NEO (cryptocurrency)

NEO is a blockchain platform and cryptocurrency designed to build a scalable network of decentralized applications. The base asset of the NEO blockchain is the non divisible NEO token which generates GAS tokens that can be used to pay for transaction fees generated by applications on the network.[4] NEO supports a wide variety of commonly used programming languages such as Javascript and C++ by using a customized version of Docker called neoVM that compiles the code into a secure executable environment.[5]

Contents

  • 1 History
  • 2 Architecture
    • 2.1 Distribution
    • 2.2 Consensus
    • 2.3 Compiler
  • 3 Features
  • 4 References
  • 5 External links

History[edit]

The NEO project was originally launched in 2014 as AntShares with development resources provided by founder Da Hongfei through his development company Onchain.[6][7] NEO rebranded from Antshares to NEO in June of 2017. [8][9] In March 2018, parent company Onchain distributed 1 ontology (ONT) token for every 5 NEO held in a user’s wallet which will be used to vote on system upgrades, identity verification, and other governance issues on the NEO platform.[10]

Architecture[edit]

Distribution[edit]

A total of 100 million NEO were created in the Genesis Block. 50 million NEO were sold to early investors, with the remaining 50 million NEO locked into a smart contract. Each year, 15 million NEO tokens are unlocked which can be used by the NEO development team to fund long term development goals. NEO tokens generate a slowly deflationary amount of GAS tokens which are used to pay for transactions on the network. The inflation rate of GAS is controlled with a decaying half life algorithm that will release 100 million GAS over approximately 22 years.[11][2]

Consensus[edit]

NEO uses a delegated Byzantine Fault Tolerance (dBFT) consensus mechanism and can support up to 10,000 transactions per second.[12][13] [14] To achieve consensus, book keeping nodes are randomly selected to validate transactions on the network based overlapping networks of trust in a manner most similar to Hyperledger Fabric and Stellar which employ subtlety different implementations to solve for the Byzantine General’s problem. Systems employing dBFT for consensus cannot hard fork into two separate chains as the mechanism relies on 2/3 majority rule to operate.[15]

Compiler[edit]

NEO smart contracts support many common programming languages via the neoVM compiler, including those on Microsoft.net, Java, Kotlin, Go and Python. [16] Isolation of smart contract code inside of the neoVM is crucial for network security and scalability. neoVM features a lighter weight implementation of Docker which reduces requirements on system resources by avoiding the need to replicate an entire virtual environment.[5]

Features[edit]

The core of the NEO feature set revolves around tools that allow developers to efficiently deploy and scale smart contract applications on the NEO blockchain.

  • NEP5 Communications Standard – the NEP5 gives developers a standardized workflow and template to build decentralized applications. All tokens using the NEP5 standard are automatically able to transact with any other token using the NEP5 standard which allows for applications such as decentralized exchanges and other more advanced cross token communication.[17]
  • X.509 Digital Identities allow developers to tie tokens to real world identities which aids in complying with KYC/AML and other regulatory requirements[11]
  • NeoX – A cross chain protocol that will allow NEO tokens to communicate with tokens on other blockchains.
  • NeoFS – A decentralized file sharing service based on the InterPlanetary File System.
  • NeoQ – A lattice-based cryptographic mechanism which creates problems that cannot be solved by quantum computers and ensuring being quantum-proof [18]

References[edit]

