Why protocols like NEO, ETH, ICON and LSK are strong investments.

Included in the current cryptocurrency industry, the spectrum of existing technologies can be divided into three main categories.

The first is primarily synonymous with digital currency’s first use-case and solves for exchanges of money and stores of value; the second relates to decentralised applications (dApps) built on the blockchain; and the third involves protocol level technologies such as NEO and ETHEREUM on which these applications are built.

With regards to the progression of a new technology, and the way it evolves as it gains mental mindshare, is at the core of Gartner’s Hype Cycle for Emerging Technologies (Gartner is a leading technology research and advisory firm), which displays five common stages of technology.

• Innovation Trigger

• Peak of Inflated Expectations • Trough of Disillusionment

• Slope of Enlightenment

• Plateau of Productivity

First is the Innovation Trigger that brings the technology into the world. While not very visible, just as Bitcoin wasn’t visible in the early years of its life, word spreads and expectations grow. Over time the murmurs gain momentum, building into a crescendo that is Gartner’s second stage, the Peak of Inflated Expectations.

The peak represents the height of confusion around the definition of the original technology, because people often apply it optimistically to everything they see. No technology is a panacea. As companies sprout to life and attempt to transition ideas into reality, shifting from proof-of-concepts to at-scale implementations, it frequently turns out that implementing a new disruptive technology in the wild is much harder than anticipated. The new technology must integrate with many other systems, often requiring a wide-reaching redesign. It also requires retraining of employees and consumers.

These difficulties slowly push the technology into the Trough of Disillusionment, as people lament that this technology will never work or is too difficult to deal with. When enough people have given up, but the loyal keep working in dedication, the technology begins to rise again, this time not with the irrational exuberance of its early years, but instead with a sustained release of improvements and productivity.

Over time the technology matures, ultimately ultimately becoming a steady platform in the Plateau of Productivity that provides a base on which to build other technologies. While it’s hard to predict where blockchain technology currently falls on Gartner’s Hype Cycle (these things are always easier in retrospect), we would posit that Bitcoin is emerging from the Trough of Disillusionment. At the same time, blockchain technology stripped of native assets (private blockchain) is descending from the Peak of Inflated Expectations, which it reached in the summer of 2016 just before The DAO hack occurred.

Cryptoassets beyond bitcoin are at different points between the Innovation Trigger and the Trough of Disillusionment. These differ because they came to life at different points after bitcoin and many are still emerging.

from an investment perspective of short to medium term adoption, I suggest concentrating in technologies that provide the most value to current users of cryptocurrencies like neo and ethereum.

As demonstrated by the aforementioned cycle of adoption, the crypto eco-system is in its early stages of development and thus the community is strongly represented by engineers, blockchain evangelists and technology early adopters. This suggests that the tokens with the strongest immediate demand will relate to infrastructural and architectural innovation because they provide the most utility to developers building the eco-system.

This reflects the third investment category relating to protocol level technologies.

Importantly, as the ecosystem grows protocol currencies stand to profit exponentially compared to application currencies. Protocols can be understood as the underlying infrastructure on which applications are built and stand to profit from any growth in the eco-system. Examples of current protocols in the industry are inclusive to blockchains such as Ethereum, NEO, Stellar, Lisk, QTUM, and ICON amongst many others.

To elaborate briefly on these specific protocols:

NEO: exemplifies interoperability, scalability, and usability, but at the cost of true decentralisation. NEO connects with a host of blockchains within the ecosystem, such as Ontology and Elastos, connecting private enterprise blockchains with public blockchain solutions. They allow for considerable scalability with significant transaction speeds and developing off-chain solutions. NEO and the NEO community focus on developing projects that allow for simple development for businesses and users alike.

EOS: exemplifies usability for both users and developers. With horizontal scaling and an efficient dPoS consensus mechanism, EOS can support hundreds of thousands of transactions per second and intensive applications.

Since the birth of the first smart contract, a large stream of the associated gold-rush migrated towards not DApps, but protocols that could bring us closer to real-world implementation and adoption.

These projects aim to become a better, faster, stronger baseline for real-world use. New blockchain projects such as EOS or Cardano are developing answers and solutions to Ethereum’s current issues. A further key aspect in the analysis process that protocols offer is transitioning from simple smart-contract interoperability, towards seamless sharing of information across blockchains. These agnostic protocols are able to inherently work freely and seamlessly with each other, rather than setting up additional layers of communicativity between different networks. AION, ICON, and WanChain notably are projects that recently established the “blockchain interoperability alliance,” dedicating research and resources towards setting a standard of interoperability for emerging blockchain networks.

I personally believe that NEO will far outperform ETH due to the following reasons;

Digital Identity, Smart Contracts, Digital assets: Digital identity, Smart Contracts, Digital Assets are all indispensable elements of NEO smart economy. Baymax shares consensus with these underlying foundations and is willing to facilitate a wider use of digital identity, create more robust smart contracts, and further innovate digital asset applications within the Data exchange market, Intellectual property trading market, and social media market for the NEO ecosystem.

• Scalability and speed: It’s no secret that blockchains suffer from scalability issues. As cryptocurrencies and blockchain technologies become more widely adopted, the number of transactions requested per second is increasing dramatically causing transaction processing times to slow down. Bitcoin has a painfully slow transaction time of between 3.3 and 7 transactions per second, while Ethereum saw a huge backlog of transactions when the Cryptokitty craze swept through it early in December 2017. Trinity, the Lightning Network, and the Raiden Network are changing this. Like the Lightning Network for the Bitcoin blockchain and the Raiden Network for the Ethereum blockchain, Trinity aims to address scalability issues on the NEO blockchain by employing state channel technology. Simply put, state channel technology allows for transactions to be made off-chain via a multisignature agreement or smart contract. Multiple transactions can be made within these off-chain agreements meaning exceptionally fast processing and cheap transaction fees as opposed to each transaction being made directly on-chain. Only when all the conditions of all the transactions have been fulfilled does the transaction chain move onto the appropriate blockchain. By employing state channel technology on the NEO blockchain, Trinity will be able to address some of the main limitations of blockchain technology: scalability and privacy.

• Multiple programming languages: The NeoContract smart contract system is the biggest feature of the seamless integration of the existing developer ecosystem. Developers do not need to learn a new programming language, but can use C#, Java and other mainstream programming languages in their familiar IDE environments (Visual Studio, Eclipse, etc.) for smart contract development, debugging and compilation. NEO's Universal Lightweight Virtual Machine, NeoVM, has the advantages of high certainty, high concurrency, and high scalability. The NeoContract smart contract system will allow millions of developers around the world to quickly carry out the development of smart contracts.

• Delegated Byzantine Fault Tolerance (dBFT) All blockchain platforms rely on consensus to prove that all transactions are valid. Bitcoin and many other projects (including Ethereum currently) use Proof of Work (PoW) methods, which basically require expending a lot of energy to solve complex mathematical problems. Another common method is Proof of Stake (PoS). With this method, blockchain nodes are required to “stake” or allocate funds (denominated in the currency being used) to earn verification rewards. The big benefit of PoS, compared to PoW, is that much less energy is expended. It is more eco-friendly. NEO utilizes a different consensus method called Delegated Byzantine Fault Tolerance (dBFT). You can read all about the mechanics of dBFD here, but the biggest benefit of that system is that it prevents code splits/forks. This is a huge plus, as we have all seen the controversy and drama associated with the numerous Bitcoin (and Ethereum) forks. This will lead to greater stability of the NEO platform.