As part of my research on cryptocurrency projects I like to watch talks and presentations of the people who lead the projects. Neo is a project I keep a close eye on and today I watched the presentation that Da Hongfei (co-founder of Neo) gave a few days ago at the Jibrel Network Conference.
During his presentation, Da Hongfei talks about several interesting subjects. I have tried to summarize his talk (32 minutes) and take out the most interesting pieces of information. Of course you can also watch it yourself here :-)
Neo history
Da Hongfei starts with a brief introduction on the history of Neo. Interesting facts:
- Antshares (what would later be rebranded to Neo) was founded in 2014. In July that year they raised $90,000 in exchange for 10% of the tokens.
- Originally the founders were inspired by the fundraising campaign on BitcoinTalk for the first ASIC miner and they thought “Why don’t we build a blockchain for crowdfunding?”.
- Just prior to their testnet release in 2015, in September 2015 they did an ICO and raised another $700,000. Damn, that was a sweet moment to get in ;-)
- In September 2016 they had another sale of tokens and raised an extra $3,800,000.
- In October 2016 Neo’s mainnet was launched.
Smart economy emphasis
“I tend to agree with Eric Gu about digital assets. I believe, in the future, maybe in five to ten years, all assets will be **digital assets**. Even the physical assets will have representatives in a digital form. And then we can use smart contracts to manage all those digital assets.”
That is what Da Hongfei says when he emphasizes on the need for a smart economy. He goes on:
“But there is one catch. If today, the marketcap, the size of blockchain is already big, if we want to grow ten, a hundred or even a thousand times, I believe we have to connect with the real economy. So we need something more than smart contracts, more than digital assets, but what is that? I believe it is **digital identity**. We need digital identity to map the physical asset to the blockchain asset. We need digital identity to bring the relationship between people or people and organisation on the chain. So at Neo, the three pillars are: digital assets, smart contracts and digital identity.”
Important differences between Neo and Ethereum
When Hongfei talks about the most important differences with Ethereum, he brings up censorship:
“Our philosophy is not to be censorship-resistant. Ethereum and Bitcoin, they want to be censorship-resistant. But with Neo we want to be compliant, at least compliance ready.”
Something he mentions about the Neo consensus mechanism and I never thought of earlier was: “The beauty of dBFT is, it is not forkable. So there will not be any network split with dBFT. Also the performance, the scalability of Neo is much better than other projects….With Neo we can process 1,000 transactions per second and we are aiming at a very high tps in the future. The aim will be announced at the Neo DevCon.”
The Neo DevCon is 30th and 31st of January and personally I think they will go for 1 million tps :-P
So why does Neo have a dual-token system (NEO and GAS)?
“If I am a stockholder of Apple and I want to buy a new iPhone 10, within the one token system I have to use my stock to buy the iPhone 10 and the % of shares of Apple company just dropped. With a dual-token system your percentage, your stake is always the same.”
I guess that also explains why NEO is indivisible, just like traditional stocks.
What I notice is that he really focuses on the compliant-ready part: “With dBFT consensus, all the validators, all the nodes, all the people behind the nodes that are in the consensus process are identifiable. You will know who they are. So it is more compliant-ready.” No anonymity for the nodes at this moment..somewhat controversial?
Another controversial thing Neo did, or at least controversial back in 2015, is that they decided to reserve 50% of the tokens for themselves, for the virtual organisation, the Neo Council. Back then this was considered pre-mining and self-enrichment and thus a big taboo. Da Hongfei explains that they did this because they believe they need these resources to foster the ecosystem and to help the dApps to grow. In the coming years they will spend and distribute most of those tokens. The Neo Council will become less and less powerful so Neo will go from more authoritative to more democratic.
OnChain & Ontology
The founders of Neo also founded OnChain, basically providing distributed ledger technology for enterprises. It is a separate entity. In 2017 another project called Ontology founded as well because there was something missing in the puzzle. Ontology has its own independent blockchain but will use the same smart contract system and will share the same ecosystem as Neo. According to Da Hongfei:
“We still lack two key blockchain services. One is **fiat on the blockchain**. We need fiat on the blockchain to do real trustless atomic transactions. If we still rely on banks to do money transfers, blockchain is meaningless. When I send some digital assets to another party then we have to go through banks. It’s back to the point where we started. So we really need fiat on blockchain. A lot of central banks are now trying to figure out how to get it on the blockchain."
The other thing we are missing is **digital identity**, so we decided to do a project about digital identity. This is Ontology. Open infrastructures for distributed trust. It is more than identity. Businesses and people can basically do three things on top of Ontology. The first is **identification**. You can create and control an ID on Ontology. The second thing you can do is **attestation**. You can attach data to other IDs. If you are a university, you can attach qualifications to an ID. The third thing you can do is **authorisation**. When you have an ID and you control it, you can authorise other people to use those data attached to your own ID. And you can authorise who can use it for what purpose and how much I should be paid for sharing those data.”
Regulations in China
The last subject of the talk is regulation in China. Notable pieces of information:
- ICOs to the general public are illegal. So technically, from what I understand, it is legal to do a private sale to accredited investors. Talking about making the rich richer?
- Also interesting to see is that China bans centralised exchanges, which should slow down the escape from the capital controls in China. I am not sure whether that is really effective because one of the main themes in the space this year is Decentralized Exchanges (DEX). It will be hard for China to stop those :-)
- Lastly, Da Hongfei says something about mining in China. To his understanding some local governments subsidised (cheap electricity) some companies that promised to build cloud computing centers and big data centers. But when the government found out these companies were mining Bitcoins and Bitcoin speculation is discouraged by the government, the cheap electricity stopped and they are asked to move out. So a lot of mining pools are currently moving, even moving out of China.
Da Hongfei ends his presentation with a quote that I like from science fiction author Will Gibson: “The future is already here, it’s just not evenly distributed.”
All in all this presentation gave me some more insights on Neo, its ecosystem and especially the mindset and goals they have.
Hopefully you learned some new things from this post as well :-)
Cheers!
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Disclaimer: I am not a financial advisor, trader or developer. I am just a blockchain & cryptocurrencies enthusiast. Make sure you do your own research, draw your own conclusions and do not invest any money that you cannot afford to lose.