NEO co-founder Erik Zhang predicted during a recent interview with CCN’s Christina Comben that Ethereum would eventually overtake Bitcoin as the leading cryptocurrency.
NEO is not the Chinese Ethereum
NEO has always been referred to as the Chinese Ethereum. Zhang, however, isn’t particularly fond of that comparison. In his view, “the labeling is a hype. We never introduced NEO this way, and I’m personally against this labeling.” He also pointed out that even though Ethereum is a great project, the two blockchains are very different.
Zhang explained that while NEO was conceived in China, it is a universal project, with developers all over the world contributing to its growth. He noted: “Although it was initiated by two Chinese people, I believe that the founder’s nationality is not the nationality of the project.”
In early 2018, NEO was ranked among the top ten cryptocurrencies. Despite its initial success, the project experienced a turbulent second half of the year and currently holds the 18th spot on CoinMarketCap.com’s ranking. Zhang, however, doesn’t care about the price of NEO. He stated that the team is focused on developing a blockchain project instead of playing a capital game. Their primary objective is to make the project even better.
Zhang talked about the key differences between NEO and Ethereum. He stated that “NEO and Ethereum both have their tokens. They can all run turing-complete smart contracts. But they also have a big difference. First, their consensus mechanisms are different. Ethereum uses a PoW algorithm, while NEO uses the dBFT algorithm.”
The differences between the projects extend beyond the technical level. Zhang claimed that “Ethereum wants to be a world computer that cannot be stopped, while NEO wants to serve the smart economy.”
NEO is ready for the formal economy
NEO co-founder Da Hongfei revealed at the Web Summit in Lisbon that NEO is ready for the formal economy. Zhang commented on that statement, saying: “In the past year, we have adhered to the principle of building NEO a compliance-ready blockchain. Although blockchain is treated differently in different countries, there’s no doubt that no country or region would turn away from blockchain technology.”
He added that “from the perspective of social revolution, blockchain has to be well monitored for mass application and healthy development. We’ve seen the liquidity being facilitated by unhealthy development; however, it propagated a wrong way of usage.”
He pointed out that NEO’s vision of a smart economy is made up of smart contracts, a digital economy, and digital assets. NEO wishes to focus its resources on the concept of digital identity in order to facilitate the development of a formal economy using blockchain technology.
Zhang revealed that NeoID is an important component that fosters the development of digital identity. He believes that “Blockchain has to be compliance-ready and associated with the real economy to achieve growth.”
The main aim of NEO is to make an impact on the real economy. Zhang emphasized that “what’s in NEO’s plan is to use blockchain to empower the real economy, and we firmly believe that NEO will build the future of smart economy.”
Cryptocurrency trading is not illegal in China, exchanges are
Regulation of the cryptocurrency space has been a hot topic over the past year. In China, authorities placed a ban on ICOs and cryptocurrency exchanges. Yet, according to Zhang, the Chinese government has continued to encourage the development of blockchain technology despite the ban.
He explained that “trading is not illegal, exchanges are illegal. This won’t hurt NEO, or the damage to NEO is the same as any other projects. You cannot trade NEO or other tokens on Chinese exchanges. But you can legally trade NEO or other tokens in other countries.”
NEO looking to run large-scale commercial applications
NEO hopes to eventually run large-scale commercial applications. For the network to achieve this, they will first have to improve NEO’s infrastructure by imparting it with both a higher tps as well as a more reliable dBFT consensus algorithm. The second step will be to develop a distributed storage network (NeoFS) so that applications can store massive amounts of data. The team will launch the second NEO DevCon in Seattle next month, where they will share more details about the progress.
Despite the slump in cryptocurrency prices, Zhang believes that this is the best time for people to get into blockchain: “Of course! This is one of the things I officially do. Just as the Internet has brought people into the digital economy era, I believe that the blockchain will lead people into the era of the smart economy. The changes in the economic system will bring people a better life.” He pointed out that the industry needs new talented developers who are eager to promote its innovative development, regardless of the current market situation.
NEO is preparing for a major update next year with the introduction of the NEO 3.0. For the network to implement this upgrade, it will need to have at least one hard fork.
Ethereum will overtake Bitcoin
The recent Bitcoin Cash hardfork had profound effects on the cryptocurrency market, sending prices into a steady downward spiral. Zhang, however, is not bothered by these market fluctuations. He stated that “from what I’ve observed, an industry has to weed out underperforming projects to achieve growth.”
He further predicted that Ethereum will surpass bitcoin as the leading cryptocurrency: In my opinion, Ethereum will sooner or later exceed Bitcoin and get the first position. But Ethereum will also face very fierce competition from other projects such as NEO.”
Zhang also discussed traditional financial institutions and their impact on the cryptocurrency space. He concluded: “as far as I know, many financial institutions are exploring the application of blockchain technology in financial scenarios. I don’t think traditional financial institutions can make any real achievements in the blockchain field. Because in my opinion, the nature of the blockchain is to reduce the cost of trust transfer through decentralization, and the nature of traditional financial institutions is to create trust through a centralized authority. These two ideas are contrary to each other and difficult to unify.”
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