Author: Jeremy Epstein / Source: VentureBeat
I struggle with NEO — currently the sixth most valuable cryptocurrency. It could be headed for a dominant position in the crypto world, but it could also be headed for self-destruction. I can’t figure out which.
The China market-size angle
I don’t react well to the line, “It’s the Ethereum of China,” because, well, anytime you say something is the _____ of China, you’re playing a bit of a marketing trick on people.
It’s an old one and it works, which is why people use it, but it’s a shortcut that creates hype and often masks the absence of a real business plan.
On the other hand, companies touted as the “Google of China,” “Amazon of China,” and “Facebook of China” — Baidu, Alibaba, and Tencent — are hugely dominant and profitable. It’s certainly true that the size of the Chinese market can make a success into an enormous success.
The technical architecture angle
NEO’s architecture also gives us a lot to like — and a lot to hate.
Noam Levenson wrote a brilliant piece called “NEO versus Ethereum: Why NEO might be 2018’s strongest cryptocurrency,” in which he outlines not just how NEO is like Ethereum, but how it is better.
One of the most intriguing elements is how the platform token (NEO) is separate from the processor payment token (GAS). Another is its use of Delegated Byzantine Fault Tolerant algorithm instead of Proof-of-Work to achieve consensus and reward shareholders. Other NEO strengths include developer accessibility and scalability potential.
But blockchain is first and foremost about decentralization, and NEO’s technical architecture seems to come up short on that front. You can read a world-class takedown of the platform from the Store of Value blog. It does a pretty solid, factually-based job of proving that NEO is “more centralized than Ripple,” that the validator nodes are controlled by NEO, and that nodes are legally liable to stay up, which…
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