NEO has often been compared to “The Chinese Ethereum,” and for good reason. Among other things, the platform operates smart contracts and decentralized applications in a similar manner. However, to stay in business in the world’s toughest regulatory environment, NEO has to stick by the rules – which has put the project at the top of the Chinese blockchain food chain.
Play by the rules
In an interview with the Hong Kong Economic Journal, NEO founder Da Hong-fei did not deny the similarities between its platform – the 10th largest cryptocurrency by market capitalization – and Ethereum, the second largest cryptocurrency by market capitalization.
Da noted, however, that NEO’s focus is firmly on complying with the regulations in what is arguably the most restrictive cryptocurrency market in the world. Hence, Da claims that NEO has more uses than its main competitor. He stated:
One of the biggest differences [between NEO and Ethereum] is NEO’s focus on leveraging blockchain and other new technologies to serve the real economy.
However, Da admitted that legal compliance means less anonymity. The tradeoff, however, is that regulatory transparency allows for smoother business relationships with traditional companies and governments – which increases the project’s chances of success.
Additionally, Da noted that crackdown in China was good for both NEO and the country’s cryptocurrency space overall, as it practically destroyed fraudulent activity in the country’s market and leaves NEO in a position of leadership.
Only the strong will survive
The cryptocurrency market has always seen extreme volatility, and 2018 was no different. The total market cap of the cryptocurrency market fell from $ 830 billion in early January to below $ 250 billion in early April – and NEO did not go unaffected.
During that time, NEO fell from just over $ 190 to just under $ 45. Even so, Da says that there is nothing to worry about, as everything is just a matter of course. He explained:
It reminds me of the similar correction in 2013 when Bitcoin rose to 8,000 yuan before seeing a correction to its low of around 900 yuan […] despite the massive collapse all [in the sector] continued to pay close attention to cryptocurrency technology.
Furthermore, Da claims that if the naysayers cryptocurrency bubble ever bursts, only the strong projects will survive. He stated:
The crypto bubble, if any, should have burst as many crypto tokens in the market have fallen below their list prices.
Many of these projects or companies only use blockchain technology because they are interested in the ICO model as a new way of raising funds. I believe that many blockchain projects that have sprung up recently would go away or become inactive in three years.
At the pace at which things are currently going, NEO’s survival doesn’t seem to be in question.
What is your opinion on “The Chinese Ethereum”? Do you think regulatory compliance is critical to NEO’s success? Let us know in the comments below!
Images courtesy of Pixabay and Bitcoinist Archives.
[Disclaimer: The author of this article is a holder of NEO, and various other cryptocurrencies.]
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