Decred Cryptocurrency – a Project That Seeks to Solve Many of Today’s Crypto Problems

The advent of alternative coins has stimulated the digital gold development teams to introduce innovative solutions to the Bitcoin ecosystem and has drawn public attention to the blockchain industry. Some altcoins have found practical applications and are becoming an integral part of the new digital economy.

Decred (DCR) Price

Buy Decred (DCR) coin

What is a Decred coin (DCR)?

The official launch date of the Decred crypto network was February 7th, 2016. Work on the project started at the end of 2013 and soon a trial release was issued, but the platform had a number of shortcomings, which took the team more than two years to fix.

Before the launch of the blockchain ecosystem, a powerful advertising campaign was undertaken. Investors were informed of a huge dividend, ensuring that the startup would immediately become one of the top ten most popular coins in the crypto industry. The real achievements were much more modest, and only a year later DCR began to rise in price, reaching an absolute high ($129.37) in January 2018.

The network focuses on maintaining anonymity – this concerns not only users but also the project team itself. The names of most developers are unknown, judging by information provided on the popular forum Bitcointalk.org. The project team comprises of:

• 14 blockchain-engineers;
• 19 marketers;
• 8 designers.

There has been no pre-sale of DCR tokens, the project is self-financed and managed by the community.

What problem does Decred aim to solve?

The reason for creating this cryptocurrency is to find a solution for the main problems that exist in many blockchains. In particular, within the Bitcoin blockchain. The existence of problems was known even in the early stages of BTC development. But now, these issues have become more dangerous. Nevertheless, the Bitcoin community is not going to solve these problems so we need a system that’s free of such flaws.

But first, we need to identify what kind of problems are present in the BTC network. These need to be listed and understood how they affect the system. Only then can potential solutions be implemented.

Problems with managing a blockchain project

The first problem is managing the Bitcoin project. Initially, decisions were made by miners. They are responsible for conducting transactions and creating new blocks. Moreover, they can control the entire system. But in the BTC system, the interests of miners are not the same as that of BTC holders and developers. These three groups have their own vision of how a blockchain should develop. To date,these groups have still not reached any form of agreement on this issue.

It is also important to mention the situation with the creation of the Bitcoin network client. Updates offered by developers are often not accepted by miners. Example: numerous forks of bitcoin (in particular, BTC Cash). Potentially, miners can block the appearance of any updates and this will prevent Bitcoin from developing further.

Problems with developer support

The second problem concerning Bitcoin is developer support. In later blockchains, this problem has already been solved; however, for Bitcoin, the situation has not changed for many years. All development is based on voluntary donations from users. Yes, crowdfunding is a good way to start a project but a more reliable source of funding is required for stability.

The situation is aggravated by the fact that developers are ultimately financially dependent on coin holders and miners. They can’t promote changes that are useful to the system. By the way, there are no options with voting for useful or necessary updates. This only makes the situation worse for developers and it slows down the speed of the system’s development.

Problems with the principles of cryptocurrency mining

One of the main problems in the Bitcoin network is the principle of mining cryptocurrency; however, the problem also affects many other systems. Miners always receive awards for blocks, regardless of the number of transactions. Even empty blocks that do not contain useful information will be added. This additionally burdens the client, complicating the process of using blockchain.

At the same time, simple miners are cut off from the process of creating blocks. Everything here is managed by large companies. Therefore, many analysts are afraid that, for example, the company Bitmain is capable of taking 51% from the general hash rate of a network. This will result in dictating conditions for all Bitmain members. There are no mechanisms to protect against such interference in the Bitcoin network.

Another issue is related to the award for mining when the issue of 21 million coins is reached. Many analysts are already questioning whether a reward from transactions will be enough. If miners decide that their efforts do not pay off, the network will be left without support and that could potentially lead to the collapse of BTC.

Specifics of DCR ecosystem

Cryptocurrency offers a new blockchain control concept. In many ecosystems, developers, miners, and coin-owners are divided into three separate camps – each of which stand for their own interests – sometimes radically opposing other groups. Rig owners keep the network functioning, but they are not always interested in crucial updates and can completely block the development of the project.

