Decred (DCR): What is it?

Decred (DCR) is a cryptocurrency that offers decentralized governance, which means that decisions are made on the blockchain. To achieve autonomous cryptocurrency, miners and holders of the currency will vote on and enact improvements directly.

For these decentralizing goals, Decred (DCR) makes some significant changes to the Bitcoin protocol on which it is based.

Decred (DCR): Its Origins

Decred (DCR) was developed by many of the same developers who assisted in the development of Bitcoin, the grandfather of all cryptocurrencies.

It was suggested during the Bitcointalk forum back in April 2013 that there be a cryptocurrency called Memcoin2. A user named tacotime suggested the creation of a new cryptocurrency. Two more users supported the idea on the forum. It was “_ingsoc” and Jake Yocom-Piatt.

To achieve consensus for Memcoin2, the three individuals developed a hybrid Proof-of-Work (PoW) and Proof-of-Stake (PoS) approach. Decred was created as a result of this snowball effect. Consequently, the BTCsuite codebase was based on the Bitcoin codebase and produced a highly secure PoW/PoS hybrid consensus.

Rather than a fork of Bitcoin, Decred is its blockchain and cryptocurrency. December 2014 marked the official beginning of Decred’s development. The mainnet went live in February 2016.

Exactly what is a decred coin?

This cryptocurrency that uses Ethereum technology and underlying Bitcoin and blockchain technology is called Decred coin (DCR). Since its launch on February 8, 2016, Decred has been traded on various cryptocurrency exchanges – though, notably, not on Coinbase. 

Coinbase is the world’s most popular (and used) crypto exchange, but a lack of support for decred shouldn’t necessarily indicate the coin is not legit. Decredcoin can be purchased on Binance, CoinEx, and Bittrex, among others.

The Decred coin is also positioned as an e-commerce payment method. e-commerce sites that accept decred coin can integrate it with Coingate and Globee payment processors. 

It may be useful for decred coin to gain visibility by making payments using decred coin. Undoubtedly, decred coin is not nearly as well-known as bitcoin, ethereum, or even dogecoin.

In the top 100 cryptocurrency charts by trading volume, decred has consistently fallen into the bottom 20% or lower, according to Coinmarketcap. Most crypto observers believe that this has more to do with the decred coin’s relatively low profile as compared to ethereum and bitcoin, than a sign of its value.

In what ways does Decred strive to solve problems?

Despite Being Early Bitcoin Adopters, Decred’s developers noticed that Bitcoin operated inefficiently. The largest mining companies hold a large amount of power over Bitcoin’s improvement process as mining operations become more centralized. Furthermore, while some Bitcoin updates can be implemented via a soft fork, most improvements that affect the Bitcoin system in a significant way must be implemented through a hard fork.

 The Bitcoin blockchain went through this process in 2017 with the SegWit2x hard fork. Discussions about the network’s future raged, and members were in upheaval. Hard forks are not supported by miners, institutional users, or exchanges, so they are called off. It is counterproductive for decentralized companies to have the power to control improvements to the blockchain.

Independent factions can also fork the Bitcoin open-source blockchain if the community doesn’t agree. This has already been seen with Bitcoin Diamond, Gold, and Cash. When consensus can’t be reached about an improvement, these offshoots continue to harm the Bitcoin community.

Creded is aimed at reducing or eliminating hard forks, especially those that cause polarization. Decred is capable of hard forking, and it even recently managed its first entirely user-driven hard fork, but the project’s voting mechanism means its changes can be voted on before they are activated. The changes become effective once the vote is passed.

Decred Security and Proof of Stake (POS)

Decred utilizes POW mining to create a similar pooling of computational power to Bitcoin. Combining Proof of Stake and ticket-holder voting eliminates this issue by creating staking nodes spread all over the world in a decentralized manner, and capturing voting tickets on- and off-chain.

 A person would need 51 percent of mining power and 51 percent of the Decred voting tickets if they wish to become the Decred network’s administrator. Taking Decred down, then, is not only virtually impossible but also multiple times more difficult than attacking Bitcoin.

It is evident from Politea’s proposals that community governance can be a great asset to crypto projects in the future. Decred gained wider recognition in the crypto space thanks to a community proposal that was accepted by Ditto PR, a marketing company. DCR has been listed on more exchanges as a result of this awareness-raising and is being accepted more widely as a payment solution.

In addition to staking rewards, the Decred Proof of Stake consensus has another benefit. Voting cards are then issued to token holders once their DCR has been locked on the platform. The user submits his or her ticket and becomes eligible to vote after maturation. The Politea vote-takers receive 30% of the total block rewards in DCR when they vote on the proposals. Decred reduces its block reward gradually, like Bitcoin, so there is no dramatic halving event like there is with Bitcoin.

These votes also now protect the anonymity of the ticket holder due to a privacy mixer built into the codebase. By protecting the identity of Decred users, this privacy implementation adds to the suite of convenient tools available to Decred users.