital smart economy. One where assets are digitized, swapped or used in other creative ways that have not been developed thus far. Moreover, ownership of these assets will be recorded onto the blockchain because of the digital identities required to use the network. Smart contracts are explicitly under government regulation. While Ethereum has this capacity (they require dapp operators to reveal their identities), it is not a core feature of their network.
  4. Atomic Swaps
    1. NEOX will enable users to swap digital assets across different blockchains. While Ethereum has executed an atomic swap, this is also not a foundational feature of their network. Therefore NEO perform this function more efficiently than ethereum does.
  5. Protocol
    1. NEO uses a delegated Byzantine fault tolerance protocol while Ethereum uses a proof of work system that they are moving to a proof of stake system.
  6. Transactions per second
    1. NEO can theoretically process 15,000 transactions per second. Ethereum can only process 30. While both systems will need to increase those transactions per second to scale to their blockchain to one that most of the world can use, NEO is ahead of Ethereum in this regard.
  7. Forks
    1. It is possible to fork the ethereum network even though it is disincentivized with the current structure. It is not possible to do so with NEO.
  8. Coding languages
    1. Ethereum supports one coding language. Solidity. It is not a widespread language and most developers have to learn it before developing smart contracts on the network. NEO on the other hand supports 5 different coding language, all of which are widely used among developers.
  9. EVM
    1. Smart contracts use what are called virtual machines (VM). Virtual machines have to include smart contracts on the network by recording them exactly as they were written. They also execute smart contracts by running inside the computers of miners or other validators. The VM is the environment that the smart contract runs in. Thus, if we want to know how efficient and effective smart contracts can be, we need to analyze the VM.
    2. NEO’s VM optimizes smart contract code before executing the contract. It takes the code and reorganizes it to make it more efficient. Ethereum does not have this feature. While NEO’s contract execution takes slightly longer than Ethereum’s, it is less prone to bugs that may affect the system. This is an approach to a problem that other blockchains like Tezos have tried to solve. While Ethereum plans to roll out this feature, there is no timeline for it. Ultimately, this allows NEO to execute and run complex smart contracts more efficiently than Ethereum.

The main difference between the two projects is that NEO is designed for a smart economy while Ethereum was developed to be a smart contract platform. This means NEO is better suited for scaling in a country like China (among other things). Because of their relationships with the Chinese government, and the government’s tendency to favor Chinese companies, widespread adoption is likely if they can overcome their technical hurdles. However, influential skeptics have cast doubt on the feasibility of these hurdles. Moreover, former founders have left to work on projects like Nebulas


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