The coin, NEO, has been going through some tough times lately. It hit its peak of over $50 in the middle of August and has been trending down ever since. For most cryptos, once it hits a high point of resistance, it's bound to drop and settle down at a certain point. However, for NEO, the price kept driving until it hit around $30, a 40% drop from its peak. What is going on?
NEO first started off as Antshare with its cute logo of an ant. It's the first ever open source blockchain from China and it started around 2014. They continued as Antshare until recently and they rebranded themselves as NEO. As the first blockchain from China, they carry a kind of burden because they want to prepare the future for other Chinese Altcoins and ICO's, I would think. And they have been getting support from various investors and from the Chinese Government so the future looks bright for them.
But recently, a Neo-based ICO called Red Pulse, set out a news that they will not be supporting Chinese Nationals on their ICO. This was a shocking news for both China and rest of the world because the homeland could not invest into their own project. Because this ICO was Neo-based, there have been a heavy drawbacks to Neo in terms of price. Dropping all the way to $30, Neo struggles to get back and find their rise up.
With Chinese nationals not being able to invest into Red Pulse, Neo consequently got the slack as well. However, does this mean the end of Neo? No way! Neo is far from going down and they haven't even started their rise. I believe that Neo's rise to $50 was mainly because of its rebranding; they went from a cartoon ant to a clean look and worked on their site to provide excellent information to the public. They annouced their plans and how they will work and update the project to accomplish the plans. Also, their development team seems to be in a solid shape. With Da Hongfei in charge, the team seems to know where they are going and is heading for the constant growth of Neo.
Not only they update the public with their goals but the system itself seems very promising. The smart economy that Neo is based off consists of three different areas: Digital Asset, Digital Identity, and Smart contract. From the Digital Asset, people will be able to use internet not only as value of information but a value of currency. From the Digital identity, Neo creates digital certificates that secures protection to all the assets throughout Neo platform. As for smart contract, it allows parallel operation between the parties and increases the scalability for the mass users.
And the last thing that I really love about Neo is the algorithm in which it operates through. It is called dBFT, delegated Byzantine Fault Tolerance alternative instead of Proof of Work or Proof of stake. In simple terms, Proof of Work is mining through GPU's and ASIC and Proof of Stake is once you have a certain number of the coin, you have to keep in running in your wallet/program to mine. Both POW and POS have its problems as POW is very power consuming and both can easily split itself into two different coins if they don't agree. For example, Ethereum split into ETC and ETH while Bitcoin split into BCC and BCT. But for Neo, the dBFT allows for everyone to mine depending on how much coin they own; whether they have one or a million, they will mine a currency called GAS according to their proportion. Also, they have a delegated system where a specialized node are randomly appointed as votes and if 2/3 of other nodes agree, they continue on. If not, the nodes switch to different vote and repeat the process.
Although Neo seems to drop in a short-term, I believe that the system itself is sustainable and scalable for the future. If this point is the support, I think this is a great buying time for Neo as it will recover from its slump and continue on its way to match its great potential.
I am not a financial/crypto expert so please do your own research before making your decisions. I am not responsible for any actions that you take.
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