Review on Gas by Fabrizio Zampieri
Before starting to talk about GAS we need to talk about NEO. NEO exists to…
Before starting to talk about GAS we need to talk about NEO.
NEO exists to bring the blockchain to Chinese developers, businesses, financial institutions, and even the government. Its tokens and decentralized applications can do anything the Ethereum network is capable of doing, with decentralized applications able to be programmed in several programming languages.
Moreover, NEO is not a mined currency — there were 100 million issued at the beginning and that is all there will ever be — so there is never a wait for blocks. It’s important to note that 50 million of these NEO were held back by the NEO Foundation in order to administer development.
There are no transaction fees on the NEO network, although there could potentially be in the future. However, GAS tokens are used to power smart contracts, and the fees are paid to NEO holders. A lack of transaction fees is intended to keep the network growing, which benefits all NEO holders. The more assets registered on the NEO blockchain, the more gas that NEO holders are rewarded with.
Along with the base token of NEO, GAS was launched with an identical maximum supply. GAS incentivizes people to hold NEO in that it slowly accrues in the account of every NEO holder over time, based on how many NEO they hold. There are calculators that give you an idea of how much GAS you can expect to earn. GAS will reach its 100 million mark in roughly 2039.
So, we can say that exist two tokens behind the NEO platform: NEO and GAS.
The full name for GAS is NeoGas, according to the NEO whitepaper. It’s the operational token that fuels the smart contracts and tokens built on the NEO blockchain. NEO uses a separate token like GAS so that ownership/management of NEO is not directly tied to the utilization of the platform.
The supply of GAS grows by 8 with every block (15-25 seconds). These 8 GAS are split between all NEO holders. Every two million blocks, the per block GAS reward to NEO holders decreases by 1. The maximum limit of GAS is 100 million tokens, but NEO doesn’t expect to reach that point for 22 years.
So, NEO holders will need to hold their NEO in private wallets in order to claim their GAS. If you buy NEO and leave it in an exchange wallet, you won’t collect GAS.
Pros
- The GAS token is less an investment opportunity and more an operational token. However, the value of GAS will likely increase along with NEO’s popularity. One option for investors excited about NEO is to purchase the NEO token. Then, you’ll automatically earn GAS with every newly completed block, increasing your dividends. The NEO token will also appreciate as the platform grows in popularity, creating a win-win. The interesting thing about GAS is its dynamic with NEO, seeing as NEO holders receive GAS in a similar manner to which shareholders earn dividends. This means that said holders are rewarded with a part of the GAS fees paid by the developers. GAS must be spent on the registration fees of the smart contracts in order for the apps to run on the NEO platform. Afterwards this GAS will be recycled back to the NEO holders along with the newly generated GAS. Basically this means that the more the NEO network is used, the NEO holders will produce more and more GAS.
Cons
- Although GAS has seen a rise in its price, there are no real-world applications for the token aside from developers or users of the NEO platform. Other than that, there is no other reason to have it. Another negative aspect would be the fact that you can’t buy GAS for fiat on any exchange.
