On 25 Jul, 2018Welcome to the NEO Cryptocurrency Review. Interested in investing in cryptocurrency? Access our Blockchain 101 material before you dive in!
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NEO Cryptocurrency – What’s The Use Case?
NEO is often referred to as the “Ethereum Killer” and as ” Ethereum for China”. This is because it is essentially a clone of Ethereum.
NEO and Ethereum both have the same blockchain use cases: smart contracts and decentralized applications (dApps). However, NEO is unique because it runs a virtual machine which lets developers code smart contracts in a variety of languages such as C#, Java and Python. This is a big advantage NEO has over other dApp platforms.
Who’s Developing The Blockchain?
Listed on the NEO website as the “NEO Foundation”, Da Hongfei and Erik Zhang are the two co-chairs responsible for “Setting NEO’s Vision and Strategy”.
Da Hongfei
Da Hongfei is the Founder of NEO. Hongfei is also the Founder and CEO of Onchain, a blockchain development company focusing on both enterprise and institutions. Both of Hongfei’s projects were launched and are headquartered in China. The two were the first blockchain development projects based in China earning Hongfei the status of a blockchain and cryptocurrency “pioneer”. He has expertise in Chinese use adoption, enterprise applications and government regulation which is a huge plus for NEO.
Erik Zhang
Erik Zhang is Da Hongfei’s counterpart. Zhang is the co-Founder of NEO and founded Onchain with Da Hongfei. Erik Zhang is most known as being the “author of the DBFT consensus mechanism” and currently serves as the CTO of Onchain. Erik Zhang is a well respected developed in the space and is a very valuable asset to the NEO team.
Who Is NEO Partnered With?
Onchain
The most notable partnership of NEO consists of the Founder’s other blockchain project, Onchain.
Da Hongfei clearly stated what the two will work on together:
“NEO is a community project. Onchain doesn’t own NEO. NEO and Onchain are separate entities. NEO is a community driven/funded open-source project, while Onchain is a VC-backed company. The connections are: (1) Two of the five co-founders of Onchain are also founders of NEO (2) The consortium version of NEO, namely DNA, shares the same architecture and smart contract system with NEO (3) With NeoX, the cross-chain protocol, we are exploring the possibility of integrating permission less blockchain (NEO) with permissioned ones (DNA).”
Other NEO Partnerships & Influences
The NEO cryptocurrency website also lists the following as contributors to the project:
NEO Global Development (NGD) – “Realizing NEO’s Vision, Executing NEO’s Strategy.”
NEO Global Capital (NGC) – “Growing NEO’s Capital and Ecosystem by Investing in Exciting New Techs.” You can learn more at the NGC official website.
NEO Community – This has no description on the NEO website. The group is primarily made up of developers focusing on the “City of Zion” – ” a global, independent group of open source developers, designers and translators formed to support the NEO core and ecosystem.”
NEO Competitors and Competitive Advantages
Competitors
The following can be considered competitors to the NEO cryptocurrency:
- Ethereum
- Ethereum Classic
- Tron
- OmiseGo
- Lisk
- Cardano
- EOS
Competitive Advantages
The following can be considered competitive advantages that the NEO cryptocurrency has compared to competitors:
- Onchain has already received an endorsement from the government of Guiyang (the capital of Guizhou province of Southwest China). Onchain was among the first batch of companies that successfully passed the Chinese blockchain test in 2017 which led to an investment partnership with the Fosun Group. Although China has taken hard stance on various decentralized cryptocurrencies and ICOs, the government is still looking for blockchain solutions and remains open to working with companies that are willing to play by its rules. Both NEO and Onchain are the top contenders being they are local Chinese ventures. Government integration will greatly increase the widespread adoption of NEO.
- NEO doesn’t use a Proof of Work consensus system like Ethereum but instead uses Delegated Byzantine Fault Tolerance ( dbFT ) created by Erik Zhang. Essentially token holders that hold NEO in a wallet will generate receive GAS as a result. GAS is generated with each new block and distributed to token holders similar to a stock dividend which incentives users to HODL.
Risk
Competition in the space is the biggest risk to this project’s chance of succeeding. Smart Contracts are an amazing blockchain use case that will have a ton of application in the future. However, there are a ton of high profile projects (see Competitors section above) that are also working to achieve the same goal. It will be
Network and User Trends
It should be noted that Network Hashrate and Mining Distribution information were not readily available.
Transactions
The network has seen a huge rise in the number of transactions that have occurred over the past year. The number of transactions in a given month peaked in May 2018 with over 2,000,000 transactions taking place. However, there has been a decline over the past two months with only 1,100,000 transactions taking place in July 2018. Although there is still a large volume of transactions taking place on the network the downward trend is slightly alarming.
Transaction Fees
There are currently no transaction fees. The user can however choose to pay transaction fee for priority.
User Accounts
The NEO network has nearly 1,600,000 wallet addresses which is a a solid amount. It is unclear how many of these addresses are “active” but this is a good sign for this project.
Other Trends
CryptoCompare shows some other great social and development trends for NEO. The project has a very strong social media presence with a ton of activity on both Reddit and Twitter. There has been a lot of work going on in the development end of the platform as well which is a great sign for this network.
NEO Cryptocurrency A Good Investment?
Overall, the project sees itself as a distributed-platform for a new “smart economy.” The belief is that physical assets will be represented on the blockchain which will allow it to be traded, bought and sold via smart contract technology.
Incorporating digitalized assets, digital identity, and smart contracts, NEO’s vision of a “smart economy” is built on the type of vision akin to Chinese governance. NEO’s semi-centralized dbFT blockchain reflects this, with the NEO Council holding nearly 50% of tokens “to foster the ecosystem”.
NEO’s relationship with Onchain is a tremendous asset which will serve it well in the future. We expect to see the project increase it’s partnerships with other Chinese blockchain entities with some collaboration with the Chinese government in the future. NEO is one of the the more exciting projects in the space and has a lot of promise moving forward.
