NEO vs. Ethereum: How Are the Two Cryptocurrencies Different?

neo vs ethNEO vs. Ethereum: What’s the Difference?

How are NEO and Ethereum different? That’s a question we get asked quite often, especially because one is cited as a dead ringer of the other. In the cryptocurrency world, NEO has been dubbed the “Chinese Ethereum” because many see it as the Chinese doppelganger of the North American cryptographic network Ethereum.

But that’s a misnomer in my book. The two are fairly different, and investors need to understand that.

Just to put it into perspective, Ethereum is your first-generation digital smart TV while NEO is the new-generation 4K Ultra HD TV. The comparison doesn’t get any simpler than that.

Both Ethereum and NEO offer a decentralized solution to their users, allowing them to share anything of value (money, property deeds, confidential data, etc.) privately and securely, without the interference or surveillance of a third party —like a bank, government institution, or private business.

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But the NEO cryptocurrency comes with better features; it’s faster, more secure, and more user-friendly than Ethereum.

Four Differences Between NEO and Ethereum

For starters, NEO is more scalable than Ethereum. What this simply means is that it can process more transactions in a second than Ethereum can.

Why does this matter? It saves time.

Say you are sending or receiving money to someone using ether (Ethereum’s crypto tokens) but there are about 1,000 other people who submitted a similar request before you. That means you have to get in line and wait your turn. With NEO, however, your wait times are significantly lower.

Ethereum’s current capacity is 15 transactions per second (although Ethereum’s founders are currently working on expanding its scale). In contrast, NEO can process up to 1,000 transactions in a second.

Second, NEO is more user-friendly (I’d say developer-friendly), because it supports multiple programming languages compared to Ethereum. It’s like going to a Chinese restaurant and finding a dozen other cuisines on the menu. With the Ethereum cryptocurrency, you only get to enjoy a “Happy Meal.”

Because NEO serves a broader range of palates, it has a better shot at hitting the mainstream much earlier than Ethereum.

With more developers working on its platform, chances are that NEO will be churning out a greater number of decentralized applications (DApps) in the long run. DApps are the real-life applications involving the use of this cryptocurrency.

Third, NEO protects the integrity of your investment. It is built in such a way that it doesn’t allow for unexpected “hard forks” to split its network. This is in contrast to Ethereum, which has already undergone a hard fork that split its network into two, giving us Ethereum and Ethereum Classic—two separate cryptocurrencies.

Confused? That’s exactly how Ethereum investors felt when they first heard of the split. Basically, some Ethereum developers found vulnerabilities in the network and disagreed with the founding team on how to go about solving it, so they split the network (hard-forked it) and created their own blockchain and cryptocurrency.

In the aftermath, the average Joes lost sleep wondering what was going to happen to their investments. The hard fork event created an air of uncertainty, and NEO wants to counter such occurrences by not allowing hard forks to occur on its network.

Fourth, the biggest difference between NEO and Ethereum is “GAS,” which is a unique reward paid by NEO to investors holding NEO coins. NEO GAS is a dividend paid by the network to owners of NEO coins. Yes, a dividend!

Unlike Ethereum, which rewards miners for mining ether, NEO rewards all NEO owners with a dividend, since NEO coins are not mined.

Now, that seems like one heck of an incentive to own this coin.

Here’s a quick summary of their differences.

NEO Vs. Ethereum: Summary

NEO Ethereum
Scale (transactions/second) 1,000/s  15/s 
Language support Multiple Single
Integrity Can only be soft-forked Can be hard-forked
Reward Rewards all NEO coin owners with dividend in the form of GAS Only rewards miners with ether

NEO vs. Ethereum: Where to InvestNEO-vs-Ethereum-Where-to-Invest

On a cursory look, it may seem like NEO is a better investment than Ethereum. But hold your horses.

Let’s not forget that Ethereum is still the second-most valuable cryptocurrency in the world, in terms of market cap. On top of that, Ethereum founder Vitalik Buterin has recently unveiled the road map for the next iteration of Ethereum’s technology, Ethereum 2.0, after which NEO will likely be on its toes.

This presents us with a major dilemma: Should you buy Ethereum or should you buy NEO?

Well, why pick one when you can have the best of both worlds?

Here’s the thing: there are over 1,300 cryptocurrencies out there. Naturally, you can’t buy all of them, but there’s no rule that says you can’t buy more than one.

Obviously, Ethereum and NEO both have their own pros and cons. Their pros, however, outweigh their cons when you compare them with most other cryptocurrencies.

NEO vs. Ethereum: Future PotentialNEO-vs-Ethereum-Future-Potential

A comparison of the Ethereum price history with the NEO price history may prove my point that both of these crypto coins have been great investments this year.

Both NEO and Ethereum prices have multiplied exponentially year-to-date and, at the pace they are going, chances are this rally will continue in 2018.

NEO and Ethereum prices chart

Chart courtesy of TradingView.com

Both Ethereum and NEO boast a promising outlook. Like I mentioned earlier, Ethereum 2.0 is in the works and, once it’s rolled out, it could prove to be a game-changer. Ethereum is already the second-most popular blockchain network after Bitcoin, which warrants its continued growth in the coming years.

The Ethereum price is currently shy of $500.00, and we at Profit Confidential are maintaining our price target of $1,000 in 2018, as laid out in our Ethereum price forecast for 2018.

Across the globe, NEO, the so-called Chinese Ethereum is working on expanding its network. The founder has shared his own plans to move to the global markets outside of China. Meanwhile, NEO is expanding its base within China, where it has the tacit support of the Chinese government.

The NEO coin price is hovering over $33.00, and my NEO price forecast for 2018 is intact at over $100.00.

At this point, however, I must deliver a fair warning. NEO, despite having delivered incredible five-digit returns, has been a very volatile investment. Its journey has been marked by too many ascensions followed by sharp drops. In contrast, Ethereum has been a more stable investment.

So, if roller-coasters make you feel nauseous, better go for a flatter ride.

Analyst Take:

The differences between NEO and Ethereum are too obvious to be ignored. NEO, the “Ethereum of the East” is nothing like the real Ethereum. Obviously, if the two were same, investors would have no incentive to pick NEO over the more popular Ethereum.

If you ask me who will win the final NEO vs. Ethereum showdown, I have to confess that I cannot give you a clear winner. If the bull market in cryptocurrencies continues in 2018, both NEO and Ethereum are well positioned to offer great returns on investments.

At the end of the day, your choice may depend on the size of your nest egg. With a modest sum, say, $5,000, you may be able to buy just 10 ether. In contrast, you could purchase 10 NEO coins for about $330.00 and be left with enough cash to put into other investments.

Just remember, a well diversified portfolio is less risky and can typically generate better returns. So invest wisely!