Game Theory Group

The Blockchain Brief

Crypto Correction? The Chinese Ethereum? What Is NEO?

An attempt at simplifying blockchain concepts, companies, and coins.
Julian Jung

Good morning everyone! Before we jump into today's issue I thought I would address the crypto "crash" we've been seeing over the past two days. I have 25 of my friends invested in crypto freaking out and texting me every 5 minutes. And another group of 25 friends who are not into crypto texting me, "see I told you so...blah blah blah". First off, I hope every one is doing okay with this correction we are seeing across the board. I've seen this multiple times now where (+)(-)50-80% swings are no longer out of the ordinary.

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Here are a couple resources that I find very useful during times like these. 

TalkSpace - Cheaper alternative to me being your therapist
Drizly - I'd recommend Rubinoff if Grey Goose seems a little steep now
Tear Catchers - Comes with matching display tray

Also, before we get going. The newsletter circulation has grown far beyond our expectations in a very short period of time. As you can imagine, writing a near daily piece is a lot of work. We love doing it. If you have someone who would benefit, please do share this link with them. Or Tweet it out. Thank you!

Alright! Now for todays issue. Sorry for dropping the ball yesterday on your daily brief! Since the world of crypto is global and does not sleep, I was up until the wee hours of the night chatting with a couple Asian blockchain companies who are launching an ICO on the NEO platform today. 

With that being said, I thought to myself, what could be better than a post about the slumbering green giant known as NEO. One that has been touted as theEthereum of China! Let's get to it. 

Direct from their site: Neo is a blockchain project that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a "smart economy" with a distributed network.

  Schmoozing with NEO founder Da Hongfei at NYC meet up so that I can get you guys all the good inside scoops ;) 

Schmoozing with NEO founder Da Hongfei at NYC meet up so that I can get you guys all the good inside scoops ;) 

So what does that mean?

Simply put, NEO will build the future "smart economy" by digitizing real world assets (list of assets) via digital identity (think - all your personal identification information cryptographically secured on the blockchain) while leveraging the use of smart contracts and decentralized applications. 

So how does this compare to Ethereum? 

Extremely simplified: Ethereum is focused on building internet 2.0 by building a platform where users have all the tools they need to build decentralized applications. 

TL;DR: NEO = Economy of the future. ETH = Internet of the future. 

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The reason why I am so excited about NEO is because they have a number of differentiating factors when you compare it to ETH. 

- Working relationship Chinese government (if they are ever officially endorse NEO, I would expect NEO to eclipse ETH by multiples)

- For consensus, NEO uses delegated Byzantine Fault Tolerant (which is a form of proof of stake) while ETH is currently proof of work but will switch to proof of stake. 

- Developers are able to write DApps for NEO using C#, Java and eventually Python and Go. Whereas Ethereum requires developers to learn their native language Solidity. (NEO decreases barrier for entry to build on their platform) 

- NEO can handle 1,000 transactions per second while ETH can handle around 15 transactions per second

- NEO is the governing token of the platform that produces GAS tokens (so if you hold NEO, you will automatically produce GAS. You can look at this like receiving dividends on a stock)

- NEO trading around $45. GAS trading around $18. ETH trading around $575. 

2018 could be a very big year for NEO as well. They are starting to get a lot of developer interest to build on their platform and have over 27 upcoming ICOs. On top of that, they recently did a partnership with Microsoft and had over 300 teams enter their developer competition. 

Is it an Ethereum killer? No. I think they are both focused on building entirely different ecosystems. However if the stars align, we could see a large run up in NEO price in the new year (More DApps = More Demand For NEO = Price Increase).

I'll also follow up with a post early next week on why I believe GAS (NEO's crypto asset used for paying transaction fees) could be extremely undervalued. 

Just an FYI - I'll be taking a 3 week sabbatical to Thailand until the 16th of Jan, so if you hear less from me don't worry, I have not forsaken you. I'll try and post periodically and will have plenty of time to come up with new material, so please don't hesitate to ping me with topics! 

Happy holidays everyone! Stop staring at your portfolio tracker. Enjoy time with your loved ones! See you back at $25K ;)

- JJ

For those of you that are curious. Here are the two companies I was chatting with late last night. Will do separate post on The Key as I think it will be a monster. 

The Key - Decentralized identity verification (Private Sale Now. ICO late Jan.) 
Qlink - Decentralized mobile network (ICO Today. Sold Out.) 

Remember, nothing here is financial advice. 

Julian Jung