Why China’s New Ethereum “NEO” is the Next Big Thing
Since Bitcoin burst onto the scene, it has garnered immense support from investors who see the downsides of fiat currency. Many are simply chasing Bitcoin’s tail on its meteoric rise. The blockchain-based coin is valued for its ability to reward participants who run an automated transaction network: one that is infallible, unhackable and entirely liquid. However, it has largely failed to find suitable business applications, and the space it has left in the market is quickly filling.
Enter Ethereum – a cryptocurrency that expanded upon Bitcoin’s simplistic proof-of-work algorithm. It added the ability to create smart contracts that use the system as a middleman-free, enforceable platform for trade. However, no one could predict that Ethereum itself would spawn the single cryptocurrency boom, or that its strongest competitor–NEO–would come from China. (Related: China’s Confusing Relationship With Bitcoin)
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What is NEO?
Formerly known as Antshares, NEO is a recent iteration on Ethereum’s smart contracts. NEO uses a unique blockchain algorithm that improves upon Ethereum’s model. While the basics still apply, it also supports decentralized commerce, identification and digitization of several assets. NEO also closes loopholes that have caused some Ether contracts to be vulnerable to hackers.
Trends in the NEO Market
After hovering between 0.002BTC and 0.003BTC ($6 – $8) for months, NEO has made some astounding progress in both value and market capitalization. For the trailing month, NEO has been one of the top five highest-volume cryptocurrencies, among Bitcoin (BTC), Litecoin (LTC), Ripple (XRP), and others.
Since the beginning of August, NEO has gained more than 300%. There are a few reasons that the cryptocoin is experiencing such immense gains:
1. The Team and Their Idea: Founded by Da Hongfei, the NEO team is one of the most professional around. While many new ICOs (initial coin offerings) have teams that expound upon the pre-sale of the coin and its potential value, NEO takes the opposite strategy. Da’s team are relentlessly accessible to the public and speak on the technology’s real-world applications.
2. SegWit: Segregated witness was a Bitcoin blockchain event in which miners and users voted on block-size changes to make the chain more useful as a transacting platform. They succeeded overwhelmingly, giving the untested system more credibility and boosting price.
3. Fiat Troubles: Recent debt and currency troubles world-wide have seen investors flock to crypto as a safe-haven. NEO being a popular coin, is among the most heavily invested.
4. Ethereum Valuation: Markets draw obvious parallels between NEO and Ethereum. While ETH is the West’s smart contract player, NEO is a far East powerhouse. If Ethereum can hit $400 per coin, why not NEO (especially with a bigger market)?
5. Tweet-Gate: A tweet sent by the NEO team in early August indicated that the system would be partnering with Chinese financial institutions. Though the team quickly rescinded the tweet, it was enough hype to push NEO from its long-held $8 past $11.
6. China Crypto Support: Fiat troubles and technological prowess have made China one of the largest crypto markets in the world. NEO looks to take a piece of their fervor, and many believe the sky is the limit.