NEO Smart Economy- China’s Take on Blockchain

Evolving my learning within the cryptocurrency space, I find myself sifting through the web like an archaeologist of the digital age, endlessly searching for that valuable project that will harness the power of blockchain, reshape economies and simultaneously a savvy investors piggybank. To be fair, I didn’t come around to this space until earlier this year when I had an actuarial friend open my eyes to what mathematicians, software developers and the financial sector had already started going crazy for. Like many others, I too had much doubt reading about this very unstable and volatile market. Not to mention, we have yet to really understand how to truly measure the intrinsic value of these technologies, and have only recently begun to define them as securities.

In truth, the world of bits and bytes is a lot more confusing than the material world we have come to understand. Nonetheless, the mystery has made it all the more fun and I’m burning more midnight oil than I have in a long time. Indeed there is an abundance of information to consume; the next hot ICO, the protocol layer with higher throughout, the currency that will supposedly challenge fiat, and the blockchain technology that these apps and currencies will run on. This is all very exciting, and in time, these developments may seriously shake up institutions and economies like nothing we’ve seen before. While some may react with fear, others react as opportunists. No one knew what the World Wide Web would bring us during the late 90's, but we know it now to be the most powerful tool of our time that migrated to the tips of our fingers. The same significance can be said for blockchain and distributed consensus. It is here, it is now, and it doesn’t just have the power to change the way we move value- it may just change the way we people.

That being said, while the internet boom produced revolutionary companies like Google, Napster, and Amazon, it also produced unmentionable companies like Broadcast.com, AskJeeves, and Pets.com. At one point, some of these companies were the darlings of their time, poised to takeover markets. The problem arose that it was impossible to know just how big the internet could be. Investors made huge assumptive risks and while some got paid, some paid dearly.

This brings me to my observation of NEO- a protocol Blockchain project out of China. While I could never say conclusively that this will be the next Google or Amazon, or more appropriately the next Wechat or Baidu, I can say that it’s developers have the most ambitious roadmap of any blockchain development community out there. NEO is seeking to revolutionize digital assets using smart contracts, and while some have dubbed it the “Ethereum of China”, the group involved wants to add a lot more to the mix than their competitor, whilst also seeking to regulate some of the problems that have arose from scammers and pump and dump ICO’s.

Currently, Ethereum can only be coded using Solidity, a proprietary language created by the organizations core developers. This has left a lot of programmers out of the fold. Developers coding using Java, .Net, Python, and others are told to learn the native tongue. Not true with NEO- by using a compiler, NEO allows for the use of all these languages. As a result, the project looks to attract a larger group of developers that would otherwise be ostracized. Further, NEO removes the always controversial “miners” that are used on the Ethereum blockchain which some have argued will ultimately affect scalability. Instead, NEO will use “bookkeeping nodes” that will be incentivized to run the NEO network. While some may say this takes away from the theme of decentralization, others believe that any system of this magnitude will require a voted and governing body. Also, by creating the core architecture this way, NEO becomes much more resistant to forking, which we are learning has become a huge barrier to scalability for bitcoin and others. Moreover, by adding structures of digital identity and blockchain inter-operability, NEO is also taking a crack at seriously making this technology applicable to end users and certificate authorities.

For me, my biggest attraction to NEO, though, is simply philosophical. It all comes back to one thing- China. A recent report showed that 35% of all web-traffic in China came through the infamous WeChat app. You may not know this, but this is where Chinese citizens do everything; shop, order food, hail a cab, message friends, post pictures, etc. Remembering that China is a communist country requires an entirely different perspective when assessing the value of a technology platform. This is a part of the world where the World Wide Web is put through a filter. Instead of a technology needing to cover a segment of the market, the technology needs to cover the entire market. This is suspected to be because the Chinese government wants copious amounts of user data that becomes available, and most certainly if capital is involved. This type of capital control also means that true “decentralization” isn’t really achievable in the Chinese Republic. While some may say this decreases competition, I see all of this as a reason to believe China is the best place in the world to have a platform monopoly. That is if you can gain critical mass. So far, NEO has setup a system that plays by all of big brothers rules.

Lastly, it’s important to remember that all of the western projects that have come about in recent months- EOS, Filecoin, Civic, etc., have great application, but it may be hard for Chinese investors to see the long-term with technologies that might not apply to their economies. Being the ICO platform of the east, NEO can very quickly open the floodgates for projects and developers who have yet to have a voice, along with individual and institutional investors. This untapped potential may have the power to take the NEO blockchain to the top of the pile and challenge Ethereum at its own game. In conclusion, it may be time to take note of what’s developing within the city of Zion.

Disclaimer: I am not a financial advisor and this is not financial advice.

Mickle & Abkowitz, 2017, https://www.wsj.com/articles/iphones-toughest-rival-in-china-is-wechat-a-messaging-app-1501412406?mod=e2tw