When Ethereum creator Vitalik Buterin appeared on stage at the BeyondBlock event in Taipei on November 25, he took a thinly-veiled shot at a rival platform. While outlining his vision for Ethereum’s future growth and development, Buterin declared: “The Ethereum Killer is Ethereum, the Ethereum of China is Ethereum, the Ethereum of Taiwan is Ethereum… 2.0.” It was obvious to everyone in the cryptocurrency space what Buterin was referring to.

The Chinese Ethereum

NEO has never marketed itself as “Chinese Ethereum,” but that is what most Western investors have gotten used to calling it. Like Ethereum, NEO is both a cryptocurrency and a platform for decentralized apps (DApps). NEO’s Chinese origin has made it particularly attractive to Western speculators. The cryptocurrency market is red hot in China’s Far East neighbors Japan and South Korea. The Chinese government have put the brakes on China’s market, banning initial coin offerings (ICOs) and cryptocurrency exchanges. If NEO receives Chinese government approval, many predict its value will skyrocket.

NEO’s Western fans lap up news that points toward future Chinese government approval, such as NEO creator Da Hongfei being invited to a government-backed conference on the future of blockchain in China. The team behind NEO are also responsible for the OnChain project, which aims to implement blockchain technology to improve and connect almost every aspect of private and public administration. This is of particular interest in a country as large and complex as China, especially given that adoption of blockchain technology was specifically mentioned in the government’s five-year plan at the last Chinese Communist Party conference.

However, this focus on China can have its drawbacks. NEO recently hyped an upcoming announcement, which turned out to be a development contest sponsored by Microsoft. While a partnership with Microsoft would usually be big news, and it was a similar announcement that sparked the recent spike in IOTA’s value, many had expected NEO’s announcement to be related to long-anticipated government approval. In the disappointment that followed this announcement, NEO’s price rolled back from a high of $46.18 on November 18 to $33.86 on November 21.

NEO in the Second Half of 2017: Decline & Stall

NEO’s value exploded in the first half of 2017, beginning the year at around $0.14 and reaching a high of $50.33 on August 13. NEO’s summer surge coincided with a major rebranding, with NEO being the new name for the platform formerly known as Ant Shares. However, NEO has struggled to achieve the same dollar valuation since. It declined immediately following the August 13 all-time high, hitting $13.59 on September 15. NEO’s decline came at a time when rumors about a clampdown on Chinese cryptocurrency exchanges bloomed into an outright ban.

NEO has been on the rise since that mid-September low, hitting $47 on December 12. However, its worth noting that Bitcoin has seen an enormous surge in value since the summer, and Bitcoin’s performance is perhaps a better indicator of the relative strength of other cryptocurrencies than their US dollar value. So while one NEO was worth 0.01286150 BTC when it hit $50.33 on August 13, it was only worth 0.00271243 BTC when it hit $47 on December 12 – meaning NEO’s current worth in Bitcoin is almost a fifth of what it was in August.

At a time when other cryptocurrencies have performed incredibly bullishly, NEO has experienced months of stagnation against the dollar and a 475% relative decline against the price of Bitcoin. This performance looks even worse when compared to NEO’s supposed rival platform, Ethereum, which has gone from $149.80 on July 16 to $733.59 at the time of writing. But there are good reasons to believe that NEO is in a very strong position to make up for lost ground heading into 2018.

The Outlook for 2018

As a platform for DApps, NEO will live and die by the quality of applications that can be built on it. This is where things are looking very interesting going in 2018.

Red Pulse is among the highest-profile of NEO’s new offerings. Red Pulse aims to promote research into Chinese markets by rewarding such research with it’s Red Pulse token. Red Pulse’s overarching goal is to make Chinese markets more accessible to outside investors. This has attracted some major names to the project, with financial institutions using the platform including Bank of America Merrill Lynch, Commonwealth Bank of Australia, China CITIC Bank International, China Construction Bank, Credit Suisse, Goldman Sachs, HSBC, Morgan Stanley, Societe Generale, Sumitomo Mitsui Financial Group (SMFG), Sun Life Financial, and others. The business and financial news giant Bloomberg is another institution that will be using Red Pulse.

There are dozens of other DApps in the pipeline. The consumer data exchange APEX-A has huge potential, with major Chinese tech firms AliBaba, Baidu, and Tecent among its users. The NEX distributed exchange could revolutionize the way in which cryptocurrencies are traded. Ontology and The Key both utilize blockchain tech for cutting-edge identity verification and data exchange. Both are extremely promising propositions, and it’s worth noting that The Kay has partnered with IBM and MIIT. Other ambitious projects include Elastos’ attempt to create a decentralized internet, Stokit’s decentralized cloud storage, and Qlink’s decentralized mobile network.

Decentralization is a key part of NEO’s roadmap for the coming year. One of the biggest criticisms that is currently levelled at NEO is that it is extremely centralized compared to other major cryptocurrencies, with just seven nodes in operation. NEO’s team plans to expand this significantly in the coming weeks.

ProjectICO has moved their focus from Ethereum to NEO, which should lead to more high-quality project being launched on the NEO platform in the next twelve months.

While Ethereum pushed the world of blockchain and cryptocurrency forward considerably with its introduction of DApps, NEO’s focus on being the go-to platform for the emerging smart economy could push things even further. Sensitive to the Chinese government’s wariness of decentralization, NEO is fully focused on being compliance ready. NEO aims to be transparent and verifiable in a way that may be anathema to the libertarians who see cryptocurrency as a tool to free the world from governments and big finance. While this focus makes NEO less attractive to some of cryptocurrency’s hardcore long-term holders, it could be an amazing competitive advantage moving forward.

2018: The Year of NEO?

While NEO’s market momentum has been stalled since last summer, a lot of exciting developments have been occurring around the platform that put it in a great position heading into 2018. NEO will certainly be one of the most interesting projects to follow over the coming 12 months.