New cryptocurrencies are created every day. Some are pump-and-dump scams that generate a quick profit for their creators, while others are tech experiments that ultimately go nowhere. Few become serious, long-term projects that can compete with the big-brand cryptos such as Bitcoin and Ethereum.
Since its launch in August 2017, NEO has shown several signs that it could become one of those few.
Dubbed by some as “the Chinese Ethereum,” NEO is an innovative new cryptocurrency with a lot of advantages over competing coins. NEO’s value has already more than tripled in value since its launch.
Here are five reasons that its value may be poised to rise a lot higher.
1. Made in China
The Chinese government sent shockwaves through cryptocurrency markets when they announced they were banning all initial coin offerings and Bitcoin exchanges. China’s influence over the emerging cryptocurrency field is enormous. Most experts predict China’s economy will eclipse the United States’ to become the world’s largest within the next few years. That will obviously have huge implications for global economic instruments such as Bitcoin and other cryptocurrencies.
In some ways, it’s strange that the Chinese government would move against established cryptocurrencies such as Bitcoin. Around 60% of global Bitcoin mining occurs within China’s borders, and the country, therefore, exerts greater control over Bitcoin than any other nation. NEO might be the key to understanding the Chinese government’s intentions.
NEO is an entirely Chinese venture, and soon after NEO’s launch, the value of a coin jumped from 8% to 11% after the team announced they were partnering with major Chinese financial institutions.
There’s a long history of Chinese entities copying foreign innovations and putting a Sino spin on them. Just as Baidu became the Chinese Google and Sina Weibo became the Chinese Twitter, NEO will have government backing that could help its value climb past foreign competitors such as Bitcoin and Ethereum.
NEO is far more than just a Chinese clone of Bitcoin or Ethereum. NEO is taking an innovative approach to blockchain technology that gives it several advantages over other cryptocurrencies.
All major cryptocurrencies operate through a centralized ledger where all transactions are recorded “on chain.” NEO is the first cryptocurrency to offer the possibility of off-chain transactions.
Recording all transactions through the blockchain is how Bitcoin and Ethereum are protected against fraud. It’s impossible to spend the same Bitcoin twice because there is a permanent record of all transactions on the blockchain. Any discrepancies between two versions of the blockchain will instantly be corrected and transactions voided.
NEO wants to do away with the concept of on-chain transactions. It allows all users to publish their transactions to the blockchain. That does away with one of the leading security features of Bitcoin and Ethereum, making it possible for multiple deals to be made using the same coins. NEO is protected from fraudulent activity by doing away with another central tenet of existing cryptocurrencies: anonymity.
By registering all users and putting a name to all transactions, NEO issues trust certificates that guard against fraud. If two purchases are made using the same supply of coins, NEO can block users from the blockchain permanently as a punishment.
It’s easy to see why doing away with anonymity would be of interest to a government looking to maintain centralized economic control. It also makes NEO much less likely to become a vehicle for money laundering and illegal dark web transactions than Bitcoin or Ethereum. But of course, whether eliminating anonymity is an overall positive is a contentious and subjective issue.
Ethereum wasn’t the first cryptocurrency to follow Bitcoin, but its innovative nature quickly pushed it beyond other competitors.
While the likes of Dash, Dogecoin, Litecoin, Monero, and Zcash have the same functionality as Bitcoin, Ethereum is more than just a currency. Ethereum is a platform for smart contracts and a rapidly-growing array of other applications.
Ethereum hype exploded once initial coin offerings emerged as a new blockchain-powered money-making opportunity. The Chinese Ethereum can do everything that the original Ethereum can. NEO also has a few extra tricks that aren’t currently possible using Ethereum.
The most significant advantage NEO’s off-chain transaction capability offers is speed. Requiring all transactions to be recorded in a centralized blockchain as they happen creates crazy bottlenecks in transaction speeds. By recording off-chain transactions later, NEO promises to eliminate delays caused by blockchain bottleneck entirely.
Blockchain bottlenecking is a major issue which seriously harms Bitcoin and other cryptos’ utility as a currency. When traffic is exceptionally heavy, it could take days for Bitcoin to push a transaction to the blockchain. Arguments over how to solve this problem have caused major drama within the Bitcoin community, which is an issue that NEO’s off-chain transaction capability elegantly side-steps.
As with Fiat currencies, cryptocurrencies are only worth what people are willing to pay for them. Reputation is everything in the cryptocurrency world. Judging by the massive amount of hype it’s already generated, NEO has enormous potential to rise in value.
When NEO first started generating headlines in mainstream sources back in August 2017, its US Dollar value was hovering around $8. By the end of September, the price had more than tripled, reaching more than $30. At the same time, Ethereum’s rate was hovering in the $280 to $300 range. Meanwhile, the ever-volatile Bitcoin was veering wildly between just above $3,000 and an all-time high of $5,000 during September, averaging somewhere around $4,000.
NEO is a new entrant to the cryptocurrency markets. It has enormous potential, and there is no reason it couldn’t hit the same valuation as Ethereum, which would mean a 1000% increase in value. Of course, there are no such things as a guaranteed investment in the volatile cryptocurrency market. But NEO has a solid chance at making crazy gains.
5. The Team
In contrast to Bitcoin’s enigmatic creator Satoshi Nakamoto, the team behind NEO have drawn praise for their transparency and approachability.
NEO founder Da Hongfei has become an instant cryptocurrency celebrity, occupying a similar figurehead-type role to Ethereum’s founder Vitalik Buterin. There are risks to having a tech platform so closely associated with one particular individual. For example, Ethereum’s exchange value crashed after a hoax surrounding Buterin’s supposed death in June 2017. However, cases such as Apple and Steve Jobs, Microsoft and Bill Gates, and Facebook and Mark Zuckerberg all show that having a prominent figurehead can do a lot to boost an emerging tech company’s reputation.
Da Hongfei has shown signs of being an excellent ambassador for NEO. Hongfei comes across as open, friendly and personable in media interviews and social media interactions. He’s also well-connected, with the Chinese government inviting him to high-profile cryptocurrency and technology conferences.
As with all things crypto-related, it’s impossible to predict the future, and unforeseen circumstances could hurt NEO’s long-term growth. However, there are plenty of positive indications that NEO has impressive potential.