[CryptoPunk]

Exciting stuff. Just a heads up that NEO is being marketed as a decentralized platform but its roadmap describes a platform run by Trusted Third Parties, which have to be approved by NEO after proving their identity and proving they have a legal entity backing them.

The NEO team also promotes itself as compliant with regulations (probably to stay on the good side of the authorities in China where it is based). If they want to go down this route, that's their prerogative, but it's downright misleading to describe it as decentralized or even as in the same space as cryptocurrency. It's more like a traditional Fintech company, with greater separation of concerns between users and trusted third parties (e.g. updates to the database are cryptographically validated, with each user controlling their own private keys to authorize updates to their respective account), to provide more transparency and security than closed database models.

I would add Ripple, Stellar and EOS to this class of pseudo-cryptocurrency platforms, that while arguably offering interesting innovations on the centralized server-client architecture, are exploiting the hype around decentralization to raise funds and users for platforms that are not decentralized.

Its centralized consensus model means NEO can afford to place very high resource loads on its nodes (or really, servers), and use traditional programming languages that are not optimized for the decentralized world. This ability to use Java, C# and Python to write programs for it is actually one of its features that is marketed on its website.

[dreit1]

There is nothing misleading about it at all. A delegated system is decentralized, whether it is decentralized enough for you is your decision, but it is misleading to claim otherwise.

Disclosure: NEO fan

[CryptoPunk]

A set of trusted third parties that are pre-approved by a central authority, and are operating in a platform designed to comply with rules created by a central authority (the government), is not decentralized, in any context, let alone in the cryptocurrency context, where the original Bitcoin whitepaper describes a radical consensus algorithm designed specifically to make trusted third parties unnecessary.

You could call it federated, but not decentralized.

[dreit1]

This radical consensus mechanism has led to multiple hostile parties go into a pseudo economic war with each other. These parties are fairly centralized, miners, developers, and business interests, with the users largely standing on the sidelines of all of this.

A decentralized system takes power from one party and moves it to multiple parties. That is the definition of decentralization. A decentralized system is not one that completely does away with trust. That would be a trustless system.

[CryptoPunk]

>>This radical consensus mechanism has led to multiple hostile parties go into a pseudo economic war with each other.

I'm not arguing about the merits of its consensus algorithm or of decentralization. I'm providing context for how the term 'cryptocurrency' originated, and how 'decentralization' was used in this context.

Having a central authority determine who can be a consensus server, and being explicitly designed to put known and trusted third parties in charge to comply with the rules of a central governing authority, is not a decentralized system, especially in the context of cryptocurrency, where the term was used in relation to the absence of trusted third parties.

The economic wars you speak of could put to question whether Bitcoin succeeded in being decentralized, but it doesn't change the fact that NEO and other permissioned blockchains run by pre-approved and known trusted third parties, are definitely not decentralized.

>>A decentralized system takes power from one party and moves it to multiple parties.

But the ultimate power still resides in the hands of one party in NEO, because there is one party acting as a gatekeeper, deciding what can happen on its ledger, and who can run a server.

To call this decentralization, with whaboutisms about problems in the Bitcoin space, that are not even comparable, to justify the characterisation, is disingenuous.

[dreit1]

I don't think that we will be able to convince each other. If you think that everyone needing to run a validating node in a blockchain ecosystem to be decentralized, then NEO certainly won't fit your criteria. I don't subscribe to this definition of decentralization

[CryptoPunk]

You're right that we won't convince each other and that carrying this on isn't a good use of either of our time.

I'll add however that "everyone running a validating node" is not my definition of decentralization. Needing to 1. identify oneself to the NEO Council, 2. be a legal entity and 3. get approval from the NEO Council, to run a fully validating node, is not decentralization according to any meaningful definition of the term.

If federations of trusted third parties are decentralized, then corporations with multiple shareholders are decentralized. Even the Federal Reserve, with its regional banks voted in by the member banks of each respective district, is decentralized, by this loose definition.