NEO2 - What is the NEO 3.0 Upgrade and How Will It Change The Crypto World?

What is the NEO 3.0 Upgrade and How Will It Change The Crypto World?

Back on July the 10th, NEO announced a more detailed version of the changes that it is going to implement to its network in the next months. We are talking about the NEO 3.0 upgrade that has been designed to make NEO accessible to important enterprises.

NEO 3.0

The NEO 3.0 upgrade is one of the most important upgrades ever to the NEO Smart Economy. It will be a completely new platform that will be focused on large scale enterprises. The main intention is to offer scalability, an optimized economy and more.

Erik Zhang, co-founder of NEO, explained:

“NEO 3.0 will be an entirely new version of the NEO platform, built for large scale enterprise use cases. It will provide higher TPS and stability, expanded APIs for smart contracts, optimized economic and pricing models, and much more. Most importantly, we will entirely redesign NEO’s core modules.”

One of the most important changes that will be made the the network is related to the transactions. There will be an increase in the number of transactions per second (TPS) that will speed up the entire network. At the moment, NEO is able to handle over 1,000 TPS at one time. neo 1 300x169 - What is the NEO 3.0 Upgrade and How Will It Change The Crypto World?

This is already a great number if we compare it with Ethereum and Bitcoin. Both of them can handle a very limited amount of transactions – Bitcoin can manage 7, and Ethereum 25.

But 1,000 transactions per second is still under the ideal and optimal number of TPS. If important and large-scale enterprises want to enter the market, then NEO will have to offer a better performance. Traditional financial companies, including VISA, can process more than 20,000 transactions per second during peak levels.

In order to increase the TPS, NEO wants to refactor the code and core modules, optimize the network protocol, implement the feature manifest and permission system for NeoContract, and prepare for dynamic sharding.

It is important to mention that the economic model will also be adjusted in order to offer a better service and platform for large scale companies. At the moment, NEO is an indivisible cryptocurrency, something that means that investors cannot buy a fraction of a NEO, they have to purchase a whole coin.

Additionally, the NEO network is fueled by GAS, and cannot be divided when paying for fees. But there are new upgrades and solutions proposed that aim to end with this system. There will be a small increase in the supply of GAS every single year, consensus nodes will be rewarded, NEO coins will be divisible, and it will be possible to use the decimal part of GAS to pay for system fees.

Of course, people made comments about these proposals. Malcom Lerider, senior research and development manager at NEO, suggested that an increase in the supply of GAS every time consensus nodes are awarded can be potentially harmful. Why? Because consensus nodes’ interest may change and manipulate the price of GAS for maximum profits.

Consensus nodes are an important part of the NEO network, but they currently have no economic incentive. They generate blocks and determine the service fees. Consensus nodes are voted by NEO holders, and in general, voters tend to elect consensus nodes that provide low service fees. The nodes that start increasing the fees are voted out.

Furthermore, consensus nodes receive funds from some NEO holders that decide to make a donation to them. If GAS is used to reward consensus nodes, then it would be harmful for NEO holders.

Of course, there are some experts that believe that the proposed changes are very positive for the smart economy and the ecosystem. For example, the user Saltyskip, said that GAS, as a deflationary currency, motivates holders to store their GAS instead of using it. And GAS has been created a utility token for the NEO platform.

If there is an increased supply of GAS, it should allow the network to increase is velocity, thus benefiting those holding NEO as currency.

Conclusion

The discussion about the NEO 3.0 upgrade is open and is being debated among enthusiasts and the NEO community. But the intention with this new upgrade is to better serve the entire Smart Economy that NEO has been building in the last times.

The press release uploaded by NEO explains:

“NEO 3.0 will be an entirely new version of the NEO platform, built for large scale enterprise use cases. It will provide higher TPS and stability, expanded APIs for smart contracts, optimized economic and pricing models, and much more. Most importantly, we will entirely redesign NEO’s core modules.”

With the latest proposals, NEO should be much more accessible to large-scale companies and enterprises that are searching blockchain platforms to offer better services and products. But most important, all the upgrades that are going to be performed will be beneficial for the NEO community.