While all nearly all cryptos have some kind of market value and can be bought and sold on exchanges, some are primarily monetary instruments used for crypto investing (like Bitcoin, which was originally conceived as a kind of “digital gold”), while other are more technical, like Ethereum, which was built to be the foundation of a new kind of software application or contract.

NEO, or neo crypto, belongs to this latter group. In fact, it’s often described as a rival or alternative to Ethereum, whose token, Ether, is one of the most popular and valuable cryptocurrencies.

In this article, we will dive deep on NEO crypto to explain the following:

  • What is NEO?
  • How is NEO used?
  • Types of NEO cryptocurrency
  • Is NEO a good investment
  • Where to buy NEO

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What is NEO?

The purpose of NEO is to register, trade, and circulate multiple types of assets on its NEO blockchain. Designed by developers Da Hongfei and Erik Zhang, NEO aims to be an open network for the smart economy, by allowing users to store and exchange digital assets.

Originally known as Antshares, the project was rechristened NEO in 2017, two years after the code was first introduced.

How is NEO used?

NEO hosts smart contracts, one of the most foundational ideas in cryptocurrencies. Smart contracts are self-executing agreements typically used for the exchange of digital goods, or digital assets. They are verified entirely digitally and go into effect without any third party or authority enforcing them. The contracts are written into computer code and then stored on a digital ledger like a blockchain.

Different blockchain projects are designed to support these contracts, and NEO is one of the most prominent. NEO also supports DApps, or decentralized apps. These are both functions that Ethereum also serves.

Benefits of NEO over Ethereum

NEO has a few attributes that may make it an improvement over rival Ethereum:

  • It allows smart contracts to be written in a variety of programming languages. These include C#, Java, and Python. In contrast, on Ethereum developers can only use Solidity, which is considered niche.
  • It can handle transactions faster. NEO’s network can handle up to 1,000 transactions per second, vs. Ethereum’s approximate 15 transactions per second.

Digital Identification

One area of focus for NEO is developing digital identification for users and traders. This digital identification system is meant to help NEO work better with regulators, as one of the goals of the project was to create a more regulatory-friendly system.

NEO co-founder Erik Zhang wrote in 2019 that “we keenly recognize governance’s pivotal role in the long-term evolution of a blockchain as the common good collectively owned by stakeholders and more broadly the entire surrounding communities.” These are not crypto-anarchists.

Types of NEO Cryptocurrency

There are two kinds of cryptocurrency associated with NEO: NEO and GAS.

GAS is supposed to be the fuel that NEO runs on (get it?). When you hold NEO tokens, you earn GAS over time. Gas is used to pay transaction fees and smart contract execution fees, according to NEOs developers. It cannot be purchased with dollars (although you can use other cryptocurrencies).

Basically, GAS is given to those who do the computational work of keeping NEO running and can be used within NEO. Some 100 million GAS tokens will be created roughly over the next two decades.

How much are these currencies worth?

There are over 70.5 million NEO currently in circulation (out of a total of 100 million that were created when the block launched). As of March 2021, NEO is valued at $41.26 and has a market cap of around $2.9 billion.

There are currently about 10 million GAS in circulation, with a market cap of around $119 million. As of March 2021, GAS is valued at $11.83.

Is NEO a good investment?

Investing in crypto is considered a high-risk pursuit. Like any cryptocurrency, NEO has experienced highs and lows since its inception.

NEO rode one of the first crypto booms, hitting nearly $197 in January 2018. The price dropped substantially, trading between $16 and $20 from July 2018 to September 2020. Like other cryptos, it rose in price in late 2020 and early 2021.

Some observers think that NEO, thanks to its emphasis on regulatory compliance, could benefit from the Chinese government’s strict oversight of the cryptocurrency industry.

Cryptocurrency regulations are a huge issue for cryptocurrency miners, users, and investors, and NEO is no different. Anyone looking to invest in NEO should be mindful of how various governments, especially in China, are looking at cryptocurrency mining, smart contracts, and smart assets.

Where to Buy NEO

Investing in NEO crypto is a bit different from popular ways to invest in cryptocurrency. While many well-known cryptocurrency tokens or assets are available on US-based crypto trading platforms like Coinbase (or PayPal or Square), NEO is not available on these platforms.

If you want to buy NEO, which is tradable, you have to use a platform like Binance. The exchange offers NEO trades with both US dollars and bitcoin. It’s also a good idea to remember that as with any crypto investments, investors are expected to pay cryptocurrency taxes when applicable.

The Takeaway

NEO is a crypto with a purpose: to support smart contracts and DApps, in much the same way Ethereum does, but with a few notable differences that may be considered improvements.

For interested investors, there are many different types of cryptocurrency to trade. 

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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