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Op-Ed

Why NEO Is My Favorite Coin

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Bitcoin’s price point of $9,600 isn’t really bothering me too much anymore. I really don’t think we are going to be heading down to the $7,000s again, as we have opened so much access since then. Robinhood Exchange is now live in a handful of states. E-Trade is thinking of doing 24/7 trading to compete for cryptocurrency trader volume.

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I don’t even think the world is ready to learn more than one cryptocurrency right now. All the pundits talk about is bitcoin, and many are predicting its eventual fall to zero. Our cohesive investment effort has annoyed the right people, and I just can’t imagine we will be waiting much longer to re-test some higher levels. One man’s opinion. I don’t own bitcoin, but I root like hell for it. You should too.

After doing my research, I am going to make a very rare statement and say that NEO is my favorite coin. If you followed me on Twitter for longer than 2 minutes you’d know Ethereum is the coin bundle of joy for me. But being a user of NEO is an experience. You earn dividends in GAS, NEON Wallet is a juggernaut, and their smart contracts contain everyone’s cozy coding languages so they don’t have to bother with learning new languages to do things. Let’s see what you think.

Background

NEO was founded originally as AntShares in 2014, roughly around the same time Ethereum was coming out with its crowd sale (Summer 2014). That’s important to note. This is an extremely mature team. Their purpose was to create an Ethereum-like network that was built for public and corporate commerce and consumption.

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The platform has quality DAPPs, smart contract functionality, and is much easier to work in, as all development languages are supported. The network fees are charged in GAS, a coin that is used as the base currency for doing business on the network. The NEO coin acts as voting shares within the network, where users also get paid an approx. 7.42% yield on each coin they own (payments are made in GAS).

The technology works on one blockchain, and operates using “Delegated Byzantine Fault Tolerance (dbFT)”, which is a way to rapidly verify transactions. This type of network system can support 10,000 transactions per second. I think we can call that scaled, right?

Leadership

Da Hongfei: This name should give you goosebumps in five years. He is the founder and CEO of NEO, and a blockchain integration company in China called OnChain. OnChain was the blockchain pioneer in China, and it was Da Hongfei who brought it to Chinese business’ attention. He is now one of the most respected experts in blockchain adoption in China, a country of 1.37 billion that is trying to compete with the United States in everything from Iron Ore to Racquetball.

Notable Tech Highlights

GAS: The easiest way on the internet to stake. All you have to do is get the NEON Wallet application on your computer, store your coins on the wallet (get a Ledger Wallet to store it when you’re offline), and the GAS yield is automatically tracked and awarded. GAS has risen above $50, so both coins are extremely valuable.

NEON Wallet: This is my favorite wallet. It has a very sleek design, easily understandable, and you can participate in NEO-based ICOs directly on the wallet. MyEtherWallet is not close in terms of usability for a non-coding person like myself. They are trying to appeal to people like me, which is a great sign. Please download it for yourself and try to poke around, I think you’ll agree.

NeoFS: This is a storage system on NEO. Because AntShares/NEO was designed by OnChain, I believe this will be a true value add for someone who wants a one-stop-shop for blockchain, and not having to go to three different blockchains for their different types of uses. If you remember Stratis’ work with Microsoft on storage, we can now classify NEO as both Ethereum-like in network function, and Stratis-like in capability of high level storage.

NeoX: This is the integration mechanism to execute across all blockchains. This will grant the ability for companies that OnChain partners with to connect to public blockchains for sharing, but also making it one sided to protect the private chain information that it doesn’t want getting out. Are you seeing this? He is trying to create an entire blockchain ecosystem for the Chinese economy.

Partnerships

Government (tentative, of course)

The Kingdom of Thailand is going to have different needs than the People’s Republic of China. One very key difference is centralization. NEO is all on one chain, easily fork-able, and all transactions are recorded. They have said they want to be the ones to test identity verification, as their blockchain was designed for it. This is beginning to sound very government friendly. The Chinese government recently announced in its five-year plan that “integrating blockchain will become a priority.” Da Hongfei has already been working with government officials through the cryptocurrency ban to make sure that he has a seat at the table when they begin to slowly open the doors again. China will be much quicker to adopt blockchain if they can control it, and I think NEO has the capability to give them that type of control.

