Thread by @seaside_crypto

#NEO gave an update to the decentralization process today. The long awaited process of making NEO politically decentralized (it is geographically decentralized already) will finally speed up in the next months.
If you missed the blog post, here is the link
neo.org/blog/details/4…

But what does that mean for #NEO?
First, NEO isn't the average PoW- or PoS-blockchain, NEO utilizes dBFT consensus which comes with several advantages but also some downsides. You can read about it here:

docs.neo.org/en-us/basic/co…

One significant downside to this model is that you have to trust most (66%) of the consensus nodes to not be bad players (its nearly the same for PoW and PoS, isn't it?)
Consensus nodes aren't competing for consensus, they're cooperating. This leads to one significant advantage:

- NEO has same block finality and won't fork.
This advantage is crucial. Financial and economic usecases of #blockchain need fast finality for a smooth experience.

Since at first only 7 nodes are involved in consensus you have to be careful who to trust with a consensus node.

The system would work fine with 2 bad-player consensus nodes right now, but it would stop finding consensus if there were 3 bad nodes.
To manipulate blockchain data, the bad players would have to own >66% of consensus nodes (5 nodes right now, which is highly unlikely)

Consensus nodes are being voted by #NEO holders. Right now, the NEO Foundation holds around 35 million NEO, which is a significant stack. They're using their influence to check potential consensus nodes and to vote them in, if needed (like KPN and CoZ node).

With coming voting feature even for Lightwallets like NEON or O3 the average #NEO holder will be capable of voting too (That feature should be already implemented in NEO GUI, afaik).
Since 65M NEO are in circulation those holders will gain a significant influence on NEO chain.

They'll be able to vote in nodes that charge fees for TXs or nodes who make them free. Also they'll be able to decide who to trust with consensus on #NEO.

NEO will have more than 7 consensus nodes in the future so more and more entities will be able to get hands on NEO consensus

So in the end many entities will compete over the NEO holders votes which makes NEO really politically decentralized.

But why does it take so long? Because dBFT is vulnerable at first but becomes very resistant to attacks with every new node.

@NEO_Blockchain and @neoerikzhang are taking it slow to make it right.

And if you're a holder you better want them to make things right, i guess.