NEO—China’s Ethereum—is building a smart economy on blockchain
NEO, formerly known as AntShares, has been dubbed the Ethereum of China. Along with Qtum, it has one of China’s most successful crypto currencies. It is also China’s first open source blockchain.
Much like Ethereum, NEO uses a general purpose blockchain and runs smart contracts on it. Smart contracts aim to obliterate the traditional paper-based contract law. According to a definition by Nick Szabo, legal scholar and computer scientist known for his pioneering research into digital contracts and currencies, a smart contract is a computer function that can automatically execute the terms of a contract. To put it in simple terms, smart contracts help exchange money, property, shares, or anything of value in a transparent way without relying on a middleman, be it a lawyer, a broker or any other third party.
“Blockchain technology provides us with a decentralized, tamper-resistant, highly reliable system in which smart contracts are very useful,” NEO’s founder Da Hongfei told TechNode.
Platforms such as NEO help developers create blockchain solutions using smart contracts and create applications that are specific to a certain business. This means that it can be applied to all kinds of industries, including finance, insurance, law, healthcare, creative, and potentially more.
One of the projects using NEO’s platform is Red Pulse, a blockchain-based research platform covering China’s financial markets. The company aims to enable content creators to sell their research to readers in exchange for NEO tokens called RPX (Red Pulse Token).
“The platform will match research consumers with the research that is most relevant to them. Researchers can be reader-directed,” said Da. “Through the use of digital currencies, analysts and contributors can be compensated directly. This is vastly different from the current landscape of financial market research.”
Red Pulse had its fundraising planned on NEO’s platform on September 10th—it was supposed to be NEO’s first initial coin offering (ICO). And then came China’s ICO ban.
Red Pulse simply decided to postpone the sale of its tokens until the regulations are made clearer. But for NEO, the decision has sent the cryptocurrency on a downward spiral.
During August—which saw record price growth both for bitcoin and “altcoins” (alternatives to bitcoin)—NEO experienced a meteoric rise reaching market capitalization over $2 billion. The decision to ban ICOs and related fundraising activities issued on September 4th made NEO’s value drop and its investors panic.
Since then, NEO’s value has been steadily recovering but without the kind of high peaks witnessed during the August crypto frenzy. The reaction from its founder has so far been quite reserved.
“Compliance is inevitable after the blockchain industry matures to a certain stage,” said Da, adding that NEO has offered a full refund for its ICO participants and that government oversight will contribute to sustainable development of financial technologies.
Recent online reactions from big bitcoin players known as “whales” as well as ordinary buyers sound positive. This stems from the realization that trading crypto currencies can be extremely volatile and dependent on news and rumors. But it also seems that unlike many Chinese crypto currency offerings, which border on speculation or outright fraud, NEO has been developing actual products based on the blockchain. The company is betting on what they call the “Smart Economy” which involves creating standards for digital assets, smart contracts, and blockchain-based digital identity systems.
“NEO is the use of blockchain technology and digital identity to digitize assets, the use of smart contracts for digital assets to be self-managed, to achieve ‘Smart Economy’ with a distributed network,” said Da.
NEO has one more advantage—it has enabled developers to use multiple programming languages, such as C#, Java and Go. According to Da, development on NEO has a more smooth learning curve and shorter learning circle, allowing for a fast introduction of projects.
As several crypto pundits have pointed out, if NEO manages to bounce back, the ICO ban will prove a positive event—after all, many of their competitors in China may end up obliterated.