NEO is a major cryptocurrency project that is notable for being one of several tokens that has undergone a rebranding. Originally known as Antshares, NEO was renamed in June 2017, with the intention of reflecting its new qualities.
The vision of the developers of NEO is to realise a smart economy by using blockchain technology and smart contracts to issue and manage digitised assets. The NEO blockchain is based on a Proof of Stake decentralised Byzantine fault tolerant consensus mechanism, which can handle as many as 10,000 transactions per second.
In March 2018, NEO's parent company Onchain distributed tokens for every 5 NEO held in a user's cryptocurrency wallet. These tokens will be used to vote on system upgrades, identity verification mechanisms, and other governance issues on the NEO platform. This article will discuss how to invest in NEO.
There are a variety of different ways to invest in NEO, but in this section of the article, we will examine four of the most popular.
Purchasing NEO through a cryptocurrency exchange is undoubtedly the most common way to buy NEO. There are a wide range of digital exchanges available, and a major token such as NEO is purchasable on all of them.
If a wallet is connected to the internet, it is defined as a hot wallet. The term 'hot' signifies the fact that it is always ready to be accessed because of its online connectivity. They are less secure as compared to cold wallets but are more user-friendly. Since they have online connectivity, hot wallets are more prone to cyberattack and security breaches.
Cold wallets are better suited for those traders and investors who want to store their digital assets for months or even years. These investors are often called "HODLers" as they are looking to hold their digital currency for a long period to ensure major gains. They don't have the urgent need to access their coins and they just want their cryptocurrency funds to be secure.
Although exchanges tend to have storage provisions built into them, it is always advisable to purchase a hardware wallet to store your NEO tokens. Some of the hardware wallets compatible with NEO include the following:
Users must carry out a comprehensive and thorough review of some of the most popular crypto wallets before finalising. A number of factors including user-friendliness, convenience, price and security should be evaluated before selecting a NEO wallet.
In order to benefit from the services of cryptocurrency exchanges, it will first be necessary to join a platform of your choosing. This requires registration, and there are certain requirements inherent in this process.
It is usual for exchanges to require government identity documentation and proof of address to proceed. Most exchanges are also compliant with Know Your Customer (KYC), which refers to the process of verifying the identity of your customers, either before or during the time that they start doing business with you.
One possibility with cryptocurrency is to purchase fractions of a particular token through an exchange. This is possible with NEO, due to the relatively high price of a single token. Exchanges will allow cryptocurrency investors to purchase 0.01 NEO tokens in a single purchase.
Another approach to trading cryptocurrency is to get in contact with a dedicated broker. This is a significantly different process to cryptocurrency purchases through an exchange, as a broker represents an intermediary between the investor and the market.
Cryptocurrency brokers are experts in the field, who will both conduct market activity on behalf of investors, and also offer a range of other services. It is important to confirm that a cryptocurrency broker is regulated and experienced in the market before trading NEO. Additionally, your broker should have state-of-the-art security systems in place, while always operating in compliance with international regulations.
Another option for cryptocurrency investors interested in NEO is to invest in an ETF (Exchange Traded Fund) contract. These can be used to trade a particular cryptocurrency through the traditional stock market, and are also useful given their ability to combine a diverse set of currencies into a single tradable asset.
A cryptocurrency ETF works much in the fashion of a traditional contract, tracking an index or basket of assets, and moving dependent on market activity. Considering the fast-moving pace of the cryptocurrency market, many investors consider ETFs to be an ideal way to trade.
It’s important to consider several aspects of the contemporary market before investing in NEO, or any cryptocurrency. While there are huge opportunities for those choosing to invest in cryptocurrencies, it is also true that the niche is quite challenging and technical. So, it is therefore important to be aware of the issues that we will discuss in the section.
The NEO network uses a fee structure with two types of fees; system fees and network fees. All fees are paid in the native utility token GAS (NeoGas). The NEO network currently allows only 20 low priority transactions per block, so paying a higher network fee during a high-traffic period can result in a faster transaction. Exchanges will also typically levy a fee of around 0.1% for NEO transactions.
Although cryptocurrency offers massive opportunities, there are also risks associated with the medium. In particular, the cryptocurrency market is known to be somewhat volatile, and this can result in big losses as well as large gains.
Cryptocurrencies also remain relatively unregulated, although both governments and central banks have made moves to alter this in recent years. Nonetheless, the traditional financial architecture remains more regulated than the crypto space.
Another issue with cryptocurrencies is that they are susceptible to error and hacking. It is impossible to prevent technical glitches in the crypto niche, and there will always be risks of criminal enterprises attempting to steal tokens. However, it should be noted that investments in any field are always potentially subject to theft.
Cryptocurrency can also be discontinued or significantly altered by hard forks, and this can have a massive impact on the underlying market. CFD contracts which are often used for cryptocurrency investments are also considered to be high-risk and speculative products.
Overall, it is important to ensure that you have familiarised yourself with all of the risks, and tread carefully once you have done so.
There are a variety of payment methods available for NEO, with virtually every major fiat currency being supported, along with some solutions as PayPal, Skrill, and Neteller. It is also possible to exchange the market-leading Bitcoin and other altcoins for NEO as well.
The smart economy supported by NEO is a major selling point. This makes it possible to digitise physical assets on the blockchain. Once digitised, they can stay on the blockchain and enjoy benefits, such as being decentralised, transparent, permisionless, and traceable.
NEO has also used smart contracts, and these have proved hugely popular. Unlike Ethereum, creating smart contracts on NEO doesn’t require the learning of a new programming language. This means that any developer can get started and build a smart economy on the NEO platform.
Neo also supports dApps development, while its blockchain has been praised for being particularly slick and sophisticated. Neo is also a highly innovative system.
NEO is one of the brightest young cryptocurrencies available in the niche, with an impressive portfolio of features, and a record of successful performance in the market.
NEO is also relatively affordable when it comes to its fee portfolio, and this process is conducted in such a way to afford NEO investors extra functionality and responsibility. There are a wide variety of trading options and strategies available for NEO.
It is also important for investors to manage risk by making use of a hedging strategy. New investors should look to gain experience before using leverage and committing higher capital.