NEO moves closer to decentralization with consensus node applicants

NEO, the "Chinese Ethereum", is moving ahead with its roadmap to achieve greater decentralization by allowing organizations to run a consensus node on its network. The open-source smart contract platform has attracted a large global following and development community with over 100 dApps deployed to the mainnet.

Now, NEO Global Development has announced plans to accelerate network decentralization through a selection process, and is encouraging organizations to get involved by running consensus nodes on NEO.

What are consensus nodes?

Consensus nodes act as the block validators on a network. They maintain a copy of the blockchain, periodically taking turns to propose or sign agreement on new blocks, and can enforce decisions made by the network such as the setting of transaction fees. They are the foundation of the technology, allowing it to function and survive external attacks.

NEO’s current price around $6 is languishing ~96% from its all-time high of ~$168. In recent months NEO has been in the news for an apparent failed bid to purchase the Bittorrent network, which was eventually sold to direct rival, Tron. This may have created some FUD surrounding the NEO token and partially contributed to bearish momentum.

Currently, there are seven consensus nodes live on the NEO mainnet, of which five are managed by the NEO Foundation. The remaining two are run by Dutch telecoms company KPN, and City of Zion, an independent, global group of developers working on NEO.

NEO network monitor

The NEO network uses the internally designed, delegated byzantine fault tolerance consensus algorithm. The system has its advantages, the network likely has an increased security layer becaused transaction verifiers (in NEO, they are known as bookkeepers) are all permissioned and have incentives aligned.

This means there is a low chance of bad actor block producers popping up on the network.

It does, however, mean NEO loses significant advantages that more public, Proof-of-work blockchains achieve with a more distributed blockchain and higher hash rate. Networks like Bitcoin are able to offer censorship resistance and immutability of transactions, and less governance power between nodes with greater transparency of network activity.

In 2019, NEO will replace four of its own consensus nodes with the nodes of applicants who have passed a screening process and completed a six-month trial on the testnet. This means by the end of 2019, it is possible that each consensus node on the NEO mainnet will be operated by a separate organisation, becoming more decentralized.

Becoming a NEO Consensus node

The NEO foundation’s publication ‘How to Become a NEO Consensus Node‘, outlines how NEO token holders can help govern the platform. As an increasing amount of NEO tokens held by the NEO Foundation are unlocked, they will flow into the market and add to the amount of NEO in circulation.

NEO token holders will also play a greater role in on-chain governance in future as consensus nodes play a vital role and participate in the governance of the NEO protocol.

China investing in blockchain education

In other China news, Ivy League University Cornell, and Tsinghua University, an elite Chinese university, have joined forces to host the International Workshop on Blockchain due to take place in Xi’an, China later this month. Concious of the importance of blockchain technology to the future of commerce the Chinese government has been expanding its own digital currency research centres and furthering education about blockchain through its universities.

The 150-person invitation-only event will include a keynote by Thiel Fellow and Ethereum Co-founder, Vitalik Buterin; Assistant Professor of Economics at the University of Chicago Booth School of Business, Jacob Leshno; and Stanford University Ph.D. student, Ben Fisch.