A Response to Investor Warning: Major NEO Redflags - NEO FUD

in #neo7 years ago (edited)

Disclaimer:
I’m heavily invested in NEO, and have a project based on NEO blockchain o3 - A NEO wallet app for iOS

I’d like to take the time out to respond Investor Warning: Major NEO Redflags. I consider this to article to be the embodiment of FUD, as the author does not do due diligence and has a clear, undisclosed conflict of interest on the subject that he is writing on.

So let’s go through the points.

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

The first point starts off with a factual error. The author points to the NEO network monitor for the 13 consensus nodes, but the funny thing is these aren’t the consensus nodes. Although these are constantly syncing they are not participating in the consensus process, but merely acting as peers in the distributed network.

We’re running two of them ourselves at

node1.o3.network:10332
node2.o3.network:10332

Here’s a conversation that further illustrates the point.

Yes the NEO foundation is currently running the consensus nodes. Anyone who has done any due diligence will concede that point. However there is a proposal to move away from that.

Read the section Decentralization of Consensus Nodes listed here

NEO Smart economy

So from the beginning the author has committed factual errors on what the NEO network is and what it isn’t.

They then states

The whole point of cryptocurrencies is a decentralized validation system where anyone can operate nodes and validate transactions in the network.

I’m not sure what makes him the authority on what a cryptocurrency is and what a cryptocurrency isn’t. The point of NEO is to obtain voting rights and receive GAS that is generated/distributed on the NEO network. The point of GAS is to pay for contracts and transactions on the NEO blockchain.

Furthermore, I believe that distributed systems are bound to become semi-centralized over time. Think about the gold standard of decentralized cryptocurrencies; Bitcoin. People already complain about mining centralization, development centralization, and exchange centralization. If we are to accept that this will be the end result of a blockchain cryptocurrency ecosystem, then there are technical tradeoffs that we can make to achieve things like faster transaction speeds, which is exactly what NEO does. So no, YOU may think that the point of a cryptocurrency, but running a validation node is not the end all of cryptocurrencies. In fact you probably know yourself that the majority of bitcoin users do not run validation nodes.

So while you can make some good points about the centralization of NEO, claiming that using dBFT as a consensus mechanism, which inherently limits the amount of consensus nodes, defeats the purpose of a cryptocurrency is merely an opinion.

NEO’s blockchain disappeared for several hours in October

Valid point. It should have been better communicated to users in the ecosystem. I’ve personally been affected by this lack of communication when RPC end points change without me knowing. However, I’m ok with the network going on standby to reduce the risk of losing half a billion dollars.

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

Frankly, this point is just stupid. If the protocol is good it will gain adoption based on the technology, not on the trading volume. Using trading volume as a reason to bash a project is shortsighted thinking at best, and at worst….I’ll restrain myself. If the currency has volume and the network is being used, I don’t care if its happening in Antarctica. The whole Ethereum of China thing was never propagated by NEO or CoZ devs anyway, I think anyone that is serious about NEO would be ecstatic if this label was dropped.

NEO is not the Ethereum of China

NEO is NEO which is a beast in its own right

NEO attracts scammy ICOs and dApps

Yes NEO is an open source project, which means that anyone can choose to build on the platform. If amount of scammy ICO’s was somehow a negative indicator of the project than Ethereum should be worth nothing right? I don’t know much about Adex, but as for Aphelion there were plenty of posts about the potential risks of investing in Aphelion, which you even stated yourself in your article. Most people that posted about Aphelion on the NEO subreddit got down voted into oblivion. Whether or not they will be successful remains to be seen. It is not the place of the NEO foundation to comment on projects that they are completely uninvolved in, as this would be unprofessional behavior.

I do not consider an ad hominem attack on an open source project a valid argument.

NEO makes announcements of announcements

Usually not a fan of this, but the NEO foundation is very restrained about what they choose to announce. Whether or not this was a good move or not remains to be seen, depends how juicy the announcement is.

Before I move on to the last point I want to address the obvious conflict of interest in this article.

