The NEO (NEO) Smart Economy is one of the most impressive and least appreciated blockchain projects out there.
Impressively, NEO’s MainNet or infrastructure has been up and running for over two years, since October 2017. However, Mr. Market has little respect for NEO. For example, NEO was the 17th ranked cryptocurrency on CoinMarketCap on 17 January 2018.
On the other hand, the NEO (NEO) tokens achieved a Market Capitalization of $502.486 million and a 24-Hour Market Volume of $128.628 million on the same day. Interestingly, those numbers were achieved on a Circulating Supply of 65 million NEO and a Total Supply of 100 million.
Those numbers gave NEO a Coin Price of $7.17 on 17 January 2018. Moreover, I think that price is justified because the NEO (NEO) Smart Economy is one of the most impressive and professional blockchain projects I have seen.
What is the NEO (NEO) Smart Economy?
The goal of the Chinese-based NEO is apparently to offer everybody a blockchain based digital identity. Beyond that, the NEO organization is trying to build a new kind of marketplace based on smart contracts and digital assets.
Theoretically, everybody would be able to buy and sell digital assets for NEO infrastructure tokens. Additionally, the transactions will be protected and guaranteed by smart contracts.
In detail, a smart contract is a blockchain based app that governs a transaction. For instance, a smart contract annuity will automatically make payments to a beneficiary. On the other hand, a smart contract life insurance policy could automatically collect premiums and automatically pay beneficiaries upon the owner’s death.
The NEO Smart Contract Economy
Therefore, the NEO (NEO) Smart Economy is really a smart contract economy. To work, a smart contract economy will need a method of verifying and protecting digital identities.
For instance, the smart contract life insurance policy will need some means of verifying the beneficiaries’ identity. Moreover, people will need some means of proving their identities to the smart contracts.
NEO is attempting to provide those digital identities with a Public Key Infrastructure (PKI). To explain, the PKI is a set of digital identity standards maintained by the Neo MainBot.
Obviously, a good way to think of a digital identity is as an avatar. The digital identity allows a person to operate in the Smart Economy in the same way avatars operate in gaming platforms. To verify digital identities there will be a web of trust.
Importantly, the PKI is part of the NeoContract smart contract system. The NeoContract system is based on NEO’s Universal Virtual Lightweight Machine. Notably, developers all over the world will be able to use the NEO Virtual Machine or NeoVM to build smart contracts and decentralized apps (DApps).
Is the NEO (NEO) Smart Economy a better Ethereum?
Under these circumstances, the NEO (NEO) Smart Economy looks like an attempt to build a bigger and better Ethereum.
There are some big differences between NEO (NEO) and Ethereum that we must examine. First, NEO is more corporate and centralized than Ethereum.
For instance, NEO founder Da Hongfei calls himself a Chief Executive Officer (CEO). Not surprisingly, Da behaves more like a Silicon Valley executive or a Chinese technocrat than an eccentric genius. Unlike Vitalik Buterin, Da has actually been seen in public wearing a suit.
To drive its adoption, Da’s team stages formal Hackathons, Devcons, and other well-organized events around the world. It even holds a Hackathon Tour that visits cities like Rotterdam and Zurich works closely with local entities like Universities. For example, NEO partnered with Delft Technical University for its October 2018 Netherlands Hackathon.
Such events are very smart because they give NEO access to the best and brightest minds at technical universities. The Hackathons serve as recruiting events for NEO developers.
Is the NEO (NEO) Smart Currency really open-sourced?
The centralized structure raises an interesting question: is the NEO (NEO) Smart economy really open-sourced?
Obviously, NEO allows almost anybody to participate in its smart economy. For example, NEO is working closely with the team behind the GoLang or Go Programming Language, open-sourced language for smart contracts.
However, there are some serious to NEO’s openness. In particular, the NEO (NEO) infrastructure program is not Ethereum (ETH) or EOS (EOS) convertible. Hence, it will be hard to spend NEO outside the NEO Smart Economy.
In contrast, Ethereum (ETH) can be converted into hundreds of ERC (Ethereum Request for Contract) tokens. To explain, ERC tokens like ERC20 tokens are infrastructure tokens for Ethereum blockchain platforms.
Hence, the speed at which a blockchain can process transactions is very low. For instance, current versions of Ethereum can only process 15 to 20 transactions a second (TPS). Under those circumstances, an Ethereum smart contract or DApp could crash if it tries to process more than 15 transactions.
However, EOS’s developers claim their blockchain can process up to 1,000 transactions a second. Thus, an EOS DApp could theoretically service several hundred customers a second.
Consequently, EOS is apparently more business-ready than NEO. Notably, there is no mention of the blockchain scalability problem at NEO’s website.
The NEO (NEO) Smart Community needs to address blockchain scalability
In addition, EOS’s developers claim to offer interchain communication. That means tokens can be quickly moved from blockchain to blockchain.
Interchain communication is important for several reasons. For example, cryptocurrencies could be easily moved through sidechains. Specifically, a sidechain is a less encrypted shortcut between blockchains. Blockchains like EOS and Ripple (XRP) achieve a high rate of TPS by connecting sidechains to their blockchains.
An obvious way to achieve that goal will be to join the Bancor Network. Importantly, the Bancor Network is the organization behind the Bancor (BNT) infrastructure token and BancorX.
Is NEO (NEO) a good Cryptocurrency?
Conversely, EOS (EOS) had larger a Market Capitalization of $2.179 billion than NEO on 17 January 2018. For the record, Ethereum (ETH) had a Market Cap of $12.760 billion on 17 January 2018. Additionally, Coinmarketcapp ranked EOS (EOS) as the fifth most popular cryptocurrency on 17 January 2018; and Ether (ETH) as the third most popular altcoin on the same day.
In particular, EOS (EOS) may have hit upon the killer infrastructure token app by partially solving the blockchain scalability problem. However, the NEO (NEO) Smart Economy is not to be taken lightly because its digital identities could create a workable blockchain marketplace and economy if they work as advertised.
This story first appeared at Market Mad House your viewing portal for insanity of cryptocurrency.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.