  • ^ “Who is NEO’s Da Hong Fei? A Career Spotlight”. CoinCentral. 
  • ^ a b Garner, Bennett (23 January 2018). “What is GAS? An Introduction to the NeoGas Crypto and What It Does Within NEO”. Coincentral. Retrieved 24 March 2018. 
  • ^ “NEO (NEO) price, charts, market cap, and other metrics – CoinMarketCap”. coinmarketcap.com. 
  • ^ “Titan Digital Asset Group Research, NEO: The Vanguard of a Digitized China”. Strategic Coin. Retrieved 27 December 2017. 
  • ^ a b “Reconstructing Smart Contracts Part I”. The Merkle. Retrieved 23 March 2018. 
  • ^ “China’s Largest Cryptocurrency Thrives Despite Intense Crackdown”. Bloomberg Technology. Retrieved 13 January 2018. 
  • ^ “Why You Should Keep Qtum on Your Radar in 2018”. CryptoSlate. Retrieved 27 December 2017. 
  • ^ “NEO versus Ethereum: Why NEO might be 2018’s strongest cryptocurrency”. Hacker Noon. 2017-12-06. Retrieved 2018-02-24. 
  • ^ Kuznetsov, Nikolai (10 August 2017). “NEO Co-Founder Banks On Blockchain To Build A Smart Economy”. Forbes. Retrieved 23 March 2018. 
  • ^ Chang, Evelyn (12 March 2018). “‘Airdrops’ are coming”. CNBC. Retrieved 23 March 2018. 
  • ^ a b Soeteman, Krijn (10 February 2018). “Operation of dBft mapped via Neo”. Computable. Retrieved 23 March 2018. 
  • ^ “The new age of ICOs is here, and it’s not based on Ethereum”. TechCrunch. Retrieved 13 January 2018. 
  • ^ “Bitcoin and Cryptocurrency: What You Need to Know”. Rolling Stone. Retrieved 27 December 2017. 
  • ^ “NEO Cryptocurrency – Beginner’s Guide”. 
  • ^ “Blockchain project Antshares explains reasons for choosing dBFT over PoW and PoS”. Econotimes. 25 April 2017. Retrieved 23 March 2018. 
  • ^ Fink, Bradley. “Antshares Rebrands, Introduces NEO and the New Smart Economy”. Bitcoin Magazine. Retrieved 2018-02-16. 
  • ^ Herrarra, Stephanie (22 February 2018). “NEP5 Tokens coming to Binance”. USA Commerce. Retrieved 23 March 2018. 
  • ^ “What is NEO Cryptocurrency?”. CoinCentral. 2017-11-02. Retrieved 2018-02-14. 
  • External links[edit]

    • NEO official website
    • Neo Documentation

    Proof-of-stake

    • BitShares
    • Ada
    • EOS.IO
    • Gridcoin
    • Nxt
    • Waves

    Other

    • Counterparty
    • Filecoin
    • NEM
    • NEO
    • Ripple
    • Stellar
    • Steem
    • Tether
    • VeChain
    • Waves

    Related topics

    • Anonymous Internet banking
    • Bitcoin network
    • Complementary currency
    • Crypto-anarchism
    • Cryptocurrency exchange
    • Digital currency
    • Double-spending
    • Electronic money
    • Initial coin offering
    • Airdrop
    • Virtual currency
    • Category
    • Commons
    • List


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    Cryptocurrency wallet

    An example paper printable bitcoin wallet consisting of one bitcoin address for receiving and the corresponding private key for spending.

    A cryptocurrency wallet stores the public and private keys which can be used to receive or spend the cryptocurrency. A wallet can contain multiple public and private key pairs.[1][better source needed] As of January 2018[update], there are over thirteen hundred cryptocurrencies; the first and best known is bitcoin.[2] The cryptocurrency itself is not in the wallet. In case of bitcoin and cryptocurrencies derived from it, the cryptocurrency is decentrally stored and maintained in a publicly available ledger.[3]:93 Every piece of cryptocurrency has a private key. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency.[4]

    Contents

    • 1 Wallet access
    • 2 Backup
    • 3 Wallet characteristics
      • 3.1 Multicurrency
      • 3.2 Software wallet
      • 3.3 Hardware wallet
      • 3.4 Watch-only wallet
      • 3.5 Multisignature wallet
      • 3.6 Brain wallet
      • 3.7 Hot vs. cold wallets
      • 3.8 Deep Cold Storage
      • 3.9 Key derivation
        • 3.9.1 Deterministic wallet
        • 3.9.2 Non-deterministic wallet
    • 4 See also
    • 5 References

    Wallet access[edit]

    When choosing a wallet, the owner must keep in mind who is supposed to have access to (a copy of) the private keys and thus has potentially access to the cryptocurrency. Just like with a bank, the user needs to trust the provider to keep the cryptocurrency safe. Trust was misplaced in the case of the Mt. Gox exchange, who ‘lost’ most of their clients’ bitcoins. Downloading a cryptocurrency wallet from a wallet provider to a computer or phone does not automatically mean that the owner is the only one who has a copy of the private keys. For example with Coinbase, it is possible to install a wallet on a phone and to also have access to the same wallet through their website. A wallet can also have known or unknown vulnerabilities.[5] For receiving cryptocurrency, access to the receiving wallet is not needed. The sending party only needs to know the destination address. Anyone can send cryptocurrency to an address. Only the one who has the private key of the corresponding address can use it.[6]

    Backup[edit]

    A backup of a wallet can come in different forms like:

    • A (encrypted) file like wallet.dat or wallet.bin which contains all the private keys.
    • A mnemonic sentence from which the root key can be generated, from which all the private keys can be recreated. Preferably these words could be remembered or written down and stored on other physical locations.
    • A private key like: KxSRZnttMtVhe17SX5FhPqWpKAEgMT9T3R6Eferj3sx5frM6obqA (see the picture).

