NEM (XEM), NEO and EOS Jockeying to Replace Ethereum (ETH)
Ethereum (ETH) brought blockchain technology the first real leap from Satoshi Nakamoto’s vision of Bitcoin with smart contracts and the ERC-20 token. Ethereum makes it possible to not only harvest coins via mining but created applications on the blockchain as we saw with cryptokitties and the Bancor ICO in 2017. NEO, EOS and NEM (XEM) are looking to make the 3rd generation blockchain jump from Ethereum’s network in 2018.
Cryptokitties and Bancor showed that Ethereum, while innovative, is flawed and may lack scalability needed to grow with the spread of blockchain technology. A seemingly innocent cryptokittie nearly brought Ethereum to standstill freezing transactions as the craze grew. With Bancor’s ICO the traffic looking to invest overwhelmed the capacity with similar results. Other companies looking for an ERC-20 ICO took notice and other projects pushed forward to build and improve on the Ethereum project.
The first wave of the next generation blockchain economy brought us financial coins like Ripple (XRP) and Stellar (XLM) rocketing into the top 10 by market cap with promises of revolutionizing cross border payments and legacy banking. Now coins like NEM (XEM), NEO and EOS are looking to make the scaling jump from Ethereum to allow not only smart contracts but decentralized apps (dAPPS), ICOs, exchanges and e-commerce. All three are now in the top 10 by market cap for the first time so which is poised to chase down Ethereum in 2018?
NEM sits at #7 today with market cap of $10 billion and $1.18 per XEM and 24 hour volume of only $100 million or about .01% liquidity. The largest market by far comes from Korea on the newest exchange Upbit. The next big news from NEM is the the Pundi-X ICO which launches on the NEM platform. Interestingly, Pundi-X is a point-of-sale device which accepts crypto currency and is integrated with Stellar (XLM) and many other coins like Bitcoin and Monero.
The true NEM platform still has not launched which means it currently runs on the Ethereum (ETH) technology. The Pundi-X ICO then is actually launching on Ethereum under the guise of NEM. There are plans to move to the NEM platform with the launch of Catapult mid 2018 which should increase transactions-per-second which is the main limiting factor on the Ethereum technology.
EOS was covered here with the recent news of launching a VC firm with the ICO funds raised from EOS tokens. The news was mixed with a run up in price near $20 per EOS on the rumors and a sell-off below $10 on the news. Plans going forward are to launch future projects with airdrops to EOS holders with the first being Everipedia (IQ). $1 billion was committed to the new project known as Block.one. The next big news from EOS and Block.one will be an announced partnership with a VC firm for future investing of ICO funds.
This plan is unique among blockchain companies and may be the first ICO to raise funds for other ICOs. The bigger question is where is the EOS tech and can it unseat Ethereum? Like NEM, EOS runs on the Ethereum ERC-20 token technology until launch of the mainnet. EOS tokens are expected to be upgraded soon with an announced update on January 23 coming. Similar to the Block.one announcement look for a possible price bump ahead of the news.
“China’s Ethereum” missed some of the recent market sell-off and differs from Ethereum through no proof-of-work mining phase. Instead, NEO is fixed at 100 million NEO tokens which earn GAS tokens as the currency for transactions. NEO moved into the top 10 by market cap this week for the first time and now trades at $148 per NEO at $10 billion in market cap. GAS tokens tend to track near 50% of the NEO price and currently trade at $58 and $580 million.
Many have questioned is NEO is a copy of Ethereum much like China is known for counterfeiting technology. At this point it is not running on the ERC-20 token technology and runs its own mainnet which differs from NEM and EOS. The NEO tokens earn interest in the form of GAS and many ICOs are in the pipeline on the network.
Where differs from Ethereum is through control of the network and technology. Ethereum remains open allowing other projects to develop on the platform. At NEO the entire dev team is Chinese with closed development forcing projects interested in launching on the platform to work closely with NEO. This also brings speculation of NEO being a copy or clone of Ethereum sponsored by China giving some pause to invest.
NEM (XEM), EOS or NEO
While NEM (XEM) and EOS still have not launched native mainnets both have wide interest and are closely watched. Both projects expect to launch in early to mid 2018 which should bring big news and widened interest in the projects. The Block.one VC firm from EOS brings another dynamic that could launch EOS ahead of NEM. At the same time NEO is running on its mainnet with multiple ICOs lined up. Which will hard is hard to predict. As 2017 saw the rise of Stellar, (XLM), Ripple (XRP), Cardano (ADA) and other financial focused coins, 2018 could see the launch of distributed smart economy networks.