When it comes to the world of cryptocurrencies, the most popularly known name is that of Bitcoins. However, while Bitcoin was the first ever cryptocurrency, there are many others which came out over the years and have shown impressive growth of late. Two such names are that of Ethereum and Neo. Comparisons between these two are often found as both these cryptocurrencies have a loyal following. Let us take a look at this long rivalry between Neo vs Ethereum and understand the differences between the two.
Neo vs Ethereum: A Broad Overview
Neo (NEO) and Ethereum (ETH) are two cryptocurrencies which are growing rapidly. Both of them offer a blockchain based system with various tools for developers. However, both these platforms have different use cases. Before we nosedive into Neo vs Ethereum comparisons and analysis - let us take a closer look at what these two technologies are all about:
A Closer Look at Ethereum:
Let us first take a closer look at Ethereum. One of the most interesting technologies on the planet right now, Ethereum has been getting many backers. In fact, in terms of cryptocurrency valuation, it is second only to Bitcoins in terms of market cap! Ethereum is the most popular platform in the world to create smart contracts upon.
For those who may not be aware about what a ‘Smart Contract’ is, simply put, it is just a code which can easily support complex tasks such as exchange of money, property or other similar assets. If there’s an item of any value which needs to be exchanged, smart contracts offer a good, blockchain-based platform of exchange.
Another use of Ethereum comes when it comes to building Decentralized Autonomous Organizations (DAOs). These are basically organizations which run without a single leadership structure. They run on codes which consist of various smart contracts made on the Ethereum network.
A Closer Look at Neo:
Let us take a look at Neo before we head into the Neo vs Ethereum discussions. Neo has often been referred to as ‘Ethereum of China’. This is because of the fact that similar to Ethereum, Neo too - is all about the decentralized applications. However, while Neo allows users to run and execute decentralized apps, it does not have a specific language requirement as these apps can be created in C#, Java or Go.
While not undermining the technology that Neo has to offer, one of the biggest reasons for the growth of Neo is the fact that it is backed by the government of China. China, which is usually a hostile nation towards cryptocurrencies, has been quickly implementing the blockchain systems. Many major firms such as Alibaba, Coindash as well as international names such as Microsoft are in a partnership with Neo.
Cryptocurrencies function on consensus algorithms. While most popular algorithms are proof-of-stake or proof-of-work, Neo has it’s own algorithm called distributed Byzantine Fault Tolerance (dBFT). This algorithm is better and more energy efficient when compared to the aforementioned proof of stake and proof of work algorithms. The average block time on Neo too, is way lesser than the Bitcoin as well as the Ethereum block times.
Neo vs Ethereum: Understanding the Difference
Neo and Ethereum might appear similar when it comes to certain aspects. However, there’s a major difference between these two blockchain based technologies.
The first and foremost difference is that of the algorithms that the two blockchains use. When it comes to Neo vs Ethereum, it is fundamentally the dBFT algorithm of Neo vs the proof-of-work mechanism of Ethereum. Ethereum however, is on the way of adapting a proof-of-stake algorithm which will make it faster and more energy efficient, though not as much as the dBFT algorithm of Neo.
Neo is considerably faster compared to Ethereum. While the Ethereum network can handle up to 15 transactions per second, the Neo system can handle as many as 10,000 transactions per second. However, Ethereum’s long-term plan of scalability is likely to solve this issue which is their biggest disadvantage as of now. In the Neo vs Ethereum war, this is where Neo has the biggest edge.
Security wise - Neo is more secure than any other cryptocurrency as it boasts of being the only blockchain platform which is secure from the threats of quantum computers. While it hasn’t practically happened, but it is assumed that theoretically, quantum computers have the processing power to manipulate even blockchain systems. Neo is the only cryptocurrency secure from this hypothetical threat.
One major disadvantage that Neo has is the fact that most of the papers and material on Neo has been written in Chinese and the translations for the foreign investors aren’t really as great. Another major disadvantage for Neo in the Neo vs Ethereum battle is of the fact that unlike most cryptocurrencies, the Neo blockchain doesn’t allow its cryptocurrency to be divisible. You can own 1 NEO, 2 NEO, 3 NEO etc, but you cannot own 1.25 NEO or 2.5 NEO.
Another major difference that has been highlighted above is the fact that the Neo blockchain supports decentralized apps written in C#, Java, etc. However, Ethereum only supports apps written in its native language, Solidity which is a major disadvantage for coders not comfortable with it.
Conclusion: Who wins the Neo vs Ethereum Battle
It is, for all practical purposes, impossible to determine who wins the Neo vs Ethereum battle. Two incredible cryptocurrencies which have some overlapping functions. However, while Neo does appear to have a significant edge in terms of technology, it is largely limited to China. In recent years we have seen many ICOs based on the Neo blockchain and that is perhaps the sign of things to come.
Only time can tell who wins the Neo vs Ethereum battle, but going by the way Ethereum is improving - it looks like the fight is going to be intense between the two technologies over the next few years.