NEO, formerly known as Antshares, is a very ambitious infrastructure project designed to do everything that Ethereum does, but faster and better. It is one of the older alternative cryptocurrencies, but it is also a very forward-looking one, making plans for all kinds of future innovation like a fully digital economy and quantum computing. In general, this makes for a more long-term type of investment than most other cryptocurrencies, and long-term NEO price predictions can be hard to make. This year could be a very positive one for NEO, but it is also facing a number of headwinds. In this article, we outline some of the reasons for our NEO coin price prediction.
It is not without reason that NEO has been called “the Chinese Ethereum”, as it is effectively just that. However, while the two cryptocurrencies share similar capabilities, Ethereum is focused on how to solve current problems using blockchain technologies, while NEO has already started working on solving future ones. It has a number of advanced technology features that make it attractive.
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Some of those are still useful today, such as its flexible virtual machine that can accept code written in all of the major programming languages, while others address things that are still, if just barely, the realm of science fiction like resistance to quantum decryption algorithms.
In general, it is those futuristic concerns that primarily drive NEO’s developers, as they are focused on making NEO the foundation for an economy of the future. They’ve even abandoned the traditional cryptocurrency proof-of-work and proof-of-stake validation algorithms in favor of a delegated Byzantine fault tolerance algorithm, which is optimized to reduce the network’s vulnerability to bad actors while also increasing its scalability in terms of transaction speed.
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The projected transaction rate for the network is up to 10,000 transactions per second, compared to the 10-20 transactions per second on the Bitcoin and Ethereum networks. For applications that need these features, the NEO network can be a perfect platform, but those are currently concerns for only a minority of developers.
However, as network speed and other issues become more common, we expect developers to start moving to NEO and other more advanced blockchains. But all signs point to the fact that that is not likely to happen for at least a few years, which means that our Neo price predictions show it relatively stable throughout the rest of the year, fluctuating in the $30 to $150 range as it tracks the rest of the crypto market.
NEO is theoretically very capable when it comes to supporting distributed applications and other blockchain-based solutions, especially when it comes to the high-end features mentioned in the last point. In practice, however, it does not have an entirely flawless record when it comes to meeting those expectations.
In particular, there have been issues with network instability or slowdowns during a large volume of transactions – something that shouldn’t be happening if the network is as scalable as NEO’s developers claim. This, together with the rather high costs to set up an application on their network – thousands of dollars at current token prices – has caused many potential developers to stick with the more stable Ethereum platform.
Of course, as NEO matures, addresses its network issues, reduces costs, and starts attracting more users, this will change. But all of those things are unlikely to happen over the course of 2018, supporting our previous NEO price predictions. However, should a major application roll out successfully on the NEO network, it will receive a big boost and could spike to up to double its current value. Similarly, a widely-publicised failure on the network could cost the token 20 to 50% of its value.
Two of the major strengths of cryptocurrencies and the applications that run on them are decentralization and freedom from government interference. While NEO employs some pretty cutting-edge technology and has a strong collection of partners, it suffers on those two fronts.
Its validation algorithms are fairly centralized, with the inner circle of NEO developers having essentially full control over all of the nodes that determine which block is selected for inclusion on to the chain.
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Similarly, the NEO algorithm does not allow forking, and software changes can effectively be made unilaterally by the developers. This allows quick improvements and enables the network’s fast transactions speeds, but it does come at a cost of security for the network, both from outside attackers and from the NEO developers themselves and their partners.
That last point is of particular concern, as the Chinese government is one of those partners. Given China’s track record of internet censorship and autocratic nature, it is easy to imagine them using their influence with NEO for nefarious purposes against people using NEO applications.
The close ties to the Chinese government also complicate NEO’s future due to China’s rather complicated relationship with cryptocurrency in general. Cryptocurrency is heavily restricted in most of China outside of Hong Kong, though the Chinese government has both partnered up with several blockchain firms, including NEO, as well as worked on a number of cryptocurrency projects of its own.
NEO remains in their good graces for now, but a change in policy could significantly harm the cryptocurrency, as most of its users and applications remain in the Chinese market. Our NEO price predictions show that a more relaxed policy can rally the currency up to 50% or so, while further Chinese crypto restrictions could send it tumbling down to as low as $15.
While the crypto market as a whole experienced a downturn throughout early and mid-April, by the end of that month things were on the upswing again. NEO, however, has a relatively slow recovery. While some experts were making NEO price predictions showing that it would catch up, its recovery remained sluggish until the next downturn in mid-May.
This generally suggests that NEO’s fundamentals may not be as sound as its performance throughout January and February may have suggested. If it keeps on experiencing slow recoveries from market corrections, this could be pointing to a long-term downward trend, with the currency down to as low as $20 by the end of the year. However, updates to their infrastructure or major new projects could reverse this slow decline.
In general, NEO is a cryptocurrency that may be ahead of its time in many ways. It is incorporating technologies meant to address issues that don’t yet exist and a traffic volume that may be years away. It is also attempting to get ahead of potential heavy-handed Chinese regulations on cryptocurrency by closely working with the government and creating a centralized structure that may be more amenable to the needs of that government than the network’s users.
All of this positions NEO for very strong success in the future: if it is the only cryptocurrency invulnerable to hackers with quantum computers or the sole purveyor of smart contracts in China, it will be a big success. Unfortunately, the conditions that it could thrive in have not arrived yet, and our NEO price predictions show a slow but steady decline until that changes. Do you think NEO has what it takes to succeed? Tell us about it.
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