NEO (formerly Antshares), the cryptocurrency with the sixth largest market cap at press time, and the only cryptocurrency to recieve an A-tier Weiss Rating, went down yesterday when a single validator node disconnected from the network temporarily.
Manager: “There’s a Pending Patch”
Malcolm Lerider, senior R&D Manager for the NEO project, Had this to say on the matter via their community Discord:
So, the consensus algorithm NEO uses relies on every node involved in the process remaining online at all times during the validation process. If a node goes offline for any reason, the 8 billion dollars invested in its cryptosystem is locked up until every validator node is restarted.
Put simply, this means that the project (at present) is the antithesis of a fault-tolerant distributed system and that an attacker would only need to gain control of a single validator to deadlock or otherwise disrupt the network.
This dynamic is also problematic for those wanting to use NEO’s smart contract system, as execution of its contracts relies on the validator nodes, of which only 7 exist, to all function without any errors in perpetuity.
Note that NEO is not, in fact, a PoW or PoS cryptosystem, but relies on its own validation process, in much the same way Ripple does. Currently its validator nodes are all run by the NEO project. There is a voting mechanism for changing the validator node set, which could cause further issues if one is ever voted into the control of a bad actor.
For those that aren’t familiar with the idea of trustlessness or network fault tolerance, this means that NEO’s the complete antithesis of traditional cryptocurrencies in terms of how resilient the protocol is to attack or node outages.
For example, bitcoin requires 51 percent of miners to collude to break network functionality, and nodes going on and offline is a regular, expected occurrence. NEO, on the otherhand, only requires one temporary hiccup on one node for the entire, multi-billion dollar network to fail. This means that this particular network is one of the most fragile and insecure in the entire cryptocurrency space, at least at present.
What’s your take? Do you think NEO’s got serious problems on their hands, or can their woes be overcome? Sound off in the comments below.
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