ICOs

Because of the usability of NEON Wallet, I think there will be more ICOs launched on NEO. It is much easier for me as an investor to invest in an ICO directly from my wallet, with no mess in-between. I don’t invest in ICOs, but I know that this is sorely needed compared to the process people go through now. There are also compliance procedures. If there was a fraud coin, I am more confident that NEO’s team would step in before Ethereum’s (as we saw with the DAO). If all the offerings need to be bought in NEO or GAS, we now have a large buyer ecosystem.

Microsoft

I don’t think this is a full fledged partnership, but Microsoft Azure’s Song Qingjian spoke at NEO conference about their “Coco Framework,” which is using the same Delegated Byzantine Fault Tolerance (dbFT) that NEO uses within its blockchain framework. Stratis has worked with Microsoft Azure on its file cabinets, but not on its network. This could be a very interesting relationship when both networks have had some time to grow.

OnChain

If you read my prior article on OMG, this is the exact same structure that I am beginning to love. It is my opinion that AntShares was created out of necessity to scale their blockchain solutions for OnChain’s customers. Just like Omise, I am relying on the parent company to do all of the selling for NEO.

OnChain has a product called DNA (Distributed Networks Architecture), which is for business system integration into blockchain. In other words, this is a simpler way to store information, automate processes through smart contracts, and of course, comply with government regulations in a much more transparent way.

OnChain is the reason why NEO is my favorite coin. They will be the ones designing and implementing Chinese commerce on blockchain. Unless another platform such as this comes along with even more oversight transparency, the government is going to be choosing this one. Yes, I believe China will choose. OnChain’s designers knew who would be buying this product, and who would want to be watching. I can’t see any other mover taking this position.

Conclusion

I am buying more. Just like people who bought Alibaba or Tencent when it was dirt cheap, I wish I could buy OnChain stock. Da Hongfei is the guy people are listening to on the great migration of information onto the blockchain. It won’t be the kid on Twitter announcing announcements, I can promise you that.

I think I will be proven right on my assessment of this company very soon. They are already are very highly valued, but this network could be the technological veins that run through China as soon as they are comfortable enough to agree with it. This large-scale ban on cryptocurrencies is not like a Facebook ban. They are trying to figure out what the hell it is first. Da clearly is working hard at educating, and I think there will be some sneaky high NEO volume coming up in trading ahead of any bigger news of China’s fledgling interest in blockchain.

 

Well…It’s tough to say this isn’t a recommendation to buy or sell cryptocurrencies, but it isn’t! Do your own research. We have seen moves that have lost people a ton of money, even in the coins that I mentioned. Be careful.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 27 rated postsMythological God of Lightning. Cryptocurrency/Blockchain writer, evangelist, and friend. May the odds be ever in our favor.




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4 Comments

4 Comments

  1. scottolson

    February 26, 2018 at 3:11 am

    Thx for the article, did you find any piece of information how to buy some OnChain shares?

  2. embersburnbrightly

    February 26, 2018 at 3:18 am

    I am a big fan of OMG and NEO, and I like them even more after reading your well-written articles on both. Thank you.

  3. Mister.Ticot

    February 26, 2018 at 3:10 pm

    Good job, thank you 🙂

  4. febrocas

    February 27, 2018 at 4:55 pm

    Nice article although there is a huge flaw with the NEO/GAS logic rendering neo smart-contracts useless for most developers.
    For example, when i deploy smart contracts in eth i pay a max of 20-30 usd in gas fees. Which is fine if i want to create a crowdsale contract for example.
    Try that in neo. The fact the gas price is so high is amazing for investors and terrible for users (devs). Meaning, i need to purchase a bunch of gas to spend or a bunch of neo to stake gas i order to deploy contracts. With a gas price = $50, i really dont see a way for startups to use the platform.

    https://www.reddit.com/r/NEO/comments/7iu6ua/the_contract_gas_fee_prices_out_promising_startups/

    http://docs.neo.org/en-us/sc/systemfees.html#transaction-fees

    https://news.ycombinator.com/item?id=15371598

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Market Overview

Comparing Nasdaq and Bitcoin: What Lessons Can We Learn?

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Bubbles

Over the past few months, lots of people have talked about the similarities between the .com bubble in the early 2000s and the bitcoin market today. It seems that the further down the bitcoin market goes; the more people are using this analogue to help them stay in the game for the long-run.

