July 26, 2020

Is NEO A Good Investment?

Previously known as AntShares, NEO was once the biggest competitor to Ethereum when it comes to smart contracts. It was often dubbed as the “Chinese Ethereum”. However, the spotlight around NEO has been diminishing in the past few years. Since the beginning of crypto winter in 2018 until today, NEO kept going down. NEO tries to keep its hope alive by quietly developing NEO 3.0, which would fundamentally change NEO forever.

However, one very important question remains. Is NEO a good and worthy investment? Should you invest your money in it? Well, this article tries to explain exactly that.Anyway, you should know the technical basics of smart contracts, if you want to learn about NEO, as it’s the main selling point of this cryptocurrency.

To learn more about smart contracts, click here.

The Basics Of NEO

The basic idea of NEO is similar to Ethereum. It is intended to build smart contracts and create tokens on top of its own public blockchain network. Back in 2017, NEO was the second best smart contract platform after Ethereum itself. Some ICOs didn’t have any problem building their ICO tokens on NEO in the form of NEP-5. 

Despite its similarities to Ethereum, there are also fundamental differences. NEO does not use the usual Proof-of-Work (PoW) algorithm nor Proof-of-Stake (PoS). Instead, it utilizes dBFT (delegated Byzantine Fault Tolerance) that has inspired plenty of newer blockchain platforms, including Binance Chain.NEO also adopts a dual token model system, where NEO is the governance token while NeoGAS is the utility token. By hodl-ing NEO, you are eligible to receive NeoGAS as your reward.

NeoGAS itself is used to pay for transaction or gas fees for each NEP-5 token transfer in the NEO ecosystem.NEO is able to process (more or less) 1,000 transactions per second. Back then in 2017, this kind of TPS capabilities was seen as something groundbreaking, as most blockchain platforms struggle to achieve the same feat.

So, Is It A Good Idea To Invest In NEO?

If you ask me this question back in mid-2017, I would say yes. At the time, NEO was very promising and it stole plenty of headlines in crypto publication websites. However, things change very rapidly in the crypto space. NEO has not been relevant in the past few years, after the death of ICOs.

Trends come and go, people have moved on to IEO and then DeFi, but NEO is still not able to capture any of these markets. Ethereum’s biggest competitors in terms of token issuance now are Tron, Binance Chain, and there’s also a lot of hype about Cardano.NEO team itself has been focusing its attention on Neo 3.0 development, which would fundamentally help NEO to become much more scalable and fundamentally better than its current state.

There has been plenty of developments going on but it doesn’t feel that NEO has a big chance to compete against bigger blockchain players as long as they fail to recapture some markets in the smart contract competition.At the end of the day, NEO is known to be a token issuance platform, and it’s known to be the “Chinese Ethereum.” In order to stay relevant in the smart contract industry, NEO needs to keep up with the trend and expand its user base by introducing and attracting its own DApps.

I still remember how they used to have this big team called CityofZion that manages Neon wallet. Members of CoZ also had various different NEO-based projects going on but none of them could become mainstream.


NEO has good technical fundamentals but it has been slowly going down when it comes to relevance and user base. NEO still has a lot of potential but it doesn’t look like the core team understands what is needed to be done in order to truly compete with Ethereum and other smart contract platforms. For me, NEO can provide a good short-term ROI, but it is not that good when it comes to longer-term investment.

However, Neo 3.0 might change how things shape up in the future. Let’s see what happens.If you are interested to learn about smart contracts, you can check out this link.