Bitcoin is the pioneer cryptocurrency and is the most popular coin. However, many other cryptocurrencies have rose to prominence. Two of these are Ethereum and NEO with the former being second only to Bitcoin by market capitalization.
Ethereum and NEO rely on blockchain technology to offer unique crypto-assets, Ether and GAS respectively. Besides, both platform are turing complete, can host smart contracts, DApps and ICOs. Furthermore, they are open source, active communities and great, responsive core teams.
However, there exist some differences between the two.
NEO is a blockchain project currently among the top ten by market capitalization. It operates by utilizing blockchain as well as digital identity. The result is an efficient tool to manage assets, create a smart economy and digitizing of assets. Moreover, NEO has a unique algorithm known as distributed Byzantine Fault Tolerance (dBFT). This is crucial because it saves on energy and correspondingly makes transactions faster.
It is vital to note that NEO has the backing of the Chinese government. Beijing is historically been hostile to decentralized currency. However, it has softened its stance in recent times and is implementing blockchain systems. It has partnerships with some established firms such as Coin dash and Alibaba.
Ethereum facilitates smart contract applications which function without any possibility of downtime, external interference or fraud by third parties. To go into detail, applications on this platform run on a specially designed blockchain. This is a public powerful ledger that moves around and represents the ownership of property. Smart contracts tasks run on Ethereum executed by respective parties and constitute the means by which services and currency are transacted on this platform.
In contrast to Bitcoin, Ethereum is designed to make it adaptable and easy to tailor to specific needs. The name for this platform’s currency is ether though tokens generated can also be means of exchange in their own right. The transactions conducted are recorded on the public ledger which gets updated automatically.
Some of the applications that can be run on this platform include: Crowdfunding platforms like DAO, platforms used for predicting markets such as Augur, tokens pegged to precious metals such as Digix and online gambling platforms among others.
Despite the fact that NEO is the most similar alternative to Ethereum compared to other altcoins, there exist some differences;
NEO uses the delegated Byzantine Fault Tolerant (aka dBFT) which is looks more like an upgrade of Proof-of-stake (PoS). On the other hand, Ethereum uses the more power intensive, Proof-of-work. Note this though; Ethereum is actually considering adopting Casper, which uses the Proof-of-Stake algorithm.
This is the second contrast. The fact that NEO has a government backing gives it a head start in the massive Chinese market. Besides, state and national banks as well as companies like Alibaba.
Ethereum does not enjoy such government backing and only has Enterprise Ethereum Alliance to popularize it worldwide. Furthermore, translation is mandatory for NEO since most papers on NEO are usually in Chinese. For Ethereum it is not necessary as documentation is in English.
3. Functional and Technical differences
The nature of NEO means that it cannot undergo a hard fork. Meanwhile, Ethereum has already split into a subsidiary called Ethereum Classic. This makes NEO functionally superior.
4. Programming Language
NEO offers versatility in this aspect since the smart contracts and DApps of NEO can be written in several programming languages including Java. This is not the case for Ethereum which uses a relatively complex language called Solidity.
The two differ since Ethereum uses crypto-fuel, Ether, which is divisible while NEO exists in whole numbers and is indivisible.
6. Processing speed
This is yet another department where NEO trumps Ethereum. The NEO platform can process about 10,000 TXs while Ethereum can muster a meager 15 TXs. Accordingly, Ethereum is currently implementing a long-term plan of scalability to resolve this issue.
NEO is the only blockchain platform that can guarantee protection from quantum computer threats. This is significant because Quantum computers have the uncanny ability to go around blockchain systems.
The NEO platform functions by digitizing traditional real-world assets. NEO plans to create an ultimate smart economy through use of digital identity, smart contracts and DApps.
Ethereum on the other hand hosts numerous cases of digital identity including blockchain exchanges, remittances and Know your Customers. Basically, Ethereum’s objective is to become the world’s supercomputer.
So, which is the preferable alternative: NEO or Ethereum?
It is quite difficult to choose over the other for a myriad of reasons. Investing in the two platforms is a very viable undertaking as they are both open source, Turing complete and have massive community support. NEO have made it no secret that they intend to be in constant and direct competitors with Ethereum.
However, the focus of both platforms at the moment needs to be on adding lacking features, in particular mainstream adoption. Technologically, Ethereum is still well positioned in the crypto market.
The volatility of the cryptocurrency makes prediction of the future for any coin a tricky affair. Regardless, it can be a safe bet to postulate that these two will be around for a long time. This is because they are relatively new in crypto-sphere and offer a unique range of services efficiently.
The promises of each platform have to be actualized. There has to be not only claims of real world value but also evidence of the same in practice. That and only then can we definitely say that one is better than the other.
However as binary choice, Ethereum is currently more entrenched in the market and enjoys a bigger global presence. NEO may have some functional advantages but it has a long way to catch up to Ethereum.