Decred (DCR)
What Is Decred (DCR)?
Decred (DCR) is a blockchain-based cryptocurrency launched in February 2016. The Decred token and protocol were created to facilitate open governance, community interaction, and sustainable funding policies.
According to the official whitepaper, Decred was created in such a way that the community approves all transactions and changes made regarding the protocol. Hence, there is no way for big Decred holders to manipulate the operation of the protocol. Decred was heavily influenced by Bitcoin and utilized many of the underlying principles of the original cryptocurrency.
Who Are the Founders of Decred?
The main driving force behind the creation of Decred is an enterprise called Company 0. Its mission is to use the capabilities of blockchain technology to create better personal data protection and to bring organizational liberty to projects.
Jake Yocom-Piatt is the founder and CEO of Company 0. Currently, he is serving as a project lead for the Decred project. His involvement with cryptocurrency and blockchain technology spans over more than ten years. Code written by Jake Yocom-Piatt has been used in the composition of several Bitcoin-related projects, including the creation of Lightning Network Daemon.
Marco Peereboom is the chief technical officer of Company 0. He is the direct supervisor of several teams on the Decred project, including development, security, and infrastructure. Mr. Peereboom’s career includes positions in companies like Dell, where he was a Senior Architect. He has been at Company 0 for more than five years, and his involvement with the Decred project is essential for the successful launch of the cryptocurrency.
What Makes Decred Unique?
Decred is an innovative project because it bets on blockchain technology’s decentralized nature to prevent monopoly over voting status in the project itself. One of the main goals of the Decred protocol is to ensure that all DCR holders have the same amount of decision-making power and that large institutions cannot swing the votes in their favor.
By introducing ticket-holder voting, Decred ensures that people who have enough DCR will have the opportunity to participate in votes regarding the company/token’s future and operations. Decred also created a dedicated voting platform called Politeia, which allows users to participate in votes, submit proposals and start discussions.
Not only that, but to ensure those voting rights, Decred is employing a hybrid consensus mechanism, which combines both the proof-of-work (PoW) and proof-of-stake model (PoS).
How Is the Decred Network Secured?
Decred uses a hybrid PoW/PoS consensus mechanism, which combines features of the two most popular consensus models. The cryptocurrency uses proof-of-work (PoW) to mine new blocks on the blockchain; however, miners receive only 60% of the reward after a successful mining operation.
The proof-of-stake (PoS) consensus is used in the voting organization, and it allows users to participate in the ticket-holder voting system. Voters employing the PoS consensus receive 30% of the block reward.
The remaining 10% of block rewards are stored in the Decred Treasury. Decred hosts frequent Politeia discussions and votes on how the funds from the Decred Treasury should be spent.
How does Decred work?
Decred was created by copying Bitcoin’s code and thus the cryptocurrency offers similar features, with varying modifications.
For example, Decred’s block time is 5 minutes long (compared to Bitcoin’s 10), its mining difficulty adjusts roughly every 12 hours (compared to Bitcoin’s two weeks), and its block reward is allocated to miners, stakers and a treasury (as opposed to 100 percent issued to Bitcoin miners).
Hybrid Consensus: PoW/PoS
- Central to Decred is its hybrid Proof of Work (PoW) and Proof of Stake (PoS) consensus mechanism that keeps the distributed network of computers running its blockchain in sync.
- Similar to other PoW cryptocurrencies, Decred miners expend energy to solve computational puzzles to validate transactions and add blocks to the blockchain.
- Decred’s PoS then allows those who stake DCR to validate and confirm those transactions and also participate in the network’s governance process.
- Stakers are given ‘tickets,’ a non-transferable asset specific to the Decred network, with 20 tickets being available each block. Five of those tickets are then randomly chosen, and their owners then validate the correctness of blocks proposed by miners.
- Once blocks are finally settled and added to the blockchain, the block reward is issued to the parties involved as follows: 60% to miners, 30% to stakers, and 10% to a treasury.
Politeia
- Politia is a governance system implemented by Decred that aims to create an open environment for new ideas and a voting system for accepting and implementing them.
- Users who wish to offer potential upgrades or policy changes can do so using the Politeia public proposal web platform that facilitates the submission, tracking, and discussion of suggested changes to Decred governance.
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