In systems using PoW, the threat of centralisation comes from large investors. By using a hybrid consensus algorithm PoW + PoS, all project participants can influence the platform development process. Full decentralisation, self-financing and harmonious conditions for miners and investors are the main features of the Decred ecosystem. Developers strive to secure DCR cryptocurrency from hard forks. However, the possibility of separating the chain exists and the final decision is made by the network users.

Politeia – the out-of-block voting system used to control free access. One of its main components is voting tickets. You can become the owner of a ticket by freezing 5 DCR on your balance. Tickets give you the right to participate in PoS Mining, vote for updates, and submit your network upgrade options to the community for voting. A commission fee of 0.1 DCR will be charged for each offer you make. This measure is designed to protect the Politeia mechanism against spam. Otherwise, detractors could easily disrupt or block the voting system by making many irrational proposals.

In addition, Politeia uses an open censorship system. No initiative can be blocked if the administration lacks strong arguments for it. The author putting forward any proposal receives a special digital marker. If it is blocked by the developers, the author can use the token to present the idea for public discussion and users will decide the fate of the proposal. Although, if the account offers explicit spam, it will be blocked with the full support of the community.

Even if the administration approves the innovation immediately, it will still be submitted to a “referendum”. The results will be considered only if at least 20% of users are involved in the process. A proposal will be considered approved if it is supported by at least 75% of users who participated in the voting process. This is how the crypto republic of DCR coin functions.

The system possesses sufficiently high bandwidth due to the application of the Lightning Network protocol. It reduces load and increases transaction rates. The exchange of funds takes place through the formation of bills of exchange and is not connected with the process of generation of new blocks.

The consensus algorithm used by the system guarantees double protection against 51% attack. Not only does an attacker need to take control of more than half of the network hash rate, but an attacker also needs to have full control over the voting process, which makes the attack too expensive and therefore, completely pointless.

Advantages and disadvantages of DCR blockchain

The advantages of the Decred blockchain ecosystem are as follows:

• Decentralisation;
• Open source;
• Self-financing and self-governance;
• Integration of atomic swaps and the Lightning Network;
• Two consensus algorithms.

Among its disadvantages are a rather low price and weak distribution of the cryptocurrency.

Trading – where to buy and sell DCR coins?

Decred currency exchange supports 27 trading platforms, including EXMO.

It is possible to exchange DCR coins for another cryptocurrency or fiat. The main trading pair is DCR/BTC. The current yield for staking DCR is ~0.87% per 29 days or 10.2% annually.

Distribution of DCR Coins

All mined Decred coins are distributed among participants as follows:

• PoW miners – 60%;
• PoS validators – 30%;
• Platform Development Fund – 10%.

Block reward is reduced not by halving as Bitcoin, but more gradually, by 1% for every 6144 blocks found. Among the Best Decred PoW Pools are Beepool.org, F2pool.org and CoinMine.pl.

Decred Storage Wallets

The official Windows wallet is available on the developers’ home page. If you work with Linux or macOS, visit https://decred.org/ and select the program you require. There is a mobile version for Android and iOS, as well as a cross-platform, automatic installer/updater for command-line applications. If you need a web wallet, use the multicurrency service Holytransaction or Guarda. Exodus, Coinomi, or Atomic Wallet are suitable for use with your PC or smartphone.

Conclusion

So, we have found answers to the question “What is Decred cryptocurrency and what are its specifics?” Now it is finally time to talk about the prospects of investing in Decred cryptocurrency. The platform is still developing and part of the platform’s functionality is still under development. Other elements are still being tested but what is available is enough to assess the prospects of the project. Information on important changes to the network can be found in the “Decred Journal”.

As one would expect, this project has both advantages and disadvantages, although it has an important mission – to solve many of today’s crypto problems. Not so many other projects are trying to do what Decred is attempting, moreover, it has hybrid consensus algorithm PoW + PoS. This makes the project interesting for the cryptocurrency community. In general, the Decred cryptocurrency looks like a promising project but investing in it carries a certain risk.