Launched in February of 2016 by some of the top minds of the Bitcoin project, Decred is a community-focused cryptocurrency that places an emphasis on governance. The team behind Decred believes that Bitcoin is losing its original decentralized identity through updates and a less distributed spread of voting power due to extreme mining demands from the network.
The fundamental unique value proposition of Decred is their mining structure, from which they use a hybrid of proof of stake and proof of work, similar to platforms such as Aeternity. They hope to completely bypass disagreements over the future of the currency, as the decision making power will always rest within the community. Decred has an exciting roadmap with features that extend beyond simply exchanging value.
Mining & Governance with PoS/PoW Hybrid
Bitcoin uses what is known as proof of work mining protocols. This basically means that miners, or specialized computers designed to work at maximum computing power, work hard to crack complicated algorithms to verify digital transactions between crypto holders. Over time, miners have figured out how to cut corners as a result of competitive evolution, and have been able to develop specific machines called Application Specific Integrated Circuits (ASICs).
These ASICs can mine Bitcoin much more efficiently through an exploitation of the hashing algorithms that are solved. This has lead to the creation of mining pools that create centralized groups of power throughout the Bitcoin ecosystem, something Decred and many other believe is detracting from Satoshi’s original mission.
More Efficient Mining Protocol
Decred uses a much more efficient mining protocol that creates a completely even spread of mining access without requiring extreme amounts of brute force computing to gain a proof of work stamp. In this mode, there is no work required to mine the currency due to their unique Blake hash algorithm. There is still proof of work required to verify transactions, but the ASIC’s, or increased efficiency mining rigs, do not have any advantage over your average computer.
All that is required in order to participate in governance is to stake a certain amount of coins to establish yourself as an oracle for verification, much simpler and decentralized process. `In addition to verifying transactions, those who have provided a proof of stake in the network receive voting rights on the future decision made for advancement of the Decred technology. Recently, the community at large has been making improvements to the ability to send anonymous transactions, similar to coins such as Monero. While it does cot DCR to participate, users receive this money back after about 250 blocks have passed the decision block. This incentivizes users to truly keep the best intentions at heart for the future of Decred.
Transaction Expiration Dates
In addition, Decred has also created a feature to their code that provides the option to create an expiration date for transactions. This adds efficiency by removing the possibility of multiple stalled transactions to clog the network, and will cancel them if their are delays to the network.
Decred’s Trailblazing Protocol
As mentioned, Decred is not simply focused on being a truly decentralized entity, rather, they are working to utilize all of the latest cutting-edge blockchain scalability and utility advancements. For example, Decred has been working to implement sidechain functionality similar to that of the lightning network, in order to vastly increase the amount of transactions that can be processed per second be de-loading the network at any given time. This method involves taking individual transactions off chain to exchange value, and then only brought back to the main chain to be cemented into the distributed ledger. This removes the need for the mainnet to support the thousands of transactions happening simultaneously that bog down the speed of transactions.
Decred is a leader in the area of user interaction, or UI. They have recently implemented a design-it-yourself feature that enables anyone customize their experience while using Decred. Their web wallet is readily available on Windows and Mac and allows users to not only receive and send value, but also to join in on mining instantly. One of their crowning achievements was the successful completion of an atomic swap with Litecoin. They were able to instantly exchange between the two currencies without the use of an exchange or third party entity, something that hasn’t been seen in the space before. This would be huge step for bringing crypto adoption and ease of use to the mainstream.
Open-Source and Community Driven
Decred is also a completely open-source project that has maintained a very community-driven approach to building their platform. The code is completely auditable by anyone, and in combination with their consensus and governance protocols, Decred allows the stakeholders and community at large to make decisions regarding the rules and laws within the platform. These newly implemented rules and platforms can be implemented without the need for a hard fork with their unique on chain adaptable protocols. Decred is a very malleable and steadily evolving platform that has already been able to successfully traverse some of the roadblocks that Bitcoin is still struggling to overcome.
Decred is one of the few cryptocurrencies that is truly community driven, and they may be the most dedicated and successful promoters of this cause so far. Stakeholders and miners alike are rewarded for their efforts in supporting the platform, and newcomers are incentivized to join due to the ease of onboarding and becoming a contributor to the community. Users can participate in mining straight from the Decred wallet without the need for expensive mining machines, and these miners are not competing to beat each other out to prove they are contributing, but they are working together to further the platform. With such a team-driven mentality and a well-functioning source code, Decred has high hopes for becoming one of the most widely used and easily accessible forms of cryptocurrency.
The Future of Decred
Decred aims to implement some very exciting features beginning in 2018. One of these is the ability for the community control and allocate the funds raised for development, a very decentralized way of handling a platform. Decred would be one of the first entities to facilitate such a community-driven initiative that removes control from the leadership and wholly distributes it to their supporters. In addition to this, they also aim to form a stakeholder-driven DAO, where the community would be able to make decisions regarding the future of the platform together. This, along with lightning network integration, will set Decred up to be one of the fastest and most decentralized entities present in the cryptocurrency market.
Decred is a very strong community that has worked tirelessly to create a platform that has no chance of its voting power and ownership being stuck within a concentrated group of individuals. They have ensured a means of distributed governance and incentivized mining and participation within their platform. Decred aims to provide a faster, more community-minded protocol that will exist as a decentralized entity for the entirety of its lifespan and resist the centralized control shift that Bitcoin has experienced. In order for Decred to continue to grow, they will require multiple partnerships and payment integrations to demonstrate the quick and efficient nature of their currency.