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NEO, once dubbed "China & # 39; s Ethereum" seems to be gradually declining. Since its founding in 2014, it has reached staggering heights of $ 194, plus worrying lows such as the current price of $ 7.50 and the historical low of $ 5.40. During his four or more years of activity, NEO has been a strong player in the field, but he has constantly encountered difficulties that he has not yet managed to overcome.
Neo & # 39; s Successful Start
In 2014, NEO started with only 7 investors, with much of the work to grow the company that was made by Da Hongfei and Wang Guan. Their initial vision was very different from the current operation that many have learned to know. Initially, they claimed to be entirely focused on digitizing resources and shifting things to peer-to-peer networks.
Their first ICO collected 2,100 Bitcoins from 186 accounts, which was quickly traded for RMB 4.65 million ($ 687,000). This money was used to expand the company, a result of which was their first original consensus algorithm. The full-time team has also doubled its size and the community has grown to 5,000 by August 2016.
The second ICO has collected 5,539 Bitcoins in just 1 month ($ 288,000): a big jump from the first. But not long after these maximums, the signs of conflict and division began to emerge and would have attracted the development of the group. The initial vision was not met with great success due to technical difficulties and regulatory obstacles. Faced with these problems, the NEO has changed course to favor the creation of a public chain for smart contracts and digital identity. This move was the first thing that gave rise to the NEO moniker as "Chinese Ethereum".
Their value began to rise rapidly in 2017, from $ 0.11 at the beginning of the year to $ 162 in January 2018. As more and more organizations grew, including NEO Global Capital (NGC) ) and NEO Global Development (NGD). But more growth seemed to only generate more problems for the group. They have been shaken by new competitors, even with the advantage of the first move. They were late in technical performance and in the development of a health DApp ecosystem. In general, it was a lack of good strategy that held them back.
The typical public chain focused on consensus algorithms, smart contracts, cross-chain technologies and related services, and their good work was reflected in a strong transaction rate per second (TPS) and in a friendly and welcoming developer community. NEO has made use of its fail-tolerant consent algorithm which has proved effective in achieving a consensus of participation of far-reaching nodes. While most were using POW (Proof-Of-Work), NEO did their thing, which is among their most impressive achievements. In the laboratory, they even boasted a TPS rate of 1,000, although it was more limited in its application when security needs were taken into account.
Fight
By July 2018 the NEOs had 7 nodes of consensus, but they had to face criticism to maintain centralized control over them. Only when the NEO CoZ developer community and the Dutch telecommunications company KPN chose to use NEO nodes in July and October 2018 respectively, have finally decided to take the first steps towards decentralization. This inability to enter the merits of decentralization, for some, was a capital sin.
No power to the community meant not acting in the true spirit of industry. Some are not agreeing, stating that a more cautious centralized approach, in the beginning, was a good move. Criticism continues, however, when we see that the NEO Foundation controls 50% of NEO tokens, and therefore most of the voting power when new nodes are created in 2019.
Although criticized for its centralized model, few have questioned the strength of the NEO in the field of smart contracts. Their NeoVM (NEO Virtual Machine) has been described as a leading product in the industry, supporting many traditional development languages including C #, Java and others. However, it does not support the strength of Ethereum, so the developers of Ethereum did not adopt the same method.
In some ways, NeoVM reflects the general problem of the company when it comes to technology: they have improved fundamental aspects such as security and reliability in smart contracts, but have done nothing to revolutionize the blockchain network.
Other big problems can explain why the NEO is now perceived as "disappeared", the largest of which is its developer community. Despite its reputation as a community building, NEO has done little to create an ecosystem that attracts a large number of developers on the platform. This, in turn, means that there is less output to attract users.
TokenView figures show that NEO's transaction volumes are falling, unlike those of Ethereum EOS and Waves that show stability or an increase in transactions as developers continue to expand the ecosystem with new elements.
Another problem they encountered is the lack of unity, with the basic team members sharing in other organizations such as Onchain, which is having considerable success. NEO has always encouraged entrepreneurship and independence as part of its ethos, but this may have rebelled against the fragmentation of team members adding value, leaving the NEO a stagnant development and lacking the sparks of creativity they need to succeed.
Faced with the lack of a good ecosystem for third-party developers, a poor marketing strategy and divisions that have dispelled key talent, it is difficult to see how the next NEO 3.0 will also save the company. NEO 3.0 does not yet have a precise timetable and may still be months before its release. Who knows what can happen in this dynamic sector during that period? Perhaps the NEO will be left behind again.