It’s been stated in their twitter that the author is a holder of QTUM

StoreOfValue Blog on Twitter: “@nondualistic I personally think that $BCH is going to win, but not putting my money in it at these prices. Just sticking w/ ol reliable $ETH and $QTUM.”

and he has previously made articles shitting on NEO

NEO vs QTUM: An Objective Comparison

My response to this is fine, feel free to shit on any currency as you see fit, but at least have the decency to acknowledge you have a financial conflict of interest on the subject matter.

Finally

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

Really?
I’m collecting GAS every day.
I’m querying RPC nodes every day.
I’m running and maintaining nodes.
I’ve seen contracts deployed by a growing open source community.
And I’ve invoked those smart contracts.

NEO Transactions Per Day (A conservative estimate)
(5 per block) * (20 sec block) = 21600 transactions per day

Everything seems to be working to me.

If you’re a NEO fan, please help show your support by signing this petition.
Petition · Apple: Allow The O3 Wallet Back On the App Store · Change.org

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Completely agree. Well put.

My original comments were as follows to the original article:

  1. With time be good to see more nodes, agree there should be more than 13. When I thought about this more the blockchain is still backed by all users of the NEO wallet.
  2. No issues with the unlocking. Seems like the unlocking would have been independent of number of nodes but only NEO can confirm this
  3. NEO is Chinese based and English is not their mother tongue and some appreciation should be given to this
  4. The smart contracts appear to be for the ICO's and I am not entirely sure what the agency contracts are. This will grow with more ICOs. Worth noting China had an ICO ban.
  5. NEO is looking to list on Korean exchanges soon (rumours)
  6. NEO works across multiple coding languages. ADEx has had some prototype testing recently. I dont know much about it but would not go as far to call it a scam. Bitconnect to me is a scam and worthy of that term
  7. Announcements are what we need. We need communication from the development teams. How else are we supposed to know what is going on?

well said. to sum it all up, there's always two sides to the coin. im v sure neo thought of all of these to allow 13 nodes at the start. so not to worry, its just temp. all the best guys

Great article

Exactly!

If NEO (+-15k to start a project there) attracts scammy ICOs, what would that guy say about Ethereum (20 bucks will get you started)?

In all honesty, the developer did thank AMERICA in his boxmining interview... and to be honest, its not very talked about here in China, other than the rumors from several months ago when neo originally broke 50$. Heh... I like neo.. made me lots of K's of cash on that initial pump, but i am skeptical on it now...

Prior to the past 48 hours where everything jumped, NEO has been hovering around 30k transactions per day. I have a chart that displays this here: http://explorer.neoverse.io

Ah I was looking for a source with the explicit number, decided to play it safe with a low estimate based on block time and transactions per block. Thanks!

So why the jump in transactions?

Nice post

Well, Well............... It's finally nice to see someone with knowledge of NEO to truthfully come out and silence the QTUM hodlers. The division between QTUM hodlers and NEO are mind blowing to me. You don't have to be 1 or the other, invest, trade both. Darned it to all things high and mighty. I see more FUD over new from QTUM community, it's unbelievable, and use NEO people don't give a hoot about even talking about the other coin.

For anybody that wants to get a broader/bigger picture of the NEO infrastructure, should read this. Very good read explaining Onchain, NEO & DNA. https://hackernoon.com/neo-onchain-and-its-ultimate-plan-dna-4c33e9b6bfaa

Thanks for the time you took to write this, I learned a few things I didn't know. Appreciate it mate.

I don't think the original article was a good reflection of QTUM team or community. They're doing some interesting stuff over there at the technical level.

QTUM and NEO were both great ICOs... happy i got in on QTUM.. missed on NEO... but made enough when it pumped to nt worry about getting in at the ICO level.

@saltyskip - nice post and thanks for providing some information for those that might be thinking the same as you but not have the technical knowledge or ability to articulate it as well as you have.

Upvoted, followed you and resteemed!

Thanks again!

Thanks! Glad you enjoyed the article

Great post, but what do you think about the rumors that china will unban icos and they would have to use the neo platform.

Rumors are generally very untrustworthy in the cryptocurrency space. Only believe facts

Very informative post. I don't know much about NEO. That's one of the top 10 coin I know the least about. I really need to learn more about it.

I'm glad you are choosing to post here on Steem. I found your post through reddit/cryptocurrency

I'm following you now and I hope you'll comeback to post more on this exciting coin that is NEO.