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@Japh
Created November 19, 2017 09:43
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Responding to this poorly researched piece: https://storeofvalue.github.io/posts/major-neo-redflags/

Rebuttal

“NEO is incredibly centralized. The entire network only has 13 validating nodes. Developers whitelist who can run validating nodes”

All fully synced blockchain wallets are NEO nodes. There are many. However, NEO works on a different kind of consensus mechanism than currencies like Bitcoin (Proof-of-Work) or NAV (Proof-of-Stake), and uses something called dBFT (delegated Byzantine Fault Tolerance). So there are certain nodes in the network that are like “master” nodes called “Consensus Nodes”, and these need to be voted on by the entire network. Plenty of this information is in the NEO docs.

Currently the Consensus Nodes are run by the NEO Council, which was a deliberate decision while the ecosystem got moving, with plans to decentralise the operation of these nodes in Q1 of 2018. Ironically it was in October’s Monthly Report from the NEO Council that plans were announced to do this even earlier than originally planned.

Almost nothing said in the original article is accurate on this topic. The screenshot he posted and the link he posted was to the City of Zion page which is a group of open source developers who do a lot of development and community work around the open source NEO project, and shows a bunch of different servers’ statuses, not exclusively Consensus Nodes.

“NEO’s blockchain disappeared for several hours in October”

This issue was a bad error of timing on the part of the NEO Council performing a scheduled unlock of some locked NEO from the ICO, but happened at the same time as the tokens from the first NEO-based ICO were available to transfer to an exchange for trading.

They made an error with the transfer of funds which because of how dBFT works, pushed the role of Consensus Node from one of the main nodes to an alternate node which happened to be offline.

This is one of the reasons they decided to speed up the schedule of decentralisation of Consensus Nodes.

“NEO’s GitHub has alarmingly sparse activity”

This one has been explained ad-nauseum elsewhere, so I’m not going to bother. But basically, they don’t use GitHub as their primary development tool. Also, NEO is considered an open source project.

“NEO only has 6 smart contracts operating on the entire blockchain”

NEO is still very young in its life-cycle, and this issue is one that’s being actively addressed. In fact, City of Zion have run a dApp development competition with non-trivial prizes that closed only within the last couple of days, so you can expect to see more contracts being deployed.

Also, the price to deploy a contract on the NEO network is higher than on the Ethereum blockchain, partly to help ensure quality. I kind of with Ethereum had something similar in place…

“The East has almost no interest in NEO - 90% of NEO’s volume comes from the West”

Yeah, this is interesting to me. This is basically the only point I’m interested in, would be nice to see more data on this.

Onchain, the company behind the NEO project are a blockchain consulting company who have been working with the Chinese government. It’s not hard to verify this if you speak Chinese, it is harder if you speak English. But the two founders, Da Hongfei and Erik Zhang, are both mentioned in Chinese government papers on blockchain technology.

Having said that, the first ICO run on the NEO network was actually based out of Japan.

Also, the Chinese FUD lately hasn’t helped.

“NEO attracts scammy ICOs and dApps”

AdEx was not “the first project”. Red Pulse (RPX) was the first, and it seems to be going well.

AdEx was originally going to be an ERC20 token on the Ethereum network, and then they said they were planning to add support for the NEO network later, and would accept NEO during their ICO. But as far as I’m aware, they weren’t going to be developing for the NEO network yet, so his super-sleuthing on their GitHub reveals no surprises. Having said that, I wasn’t impressed by AdEx.

Aphelion has been interesting because there are red flags for me there too, and yet of the projects mentioned so far, their devs have been more active than most in interacting with the wider NEO community, which is nice.

“NEO makes announcements of announcements”

I agree with this, they did it just two days ago about an announcement coming on Monday. I think the intention is actually to say “oh hey, watch out for news we plan to announce on Monday”, but it inevitably encourages speculation, which is poor form.

“NEO is a blockchain built purely on promises and rumours. There is no substance.”

As I said earlier, NEO is actually still pretty early in its technological progression. I’m excited by the upcoming decentralisation and the new activity that will likely result from the dApp competition entries. (It’s also my belief that the upcoming NEO announcement tomorrow is about another NEO Council competition.)

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