NEO is a platform with purpose; but can it compete with Ethereum? Functionality is the essential quality every developer will look at. However, the platform that does better than its counterparts will win the heart of developers. While Ethereum was here first, both virtual currencies are after the same goal. Both want to be the platform for the new internet (ICOs, Dapps- Smart contracts and Decentralized Applications).
Overview of Ethereum and NEO
While both platforms are toolboxes for developers, each differs in several aspects. Ethereum’s goal is to be the platform that allows the development of Dapps, thus creating a “free, and more globally accessible trustworthy internet. NEO uses digital identity and blockchain tech to digitize assets, and uses smart contracts for automated digital asset management, to realize a smart economy using a distributed network.
Neo processes transactions faster than Ethereum because its protocol is more streamlined than that of the latter. NEO can transact at 1,000tps achieving a maximum speed of 10,000tps. Ethereum, on the other hand, transacts at 15tps with a 30tps maximum.
Ethereum uses the Proof of Work (PoW) protocol. NEO, on the other hand, uses the Delegated Byzantine Fault Tolerance (Dbft). This protocol functions to make everyone honest and work together. Note that there’s also a modified version of this standard proof protocol (Dbft).
Forking And Scaling
Ethereum forks to upgrade its software. Forks happen because of a lack of finality in the consensus mechanism of Ethereum. NEO, on the other hand, has finality and cannot fork.
Execution of Smart Contract
Smart contracts use virtual machines. These are machines that run on the computers of miners to execute the contracts. Essentially, NEO has a faster and more efficient way of executing smart contracts than its counterpart.
Ultimately, NEO is basically different from Ethereum, but both come with a unique purpose which is to achieve a smart economy.