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One of the influential people in the crypto space who often refers to this comparison is Teeka Tiwari at Palm Beach Research Group. While he usually compares the Nasdaq during the late 1990s with the total cryptocurrency market cap, we are here going to compare the Nasdaq during that same period with the market for bitcoin specifically.

Nasdaq vs Bitcoin

In the image above, the top chart is a weekly chart of bitcoin, while the bottom chart is a monthly chart of the Nasdaq 100 Index from 1989 to 2004.

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As we all know, the crypto market tends to behave like the stock market on steroids. Moves are larger, and trends change faster in crypto compared to in stocks. It therefore makes more sense to compare these two charts using different timeframes, which is why I have chosen the monthly chart for Nasdaq while bitcoin is represented with a weekly chart.

There are a few interesting things to take note of regarding this comparison:

The Nasdaq found support following the crash in 2000 and 2001, and has later gained more than 600%. The Nasdaq has, in other words, returned more than three times as much for investors than the broader S&P500 index has done.

One explanation for why all financial bubbles have so much in common is that the one thing that causes them – human fear and greed – never changes.

What was different during the dot-com bubble back in the early 2000s was that communication was slow and ineffective compared to the high-speed Internet connections we have today on our phones and laptops. This is one of the reasons why it took the Nasdaq a few years to rise 1,700%, while bitcoin managed to achieve the same return in just a few months.

Similarly, it took the Nasdaq 30 months to fall 78%, while bitcoin lost 70% in just one and a half month.

Another thing both markets have had in common is that when they were down 70% from the top, many people completely lost faith in the future of these markets.

It has been pointed out by observers that even the arguments these people used against investing in the said markets were largely the same: No underlying value, too much volatility, too much regulations/lack of regulations/bad regulations, lack of social responsibility from the market actors, etc.

In hindsight, it has become clear that only the investors who had the mental clarity to ignore all this noise during the early 2000s were able to catch the 600% move that followed in the Nasdaq.

Diversification saved investors

When we are talking about ignoring noise and riding out the storm, let’s not forget that many of the companies that made up the Nasdaq in the early 2000s did eventually go out of business. Betting everything on a single company, in many cases, ended up being a catastrophe for the investor, despite the fact that the sector as a whole did incredibly well. This really made the benefit of diversification clear to everyone.

We can assume that the same is true for the cryptocurrencies of today. Some will emerge and become hugely successful, while others will slowly but steadily decrease in value and become irrelevant. Which ones they are is extremely difficult to tell at this early stage, but the lesson to be learned is clear: Diversification may be the only free lunch we will ever get in the world.

Featured image from Pixabay.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 33 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Op-Ed

Is Manipulation Behind Bitcoin Cash’s Absurd Rally?

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Although you wouldn’t know it by today’s prices, bitcoin cash (BCH) has topped the crypto market leader board this month. The digital currency more than doubled over the span of 18 days, and in doing so far outpaced the broader market. But a closer examination of the value drivers suggest manipulation could be partly responsible for the rally.

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As a reminder, the author has no vested interest in smearing BCH as I believe it to be one of the more advantageous coins on the market today. That said, the circumstances surrounding the most recent rally are peculiar to say the least.

What’s Up with Bitcoin.com?

A Hacked user informed me earlier this week that Bitcoin.com has been using the “BCH” ticker next to the word “bitcoin”. Normally, the ticker “BTC” is reserved for bitcoin, which is the original blockchain we all know about. Instead, the website quotes “BTC” next to the term “bitcoin core”.

In other words, BCH is quoted next to bitcoin and BTC is referred to as bitcoin core. See here for yourself:

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For most readers of Hacked, the distinction is easily discernible, but for new traders the difference isn’t easily gauged.

The first question I have is, how many people bought bitcoin (BCH) thinking they were receiving actual bitcoin (BTC)?

Bitcoin.com describes itself as the “premier source for everything bitcoin.” Although the website doesn’t appear to offer a full-fledged trading platform, users can purchase bitcoin and bitcoin cash using the following link.

It is unclear how long the website has been referring to BCH as bitcoin. For those of us who’ve been following the market for some time, the way BTC and BCH are quoted is certainly strange.