    When the private keys and the backup are lost then that cryptocurrency is lost forever. When using a webwallet, the private keys are managed by the provider. When owning cryptocurrency, those trusted with managing the private keys should be carefully selected. An (encrypted) copy of the wallet should be kept in a trusted place. Preferably off-line.[6] Some people ‘write’ their mnemonic sentence or private key on metal, because it is robust.[7]

    Wallet characteristics[edit]

    Multicurrency[edit]

    Some wallets support multiple cryptocurrencies.

    Software wallet[edit]

    They come in different forms like:

    • An application installed locally on a computer, telephone or tablet (see the picture).
    • When using a web wallet the private keys are managed by a trusted third party. Some web-based wallet providers use two-factor (like Google Authenticator) for extra security. In that case a keylogger is not enough for a hacker to steal the credentials and get access to the wallet.[8][not in citation given]
    • Cryptocurrency exchanges link the user’s wallet to their centrally managed wallet(s). For example: When trading bitcoins between users on the Kraken exchange, the trades are written in their private ledger (off-chain transaction). Only when a user wants to enter his cryptocurrency into the exchange or when he wants to take his cryptocurrency out of the exchange, the transaction is written onto the public bitcoin blockchain (on-chain transaction).

    In order to initiate or verify a transaction, the cryptocurrency wallet connects to a client or node on the network to process the request. There are several types of clients like: full clients, headers-only clients, thin clients and mining clients. Some of them can process transactions and some of them also have their own wallet functionality.[9] Full clients verify transactions directly on a local copy of the blockchain.[9] Lightweight clients consult full clients.[10]

    Hardware wallet[edit]

    An actual bitcoin transaction from a web based cryptocurrency exchange to a hardware wallet.

    When the user of a hardware wallet requests a payment, the wallet’s API creates the transaction. Then the wallet’s hardware signs the transaction and provides a public key, which is sent to the network by the API. That way, the signing keys never leave the hardware wallet.[11]

    If a hardware wallet uses a mnemonic sentence for backup, then the users should not electronically store the mnemonic sentence, but write it down and store in a separate physical location. Storing the backup electronically lowers the security level to a software wallet level. Hardware wallets like LedgerWallet and Trezor have models that require the user to physically press or touch the wallet in order to sign a transaction, the destination address and the amount of coins. The private keys remain safe inside the hardware wallet. Without the private key a signed transaction cannot be altered successfully. Some hardware wallets have a display (see the picture) where the user can enter a pin to open the wallet and where the transaction can be verified before being signed. When reading a mnemonic sentence from the physical display of the hardware wallet a screencapture of an infected computer will not reveal the mnemonic sentence.[12][not in citation given][13][14][not in citation given]

    Watch-only wallet[edit]

    With a watch only wallet someone can keep track of all transactions. Only the address (public key) is needed. Thus the private key can be kept safe in another location.[9]

    Multisignature wallet[edit]

    With a multisignature (multisig) wallet multiple users have to sign (with their private key) for a transaction out of that wallet (public key address).[15][16][17]

    Brain wallet[edit]

    With a brain wallet someone remembers the information to regenerate the private and public key pair(s), like a mnemonic sentence.[18][19]

    Hot vs. cold wallets[edit]

    Terms also used in the context of cryptocurrency wallets are hot and cold wallets. Hot wallets are connected to the internet while cold wallets are not. With a hot wallet cryptocurrency can be spent at any time. A cold wallet has to be ‘connected’ to the internet first. As long as something is connected to the internet, it is vulnerable to an attack. The short version is that software wallets (where the device is turned on or the wallet software is running) are considered hot wallets. A (not connected) hardware wallet is considered a cold wallet.[20]

    Deep Cold Storage[edit]

    Deep cold storage is the process of storing cryptocurrencies in cold wallets that were never connected to the Internet or any kind of network. Additionally the private keys associated with this system are generated offline.  The process gained main stream attention, when Regal RA DMCC[21], (the first cryptocurrency licensed company in the middle east) took it a couple of steps further by storing the cold wallets in the Almas Tower vault below sea level along with the company’s gold bullion and insured the cryptocurrencies for full value.

