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Understanding how NEO works

The world of cryptocurrency has become competitive with various digital assets vying for the top spot. Described as the Ethereum of China, NEO is an open network for a smart economy, similar to Ethereum. Its blockchain enables the development of distributed applications (DApps) and smart contracts, making it a popular platform for crypto users.

With NEO’s advantages over other cryptocurrencies, it’s no wonder that it’s considered the next Ethereum.

What is NEO?

NEO is an open-source blockchain decentralized application platform that was created by Da HongFei and Erik Zhang in 2014. Originally known as AntShares, NEO is distinguished for allowing the development of cryptocurrency and smart contracts.

With the NEO blockchain, digital assets can be easily developed because it’s open and does not have any intermediaries. The network operates on a decentralized proof of work Delegated Byzantine Fault Tolerance (dBFT) consensus mechanism.

This platform allows users to trade any cryptocurrency and support up to 10,000 transactions per second. NEO aims to manage digital assets through the use of blockchain technology and smart contracts.

A brief history of NEO

NEO began as AntShares (ANS) in 2014 when it was founded by HongFei and Zhang. GitHub open-sourced it in 2015, and by September of the same year, its white paper was published.

In June 2017, AntShare was relaunched as NEO along with its vision for a smart economy. The idea of the rebranding came from merging the past and the future since the Greek prefix ‘νεο’ means ‘new’ and ‘modern’.

How NEO works

NEO aims to simplify digital asset management by using smart contracts to create a distributed network-based smart economy system. This platform allows physical assets to be connected to its network with an equivalent digital avatar.

Additionally, NEO secures assets that are registered on its website with a validated digital identity. The digital identity makes verifiable details about the participating individuals, organizations, and other institutions.

Due to dBFT, participants in the system can designate nodes as bookkeepers. These nodes must meet the required minimum balance of NEO and its other demands. Bookkeepers are responsible for verifying the blocks in the blockchain. A consensus is achieved when two-thirds of the nodes agree with the blockchain version of the bookkeeper.


NEO cryptocurrency has two different tokens: NEO and GAS. Both of these coins are capped at 100 million each.


Unlike other coins like Bitcoin, NEO is the representative of shares in the Neo market and cannot be divided. All NEO holders have voting rights in the NEO ecosystem and dividends in the form of GAS. A user can receive GAS tokens if they have NEO in their crypto wallet.


GAS, the alternate token of NEO, is produced with the construction of the blockchain. It has a generation rate of 8 GAS per block. For every 2 million blocks generated, the rate is reduced by 1. GAS has the potential to reach 100 million sometime in the future.

Unlike NEO, GAS can be divided and the dividends will accumulate as fees to the network. GAS is used as payment to establish and run smart contracts. With GAS tokens, you can use the NEO blockchain because it acts as the fuel in the NEO system that influences transactions.

How to invest in NEO

If you’re looking into investing in NEO, here’s a detailed instruction on how you can purchase the cryptocurrency:

Get a wallet

There are plenty of wallets that are available and you have to look for one that supports NEO and GAS tokens. NEO has its wallet that you can directly access from its website. However, you can still choose other types of wallets namely:

  • Hardware wallet – If you want to make sure that your tokens are secured, then a hardware wallet is the choice for you. This is a physical wallet in the form of a USB device that you can connect to your computer to access the tokens. The most popular examples of this wallet are Ledger Nano S, Ledger Nano X, and Trezor.
  • Software wallet – This wallet can be accessed online using any device. This type of wallet is stored inside your desktop or laptop and is connected to the internet. Two of the most popular software wallets are the Electrum and Exodus.
  • Mobile wallet – Mobile wallets are apps that you can install on your phone. With this, you can instantly check your account, as well as make transfers and purchases using a QR code. If you’re interested in this type of wallet, you can check out Coin Bitcoin Wallet or MyCelium.
  • Online wallet – As its name suggests, online wallets can be accessed anytime and anywhere through the use of the internet. This type of wallet asks for your 2FA before you can completely access it. Two of the most popular online wallets are Coinbase and Bisq.
  • Paper wallet – The paper wallet is another popular type of crypto wallet. With it, you can store a set of public and private keys that are printed on a piece of paper with a QR code on it. This is an ideal option if you want to hold onto your funds for a long time.

Locate your address

Once you have a crypto wallet, you need to find your NEO address. The address contains a series of letters and numbers that begins with the letter ‘A’ which stands for AntShares.

Find an exchange site

After obtaining a crypto wallet and your NEO address, you can now purchase or trade NEO and GAS tokens. If you want to buy NEO using another cryptocurrency, you can purchase any crypto coins such as BTC, LTC, or ETH or trade them at an exchange that supports the NEO cryptocurrency.

To get NEO tokens, you will need to go to an exchange site. There is a wide variety of exchange platforms that offer different modes of payment you can choose from. Here are some of the most popular crypto exchanges that you can visit:

  • Binance
  • Coinbase
  • Coinmama
  • Bisq.

After buying NEO tokens, you can now store them in their designated wallets for safe-keeping.

Invest in NEO today!

Now that you know everything there is to know about NEO, it’s time to invest in this cryptocurrency and see how it will benefit you. Visit an exchange site and purchase your NEO tokens today!

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