Ethereum, EOS, NEO: Why You Need To Own All Three
EOS and NEO: they are called Ethereum killers because they are perceived to have a better mousetrap than Ethereum. True, each has its own decentralized blockchain platform that appeal to Dapp developers, but each one has different shortcomings. It is a mistake to try to pick a single winner. The better approach is to own all three. And with prices at relative rock bottom, now is a good time.
What Has Been Happening With Prices
Lately the prices of the so called Ethereum killers have been standout performers. Since the start of July, Bitcoin may have gained 18% but Ether, the second largest crypto gained a mere 1%.
Meanwhile, the price of Stellar (XLM) is up an impressive 45% just since the end of June, NEO by 12% and EOS by a little more than 20%. The market is telling us something.
What’s This Telling Us
Drawing big conclusions from a small sample can look pretty foolish. However, crypto investors are getting better informed and more discriminating. The four biggest coins – Bitcoin, Bitcoin Cash, Ether and Ripple – no longer trade in lock step. Investors are discovering that each has their own distinct issues to deal with.
Much the same can be said for Ether compared with so called Ethereum killers. Two of the biggest are EOS and NEO. We believe it is far too early in the evolution of cryptocurrencies and the opportunities far too great to call anyone the killer of anything. The all important key is mass adoption. This is not always achieved with superior technology.
That is why it pays to own each. Before accepting this conclusion, let’s look at a few points.
Ethereum: The Most Marbles
As recently as last December, Ethereum was the undisputed leader in decentralized apps. Nearly 80% of the 706 ICOs in 2017 were tokens attached to the Ethereum platform. This is clearly a powerful strength. But, Ethereum has an achilles heel that that others are trying to exploit.
Ethereum’s proof of work (PoW) consensus model is a slow process, yielding only about 14 transactions per second. In addition, critics fault the high transaction costs and lack of scalability.
This is a valid point and in the world of consensus networks, change comes slowly. But nobody believes Ethereum founder Vitalik Buterin is asleep.
On July 18, Ethereum released the final final test network of it’s Raiden Network before it goes live for everyday users. That event has been promised before the end of summer and will be the biggest step in addressing Ethereum’s scaling issues by allowing ethereum tokens to be traded on an off-chain payments channel. This frees up lots of space as smaller transactions are processed off-chain.
A Deeper Problem
Ethereum’s true achilles heel is not entirely scalability, but it’s programming language. Ethereum allows coding only in one language — Solidity. This is a new language and very few people know it. So, anyone who wants to build Dapps needs to learn a new language. For this to happen a developer has be convinced it is worth the time and effort.
EOS: Key Differences From Ethereum
The biggest difference from ETH is EOS’ use of delegated proof of stake (DPoS) consensus mechanism. EOS began life on the ETH network but decided to create its own blockchain. The EOS blockchain was recently announced highlighting no transaction fees and offering real competition to Ethereum.
The EOS network makes a fundamental tradeoff to become more centralized (having 21 block producers rather than an infinite number of miners in a proof of work model) in exchange for a faster, more scalable network. This could come back to haunt EOS in terms of decentralization issues.
And there is one characteristic weakness of EOS and every other ETH killer: programming flaws.
Less than 48 hours of going live, the EOS mainnet was stalled by unidentified issues, causing transactions to be frozen. This created an immediate negative reaction in the price of EOS and is singularly responsible for its recent poor performance.
Getting bad press reviews does not help popularize even a great platform.
The Chinese-based NEO (POS) platform operates on the basis of a smart economy. Using digital identity and the NEO blockchain, users are able to program, register, trade and circulate multiple types of assets. Translating this into English, we are talking about AI and IoT.
NEO is probably the biggest threat to ETH for the following reasons. First, it has the support of the Chinese government. That means loads of bucks for development.
NEO also has a unique dual token platform that uses GAS to run projects on the platform. Users of the NEO coin can earn “gas” and use to run their projects or trade it with other NEO users.
Who’s Going Kill Whom?
There is really only one question that goes unanswered. Who is going to be around making money for investors in 2018? This, no one can predict.
If you can compare this to the battle of Yahoo versus Google, in the long run Google was the winner. However early investors in Yahoo still profited in the billions.
So, having an equal stake in each is a common sense approach and, thanks to market conditions, the prices offer some pretty attractive value.
Featured image courtesy of Shutterstock.