GAS Review: The Backbone of the NEO Network

GAS Review: The Backbone of the NEO Network

In recent years, cryptocurrencies announced their arrival in the minds of millions and, with that, NEO and GAS entered the hall of fame of famous duos, alongside the likes of Batman and Robin, Jordan and Pippen, and Han Solo and Chewbacca.

And, yes, while NEO is much flashier and constantly overshadows GAS, much like those other legendary pairs, they couldn’t thrive without each other. Because, in order to deploy and run NEO’s smart contracts, its calling card function, users must pay fees in the form of GAS. To be more specific, the fees are rewards for “bookkeepers” who validate the smart contracts on the blockchain, allowing for credible digital transactions without the need of a third party.

The Chinese Ethereum: NEO and its Rise

NEOIf you want a deeper understanding of GAS and how it functions as a cryptocurrency, it’s first important to learn more about it’s bigger and more impressive partner, NEO.

Launched in 2014 as Antshares, NEO was China’s first blockchain platform. The founders Da Hongfei and Erik Zhang, seeing a growing interest and need for blockchain in their home country, started OnChain, a company that specializes in blockchain-based financial services. And subsequently, they rebranded Antshares to NEO in 2017.

Essentially, NEO is the Chinese Ethereum and is, first and foremost, a smart contracts ecosystem, meaning it facilitates the storage and exchange of digital assets using a distributed ledger enabled by blockchain technology. With NEO, every time something is exchanged, from information and currencies to storage, a network of thousands of computers process the transaction through consensus building.

One of the main aspects of NEO is digital identification. Due to strict Chinese regulations, it is tough to create a system that satisfies the government’s stringent standards for online identification systems. This is where NEO comes in. In 2016, OnChain partnered with Microsoft to create Legal Chain, which plans to use the unchangeable and transparency of the blockchain to provide digital identification services, including voice and facial recognition. NEO is regularly touted as a trusted system to legally verify digital identities.

NEO’s main mechanism is the consensus building provided by Delegated Byzantine Fault Tolerance (dBFT). In layman’s terms, this means that participants on the NEO network can delegate certain nodes as bookkeepers. In return, these bookkeepers must verify blocks written on the blockchain. If two-thirds can verify the transaction, then that version of the blockchain becomes validated.

On top of that platform, NEO claims to be able to more than 1,000 transactions per second. The team has set a goal of 10,000 transactions per second but that remains to be seen in practice. As a comparison, Ethereum can currently only render around 20 transactions per second and Bitcoin is somewhere around 7 transactions per second.

Gas — What Exactly is it?

NeoToGas

In reality, NEO is two coins working in unison. NEO being the main coin while GAS functions as its friendly sidekick. Put simply, GAS powers the entire NEO platform.

On top of being the fuel for the system to function, holders of NEO generate a reward of 0.00000008 GAS per NEO per processed block on the blockchain.

If that sounds confusing, you’re not alone, but there are many tools to calculate how much GAS a certain amount of NEO will produce. If you are a cryptocurrency trader, you can think of GAS as the dividend for storing NEO, much like holding a stock.

To understand how GAS maintains the NEO platform, it’s important to revisit NEO’s smart contract system. Like we mentioned above, in order for a smart contract to be fulfilled, it must first be verified by bookkeepers. This means that companies using the NEO network must spend GAS to run their blockchain apps. Or more accurately, GAS is used to cover the fees of smart contract consensus building.

After the smart contracts are resolved, the GAS is then funneled back to NEO holders, in addition to the newly created GAS. So the more people who are using the NEO platform, the more GAS that will be generated. And, in turn, holding NEO will see higher and higher GAS dividends.

The Gas Token

As we speak, the GAS ranks 60 with a market cap of $204, 922,074. The volume is $5,498,790, circulating supply is 9,914,081 GAS and the total supply is 16,185,395.

In 2017, GAS clung to NEO’s coattails as it ascended to its current status as one of the hottest and most sought-after cryptocurrencies, ranking at 7 with a $4,335,240,000 market cap and a price hovering around $66 per token. During that time, GAS moved from under $2.00 per token in June 2017 to its ATH of $85 in January 2018. It currently sits at $20 per token after the late January and February cryptocurrency bear market.

In 22 years, it is planned that GAS and NEO will have a 1:1 token ratio. Which could mean that those using the NEO network would have to buy GAS to run apps and resolve smart contracts, potentially meaning a higher GAS demand and price. This has led many crypto traders to speculate that GAS will be more valuable of an investment than NEO in the long term.

The NEO and GAS Team

NEO has one of the largest development teams in the crypto space, headlined by its two founders mentioned above Hongfei and Zhang. The team members stay active on social media and the token has a strong community following.

One downside is that the team’s page on the NEO website does not provide much detailed information on the each member’s experience, skills or background.

NEO and GAS — The Partnerships

From all indications, the team behind NEO has positioned itself as the leading force of blockchain technologies in China. And what’s more, the Shanghai-based company has made it a key priority to work hand-in-hand with China’s top companies and, even more importantly, the Chinese government, which is a huge plus considering the lingering uncertainty about the future of cryptos in mainland China.

In addition to its partnership with Microsoft China mentioned above, NEO and OnChain have secured strategic partnerships with other giants including the Japanese Ministry of Economy, Trade and Finance; Alibaba; China’s largest private conglomerate, the Fosun Group; and Chinese regional governments.

Where to Buy and Store GAS?

NEON Wallet

GAS can be bought and sold using Bitcoin and Ethereum on many exchanges, most notably on Binance. Kucoin, however, is the only exchange that supports a NEO/GAS trading pair.

After buying GAS, you should store it and your NEO in a secure wallet. At the moment, the most popular place to store NEO and GAS is the NEON Wallet.

Final Thoughts

It’s clear that NEO and GAS are two of the most well-positioned and established tokens in the cryptosphere. From their impressive partnerships, large team and solid framework, it’s definitely a project to keep an eye on.

When it comes to GAS specifically, there are a lot of things to love. First being that you accumulate it simply by holding NEO. But what’s even better, is its potential for growth in the coming years as it and NEO approaches a 1:1 ratio. If you believe some cryptonauts, GAS is a far smarter and more lucrative longterm investment than NEO. But, as always, DYOR.

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