    Key derivation[edit]

    Deterministic wallet[edit]

    With a deterministic wallet a single key can be used to generate an entire tree of key pairs. This single key serves as the “root” of the tree. The generated mnemonic sentence or word seed is simply a more human-readable way of expressing the key used as the root, as it can be algorithmically converted into the root private key. Those words, in that order, will always generate the exact same root key. A word phrase could consist of 24 words like: begin friend black earth beauty praise pride refuse horror believe relief gospel end destroy champion build better awesome. That single root key is not replacing all other private keys, but rather is being used to generate them. All the addresses still have different private keys, but they can all be restored by that single root key. The private keys to every address it has ever given out can be recalculated given the root key. That root key, in turn, can be recalculated by feeding in the word seed. The mnemonic sentence is the backup of the wallet. If a wallet supports the same (mnemonic sentence) technique, then the backup can also be restored on a third party software or hardware wallet.

    A mnemonic sentence is considered secure. It creates a 512-bit seed from any given mnemonic. The set of possible wallets is 2512. Every passphrase leads to a valid wallet. If the wallet was not previously used it will be empty.[3]:104

    Non-deterministic wallet[edit]

    In a non-deterministic wallet, each key is randomly generated on its own accord, and they are not seeded from a common key. Therefore, any backups of the wallet must store each and every single private key used as an address, as well as a buffer of 100 or so future keys that may have already been given out as addresses but not received payments yet.[3]:94

    See also[edit]

    • Bitcoin#Wallets
    • Ether (currency)#Wallets
    • Cryptocurrency and security

    References[edit]

  • ^ Private and public keys in wallet on books.google.com ISBN 1387139967
  • ^ McGoogan, Sara; Field, Matthew. “What is cryptocurrency, how does it work and what are the uses?”. The Telegraph. Retrieved 14 September 2017. 
  • ^ a b c Antonopoulos, Andreas (12 July 2017). Mastering Bitcoin: Programming the Open Blockchain. O’Reilly Media, Inc. ISBN 9781491954386. Retrieved 14 September 2017. 
  • ^ Juchisth, Smith. “Wat is cryptocurrency? Een introductie in de blockchain”. Cryptostart (in Dutch). Retrieved 9 December 2017. 
  • ^ “Wallet vulnerabilities”. cnn.com. 
  • ^ a b “How to store your bitcoins – bitcoin wallets – CoinDesk”. 
  • ^ “Cryo Card Review: Nearly Indestructible Bitcoin Cold Storage – CoinAlert”. coinalert.eu. 
  • ^ “How Bitcoin Companies Keep Your Funds Safe”. CoinDesk. 25 November 2014. 
  • ^ a b c Skudnov, Rostislav. “Bitcoin Clients” (PDF). theseus.org. Retrieved 23 February 2018. 
  • ^ “Lightweight clients on iacr.org” (PDF). 
  • ^ Gkaniatsou, Andriana; Arapinis, Myrto; Kiayias, Aggelos (2017). “Low-Level Attacks in Bitcoin Wallets”. Information Security: 20th International Conference, ISC 2017, Ho Chi Minh City, Vietnam, November 22-24, 2017, Proceedings. Springer. p. 234. ISBN 9783319696591. Retrieved 9 February 2018. 
  • ^ Burton, Charlie. “So, you’ve bought Bitcoin. Now what?”. 
  • ^ “The 3 Best Hardware Wallets For Bitcoin of 2018 ( ++ Altcoins)”. 15 November 2017. 
  • ^ Torpey, Kyle. “Bitcoin Hardware Wallet Review: Ledger May Have Caught Up to Trezor With Nano S”. www.nasdaq.com. Nasdaq. Retrieved 5 December 2017. 
  • ^ “The best multisignature wallets for 2016 » Brave New Coin”. 13 January 2016. 
  • ^ “Zendesk”. support.ledgerwallet.com. 
  • ^ “Bitcoin, Litecoin, & Ethereum Vault”. 
  • ^ “How to create a brain wallet – CoinDesk”. 10 June 2013. 
  • ^ Matonis, Jon. “Brainwallet: The Ultimate in Mobile Money”. 
  • ^ “Bitcoin Glossary”. 
  • ^ “World’s First Deep Cold Storage for Crypto-Commodities Launched by Regal Assets in Dubai | News – DMCC”. DMCC. Retrieved 2018-04-02. 

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