The cryptocurrency used to pay on the NEO blockchain is called Gas. Neo is the native coin of the NEO network, the Chinese equivalent of Ethereum. This article will cover everything you need to know about the NEO blockchain and the Gas token. To answer the question “What is NEO’s Gas token”, let’s first look into how the underlying NEO blockchain works.
What is NEO?
NEO is a Chinese blockchain that has been labeled “the Chinese Ethereum .” It was launched by Da Hongfei and Erik Zhang in 2014, who also founded Ontology. Their company AntShares is one of the tech behemoths on the Chinese market. Though NEO is dubbed the “Chinese Ethereum”, there is a crucial difference between the two projects. While Ethereum was launched by Vitalik Buterin as a decentralized open source project that is free from governmental influence, NEO is not quite the same. It is approved by the relevant Chinese regulatory bodies, but also allow users to trade P2P and is open source similar to Ethereum.
NEO also offers smart contracts that, unlike smart contracts on the Ethereum blockchain, use mainstream programming languages such as Java, Python, and C. Gas will play a part in using these smart contracts. New NEO tokens are used as currency on the network and have a supply cap of 100 million.
What is Gas?
You need to pay a transaction fee on almost every blockchain to execute a transaction or a smart contract. On the Ethereum blockchain, this fee is called gas but is calculated in gwei, a subunit of the native ether coin. On the NEO blockchain, you also need to pay for gas. Neo is not needed, but instead, NEO uses a dedicated coin for paying gas fees called “Gas.” The nodes that validate these transactions set the costs for conducting a transaction and executing a smart contract.
Gas tokens are released based on a schedule on the NEO blockchain that distributes Gas according to the block validated. A certain number of GAS tokens are emitted for each block, starting with 8 GAS per block for the first two million blocks. One less GAS token is released every two million blocks, until from block number 14 million and one until block number 42 million, 1 GAS per block is released. The total supply of GAS tokens will reach 100 million in about 20 years. You can earn GAS by running your validator node or staking NEO.
Conclusion
The answer to “What is Gas” is, therefore, “to pay gas, Neo is useless on the NEO blockchain, you need a special GAS token.” Although this is a bit unusual in the beginning, it soon becomes quite intuitive to use.