Hi everyone

In response to my last post people asked me to do a short post on what NEO gas and ethereum gas are. I'm trying to keep this high level. 

NEO (newly rebranded from antshares) is analogous to an equity share in the blockchain. Gas  by contrast is like fuel for a car. It is what is/will be paid to the blockchain network for consuming its processing resources. Applications will need to pay gas. The more processing power they consume , the more gas they will need to pay.

There will only ever be a finite amount of gas produced so its price will rise over time. 

Gas comes into being initially as a dividend to holders of the NEO coins (provided they are held in private wallets and not on a public exchange). See my post for how to download a wallet on a normal laptop as I ran into problems but a friend helped me fix it  https://steemit.com/neo/@katythompson/easy-way-to-get-private-antshares-neo-wallet-if-your-blockchain-synching-step-seems-very-slow

The dividend amount  is a slightly complex formula that basically decreases about 10% ish each year. In year one (now) we get something like 0.5 gas per day per 1000 NEO shares. However you can look up the exact amount you get on this neat app I found 

https://neotogas.com 

This also lists the trading price of NEO and its Gas which are $5.07 and $1.92 at the time of publishing this post.

The dividend holders can then sell their Gas on an exchange (or keep it as an investment)

App providers on the NEO network will either need to buy Gas on an exchange or buy NEO and collect the gas dividend and use that.

Just as gas is the fuel for the NEO network, so ( similar but not identical) gas is also the fuel for the Ethereum network. However unlike NEO, ethereum gas is NOT given as dividends to everyone that holds ethereum.  It will be possible to earn ethereum or its gas (i'm not sure which but someone reading this will doubtless know and can add that to the comments?) when ethereum moves to a proof of stake consensus model. But my understanding is that  not everyone will be able to be a proof of stake node to benefit. You have to have a minimum amount of Ethereum and to be selected somehow and there will be competition from the affluent ethereum holders to be a node. Those that are selected will put up some of their ethereum as a bond and in return they will be paid.  I don't think the amount of ethereum gas produced has a finite limit, but again someone correct me if I'm wrong..

So I think the main differences to a new investor between the way gas works for  NEO and Ethereum are:
a. The gas is finite in NEO but not in ethereum 
b. Anyone with NEO on a private wallet earns NEO gas, but this isn't true of anyone owning ethereum. There are ways to earn more ethereum from your original holding but it will favour bigger ethereum holders and not small holders.

This is a narrow focused post on gas as that's what I was asked my my reader to write. But to compare ethereum and NEO for investment potential you need to look at a range of criteria including:

-Number of develops and development ecosystem (Ethereum wins hands down right now but NEO is expected to get a good community in China)
- Likely success in West vs China 
- ICO market potential which has driven a lot of value for ethereum 
- Use cases
- Partnerships
- Consensus mechanism
- How robust it is or will be as we march towards quantum computing
- Its potential market cap and where it is today (how much growth it has)
- And the earning potential (e.g. the NEO gas dividend vs ethereum proof of stake) of your existing holding

I may cover a comparison of the two blockchains on these measures  if enough readers seem interested. 

I am not qualified to provide investment advice and am not doing so. But for disclosure I do hold some NEOas it sounds to me like the technology is really good, I expect it to do well in China (as Alibaba did relative to Amazon), NEO is only a percent or two of etherum' current market cap today (so much more upside) and NEO provides dividends. But if Ethereum falls much further in price I would get back into ethereum as well. 



Katy xx