Antpool

A large cryptocurrency mining group by the name of Antpool has also been accused of pumping BCH in recent weeks. The pool announced about six days ago that it is responsible for confirming more than 8% of all bitcoin cash transactions. In addition to confirming those, Antpool is also said to be burning BCH on a daily basis in order to reduce supply and boost prices.

Of course, crypto pumps do not require such elaborate setups to achieve their goals. Pump-and-dumps can be orchestrated rather easily through a chat group on social media. But Antpool does have a large and privileged position in the BCH ecosystem, which has raised suspicion over its recent actions.

Bitcoin Cash is Overbought, According to Tom Lee

Fundstrat’s Tom Lee recently weighed in on the bitcoin cash phenomenon, concluding that the cryptocurrency was overbought. In his view, investors should stick with bitcoin if they had a choice between Core and Cash.

In a segment on CNBC’s Fast Money, Lee said:

“I prefer not to pick winners and losers when we’re looking at cryptocurrencies like bitcoin/bitcoin Cash… Both have merits but if I was putting new money to work today… I would be a lot more interested in buying a lagger that could attract inflows rather than something that’s potentially overbought.”

Bitcoin cash added around $1,000 to its value between Apr. 6 and 23, with prices peaking near $1,600. The cryptocurrency corrected sharply lower on Wednesday and was still declining as of Thursday’s early-morning session. At the time of writing, BCH/USD was down 4.6% at $1,268.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 452 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Decentralization

JP Morgan’s Surprise Cryptocurrency Fees are a Reminder of Why Decentralization Is Sorely Needed

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JP Morgan Chase & Co has been hit with a class-action lawsuit by cryptocurrency traders over allegations of unannounced fees and higher interest rates on purchases of digital currencies. Though the allegations have not been proven, extra fees are a tactic routinely employed by traditional banking institutions. In the case of JP Morgan, this has karma written all over it given the way its chief executive has ridiculed digital assets by associating them with fraud.

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Class Action Lawsuit

Traders from across the United States are seeking statutory damages of $1 million for unannounced interest charges and fees on cryptocurrency transactions between January and February of this year. The named plaintiff in the lawsuit is Brady Tucker, an Idaho resident who paid a total of $163.91 in fees and surprise interest charges over a six-day stretch.

According to information obtained by Reuters, the lawsuit accuses the bank of violating the U.S. Truth in Lending Act, a piece of legislation that requires credit card issuers to inform customers in writing of any notable change in fees.

The lawsuit asserts that Tucker tried to resolve the dispute by calling Chase’s customer support service directly. His request was turned down, prompting him to seek legal help. According to Bloomberg, the case in question is Tucker v. Chase Bank USA NA, 18-cv-3155, U.S. District Court, Southern District of New York (Manhattan).

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The Growing Case for Decentralization

Depending on who you ask, the allegations against JP Morgan are akin to cryptocurrency fraud not unlike the kind Jamie Dimon talked about while ridiculing bitcoin. But the irony in Dimon’s comments extend far beyond Chase’s latest dealings.

As the actions of Chase bank and other financial institutions have clearly demonstrated over the years, those who control the size and growth rate of fiat money cannot be trusted to do the right thing. As Nassim Taleb argues in The Black Swan, banks have a tendency of losing as much money as they make in the long run due to shady business practices and high-risk ventures. Decisions like these are easy when you are Too Big to Fail.

Decentralization, like the kind advocated by blockchain startups and cryptocurrencies, allows users to trade directly with each other without having to go through a (predatory) middleman. Decentralized systems not only help participants avoid unnecessary fees, red tape and other forms of unwanted intervention, they are virtually impossible to shut down. In this vein, decentralized currencies give people a fighting chance in their battle against never-ending inflation. As we’ve argued before, this is not only a prudent fight, but a noble one as well.

Cryptocurrencies that rely on decentralization offer society a unique value proposition unlike anything we’ve seen in recent history. What’s more, their adoption is not contingent upon us leaving the realm of traditional finance – at least, not yet. That’s because cryptocurrency started off as an obscure and esoteric asset class but has since become a value store for investors. Tomorrow, it will become a viable medium of exchange accepted worldwide.

That said, we are still in the very early days of the crypto revolution and it may be a while still before we can conclusively prove people like Dimon wrong. But crypto backers and investors should take comfort in knowing that big banks rarely lead in disruption these days. They have the resources to play catch-up, which they are clearly doing with blockchain.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 452 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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