Thoughts on NEO: Part Deux

Note: These are my opinions and should not be taken as investment advice. Crypto is an extremely volatile space. Be wise and don’t risk what you can’t afford to lose. Really.

It’s been a while since my first post. At the time, Antshares had just launched their rebrand. The price was around $7 and I was ticked off. Despite my frustration, I held my full NEO position and supported the NEO ecosystem. That post is still read close to 500 times per week. No idea why. Given the switch to the r/NEO subreddit, it remains the highest upvoted post on the original Antshares sub. My rant is preserved for future generations. My grandma would be so proud…

Along with my frustration, I expressed hope. There are a handful of reasons I was bullish on Antshares back then, and why I remain bullish today. Given recent events, I thought it might be helpful to outline some of those reasons. None of this is “new news” to anyone that frequents NEO forums, but, perhaps for my own benefit, I’d like to spell them out here.

I love Da. His AMA was nearly flawless in both tone and content. That’s not easy to do. Being an entrepreneur requires a certain ability to instill confidence in investors and core stakeholders (e.g. employees, customers, etc.). He’s got it. Even his response to the recent China ICO news was perfect. Calm, slightly humorous, supremely confident. He doesn’t play scared and I love that.

I love the vision. For those of us that have been around for a while, we remember that Antshares didn’t start as a smart contract platform. It started as an asset digitization platform. I love this vision because it has obvious, immediate use cases and it lends itself well to government cooperation. On that last point, the vision from the very beginning was to play nice with regulators. As someone that has some experience in the world of China and regulation, they couldn’t have been more spot-on in their approach.

There’s been quite a bit of chatter recently about how incorporating outside of China (e.g. Singapore, Switzerland) is somehow a way of going around the Chinese government. Not a chance in hell. Zero. If you don’t play nice with the Chinese government, you’re toast within her borders. Da knows this. Other projects don’t.

(And yes, I know NEO does smart contracts. Leave it to the Chinese to try and do everything — see my next section. I still like the original vision best. Smart contracts is a nice bonus.)

China likes China. This point has been made ad nauseum in public forums and in my personal crypto circles. Indulge me for a second.

A few years back I took a business trip to China and visited a number of large tech companies — both Chinese companies and their (usually struggling) American counterparts. We visited Uber’s HQ in Beijing. They mentioned, casually, that they were burning $1B US per month in the country. $1B per month. Let that sink in. Next we visited DiDi, the homegrown Chinese competitor. Similar cash burn, completely different vibe. Replace the pretentious black granite of Uber’s HQ with bright colors and anthropomorphic car toys. DiDi wasn’t just attacking the taxi market, they were attacking the entire transportation sector. In typical Chinese fashion, DiDi wanted to do everything even remotely close to their core mission.

After walking through a few of DiDi’s floors filled with veritable armies of developers cranking 9–9–6 and listening to our translators tell us that they only use DiDi, my colleague whispered in my ear: “Uber’s screwed.” His language was a bit more crass. He was right. Uber eventually “merged” with (lost to) DiDi in China. No amount of money could compensate for simply not “getting” the Chinese market.

History repeats itself and, at this point, the track record of American business failures in China is well established. Just do a quick search for “China’s Amazon”…or “Facebook”…or “Google”…or “Ebay”…or anything. Why has this happened? Understanding the unique Chinese market is certainly a huge part. That being said, government intervention is an equally important factor. The Chinese government doesn’t screw around. They like to control their economy and they do so with an iron fist. Play nice with Chinese regulators or be damned.

I won’t continue to belabor this point. If you’ve read this far you don’t need me to draw the obvious conclusion regarding NEO. Needless to say, I don’t believe for a split second that a Western made and controlled technology will dominate the Chinese crypto space. A huge part of being a good investor is judgement and pattern recognition. The pattern here is undeniable. Could I be wrong? Absolutely. But the evidence is on my side.

