Disclaimer: theese are my personal reflections. I could be wrong or have misunderstanding something. This is not a buy or sell recomendation. I'm not related with NEO team or businnes more than the fact that I'm owner of some NEO and GAS.
GAS has increases a lot it's price recently, and GAS price could be even higher that NEO price. Some people think that then could be worth it to buy and hold GAS than NEO. I think that's not true for the long term and here is my explanation.
There are only 100.000.000 NEO and there will be only 100.000.000 GAS. If each NEO generates only one GAS, will it be wise to buy and hold GAS than NEO? Not for the long term, and I'll explain here how it's possible to earn more than one GAS worth just with one NEO.
First, just some words from NEO and GAS creators:
As erikzhang said:
"NEO is a governing token, the value of NEO will be grow while the usage of system. And GAS is utility token, the price of it should be stable. This is why we should have a dual-token model"
https://www.reddit.com/r/NEO/comments/6puffo/we_are_da_hongfei_and_erik_zhang_founders_of_neo/dksunz5/
"the NEO holder will get benefits in two ways: one is each block will reward to him so that if he hold 1 neo and keep 22 years so as to get 1 gas. On the another hand, he will get benefits from the gas consuming of the users of NEO system. If no one use the system, he will just get 1 gas after 22 years with 1 neo. But you can imagine if more and more users for the NEO system, how much the NEO holder will get, much more than the first way, right?"
http://appnationconference.com/video/yFOUvcmwpZwM#
How is it possible? Is it something wrong? No.
Well, first you have to see NEO like shares of a company. That company is a factory of wealth, as all companies. In this case, it generates wealth providing network services that run with GAS. Network parameters are set by the NEO shares owners. Don't forget it.
NEO shares owners are for the very very long term, and want to and earn dividends periodically, let's say on a monthly basis. How? Selling their GAS.
NEO holders has to focus on dividends that can get periodically. The worth in the long term is set by the profits earned month by month.
Ok, now let's go with it:
Forget for a moment about the GAS price. Imagine that GAS price just fluctuate. Can be higher o lower than the NEO price. Don't worry about that. Let's see what happens with the NEO holders.
An extreme case. Let's imagine that the network is not used in anyway, and the NEO holders just hold their GAS. At the end, each ANS generates just one GAS, so the maximium GAS that you can earn with 100 NEO is 100 GAS if you got it from the very begining.
Ok, now imagine that the network is running, with a lot of operations. This means spending GAS. This means that NEO holders has sell at least some GAS.
Remember that NEO-GAS is design for real economy and interaction with all type of currencies, contracts and values in the world.
Imagine that each NEO holder sells half of their GAS for USD. They earn USD. This has to be done because if they just hold all the GAS, the network will not run, and remember that the network is the business of the NEO holders.
So, the NEO holders sell half of their GAS for USD. Even all GAS that they have. The GAS participates in transactions and in each transaction, NEO holders are rewarded with more GAS!
As I understand, this NEO to GAS calculator take into account basically the 1 GAS for each NEO, but in the future there will be more and more GAS earned for NEO holders as network increases it's operation volume.
That's the point. If every NEO holder just hold all their GAS, they will never earn more that 1 GAS for each 1 NEO. But, as it is planned to work, if the network is running with transactions (and for that NEO holders has to periodically sell their GAS to earn profits, as it's happening of course), then NEO holders will earn more and more in USD or whatever currency used to sell GAS.
In summary, if you hold NEO you earn:
- Up to 1 GAS for each NEO, just doing nothing, in 22 years, even there is no transactions in the network and everybody just hold GAS
- Plus more and more GAS (but the equivalent in USD or other currencies each time you sell GAS) for each new transaction in the network. Just voting, managing the network and ensuring it's health.
Without end.
And this is why the owner of 100 NEO could earn (and sell) not only 100 GAS but 100 GAS equivalent again and again, without stop.
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