4. First! Antshares / NEO is China’s first significant public block chain. No matter what happens, 100 years from now when our children are using tokens to buy their iPhone 86's on Mars, Antshares/NEO will still be China’s first crypto. Normally I wouldn’t care this much about first-mover advantage — but look at Bitcoin. The tech used on the Bitcoin network is, at this point, horribly outdated. It needlessly wastes exorbitant amounts of energy. Far better solutions exist. But here we are. Bitcoin’s price is crazy high and will remain so, in my opinion, for as long as crypto is a thing. The network effect is, at this point, far too difficult to unhinge. Bitcoin has become the “flight to safety” for the crypto world and that faith and network effect isn’t going away. I believe NEO has a chance of developing a similar, albeit regional, dominance as Chinese regulators realize the control they’re forfeiting by allowing Bitcoin/Ethereum to thrive in their country. (Evidence: I’m pretty sure Facebook and Google are both still blocked in China.)

I’m tired of typing. The moral of this story is, I still like NEO. Time to sprint through the finish with some questions…

Questions

I posted an email address after my last post (neochain3@gmail.com) and received tons of questions. I tried to answer most if not all of them. Here are some preemptive answers:

Have you sold any NEO?

Absolutely. I took out my principal. If you invest in something — anything — and it 20x’s in value, you’re an idiot if you don’t take out your principal. Sorry. Taking out the small amount you put in will do effectively nothing to your total returns. The peace of mind is worth it, not to mention, from a portfolio theory perspective, it’s the smart thing to do. I still own a ton of NEO — the vast majority of what I purchased originally — but yes, I’ve sold a little.

What do you think about the subreddit now?

Got lots of hate for taking the subreddit to the woodshed last time. I still kind of hate it. I don’t spend a ton of time there. It has gotten better. I just get easily annoyed by insecure 14-year-olds trying, and failing, to subtly (and not so subtly: Hodl!) manipulate people into not selling. Just a quick tip — it doesn’t matter. It doesn’t matter to the price one bit if a bunch of kids with 10 NEO decide to liquidate their holdings. I’m not trying to be a jerk here — it’s the truth. There are lots of people out there making moves in terms of 1,000 NEO or more, and those folks (at least the folks I know) aren’t being swayed in the slightest by poorly worded Reddit posts. This applies to pretty much every coin of significant scale.

Da called you out on Twitter. Did he give you a reward?

He did! Well, someone did. I forgot about it for a while and checked the account recently to find 100 NEO. My plan was to give that back to the community for quality posts / projects. That’s still the plan.

Shoot me an email if you see something awesome that you think deserves some free NEO.

What other stuff are you investing in?

US equity ETFs, municipal bonds, large-cap dividend stocks with mid-range yields and steady growth, and some riskless stuff (CDs, treasuries, high-yield savings accounts). But that’s not what you wanted to hear…

I hate giving “picks” in crypto because of the insane volatility and the real chance of losing 80% of your value over night. Some advice: Be careful. Don’t put in more than you can lose. Don’t listen to what people say in forums. Read source material for yourself. Take out your principal and play with house money. You won’t regret it.

Specific stuff? I don’t think Bitcoin is going anywhere. It is, however, becoming harder and harder to realize large upside returns from Bitcoin — the current market cap is just too big to see massive percentage swings. But that’s OK. I think everyone should have some money in Bitcoin. It’s seemingly immortal given what it’s been through. The same goes for Eth.

Looking at the top 100 coins, there are a few in there I’m holding. The vast majority are legitimately absurd. There are many painfully obvious trash coins that are worth hundreds of millions. I’m not naming names, but please do your research people. And stop listening to 14-year-olds on Reddit.

One coin I’ll mention, because they have a fair ICO process that hasn’t happened yet and I like their vision, is a coin out of Korea called ICON. Not sure how the regulatory environment is shaking out in Korea but I’m watching that one very closely. They may be the first major Korean-born crypto to hit exchanges. I’m also really interested to see what happens with Filecoin once they launch.

Now it’s your turn. What ICO’s / young coins do you like?

Is that your real name?

Nope.

Do you still have the same gripes about NEO?

Lots of them, yes. But not all. Didn’t want to dwell on the negative here. Overall, I’m still more excited than concerned. I won’t be selling any more NEO. But while we’re on the topic: Da — hire some damn developers. You have more community managers on your website than developers. And toss the community a bone occasionally. We want to hear how things are going.

Alright that’s it! Hopefully someone reads this ramble. Happy to take questions in the comments. Attaching my address in case Da or anyone else wants to give me free money again. I like free money. But you should probably sell 1 NEO and treat yourself to a movie or something instead. I’ll be OK. AUGHphJGnvZP7vS2WJ6gePbcCk69xa2qk1