Decred (DCR) is a blockchain-based digital currency platform that focuses on establishing "decentralized governance" and "decision making." Launched on February 8th, 2016, Decred's mainnet began using a hybrid proof-of-stake (PoS) and proof-of-work (PoW) network consensus algorithm in 2017.
Decred's Platform Aims To Solve Bitcoin Mining Centralization Problem
Similar to the maximum supply of bitcoins, the total number of Decred's DCR tokens has been capped at 21 million. The main problem that Decred's network aims to solve is the Bitcoin network's mining centralization problem.
Although many BTC supporters and developers such as Jimmy Song argue that the flagship cryptocurrency is decentralized, Decred's development team believes bitcoin mining has become centralized or consolidated to a select group of miners who can afford the electricity costs due to their strategic geographic location (among other factors).
According to Decred's founders and other members of the cryptocurrency community, there are a relatively small group of miners who hold a large amount of BTC. This select group of entities is able to "control the supply and demand of bitcoin", the Decred team claims. Notably, Decred aims to "resolve this fundamental problem" in the Bitcoin protocol by "revising its decentralization goals."
Some of the main features of Decred include:
- "easy convertibility between currencies",
- "incremental privacy and security",
- improved governance model,
- launch of a decentralized exchange (DEX) that supports atomic swaps in the future
"Autonomy In Transactions", Faster Settlement
Deploying a DEX that allows for atomic swaps will help in "eliminating" or significantly reducing trading costs while also "improving trade efficiencies", according to Decred's developers. The development team also believes that traders and investors looking for more "autonomy" as they conduct transactions and faster settlement may want to consider investing in the Decred platform.Collaborative Community Where "Everyone Has A Voice"
As a mineable cryptocurrency, DCR is reportedly community-funded and community-owned. Its community members come from many different backgrounds including software engineers, researchers, and traders. As a coin and as a platform, one of Decred's objectives is to promote "financial independence."As mentioned, another one of Decred's design goals is to address the issue of miner centralization and the problem of scalability and "destructive hard forks." DCR, Decred's native token, has also been created to function as a medium-of-exchange (MoE). However, the DCR cryptocurrency may not be considered a reliable MoE or store-of-value (SoV) at this point given the volatile nature of digital currency prices.
Extreme Price Fluctuations, Not Suitable For Payments
When Decred's DCR token was first launched, it was trading at about $0.95. During the historic crypto market bull run, which took place towards the end of 2017 and early 2018, the DCR coin was trading as high as $122. At press time, each DCR coin is only worth about $17.87, which clearly indicates that it is not yet stable enough to be used for payments.
On October 23rd, 2018, Malta-based cryptoasset exchange Binance announced that it would start listing the DCR token. The DCR cryptocurrency also trades on other major exchanges including Huobi, Bittrex, Upbit, Poloniex, OKEx, among many others.
Interview With Manager Of Decred's Development
During an interview in late September 2018, Marco Peereboom, the former CTO of Conformal Systems and current CTO of Company 0, a firm mainly focused on the ongoing development of Decred, revealed that him and his colleagues began "pivoting" towards cryptocurrencies in 2011. Specifically, Peereboom worked with one of the earlier implementations of the Bitcoin (BTC) client.
Notably, the Company 0 CTO claims to have "met with hostility and resistance" when working alongside some of the developers from the Bitcoin Core group. According to Peereboom, the Bitcoin (BTC) community had a "severe lack of governance" as there were "a whole bunch of decisions being made poorly." Given that miners on a proof-of-work based cryptocurrency network have a lot of power, as they have write access to the ledger, Peereboom explained that there needed to be "a mechanism to override" what the miners may have recorded onto the blockchain.
As explained by Peereboom, users and stakeholders (those owning DCR tokens) are able to override what has been recorded on the Decred blockchain through their "veto rights." In instances of dishonest behavior from miners, a DCR stakeholder may exercise their veto power to ensure that the integrity of the ledger is maintained (or not compromised). Essentially, what this means is that a miner may not receive any compensation for their work in generating/validating a new block of transactions on the network if they acted dishonestly.
A user can purchase tickets for voting, with each ticket costing about 9 DCR as of late September 2018 (although ticket prices are subject to change). For every new block that is mined on the Decred platform, users can purchase up to twenty tickets, Peereboom stated during the interview.
Tickets Drawn Randomly From Large Ticket Pool
Users can start accumulating tickets and the tickets can then be used to vote. The more tickets a user has, the more they can vote on decisions related to the Decred platform's ongoing development. There's also a large number of tickets that have been placed in Decred's ticket pool. With every new block mined on the cryptocurrency network, five tickets are drawn randomly and counted towards the platform's overall voting process. As mentioned, one of the main goals of voting is to determine and ensure that miners are behaving honestly.
Voting occurs on-chain and all Decred ticket holders have the opportunity to vote, and all votes are recorded on the platform's blockchain. Every full node on Decred can then completely verify that all network participants are following the rules outlined in Decred's consensus protocol.
Planned Features For Decred Platform
As mentioned on Decred's official website, some future updates planned for the platform include integrating or expanding on developments related to the Lightning Network (LN), a second-layer solution to expedite payments on blockchain-based networks.
On October 15th, 2018, Decred's proposal system, Politeia was officially launched on the platform's mainnet. With the release of Politeia, Decred's development organization also "ceded control over the accumulated project subsidy." The total subsidy amount was DCR 570,000, which was valued at $23 million at that time. The large amount of funds were given to Decred stakeholders, so that they could collectively make decisions regarding project "proposals, while also discussing, collaborating on, and funding new projects, initiatives, and consensus changes."
Looking Forward
Unfortunately, most of the projects in the emerging and fragile crypto space experience different challenges from time to time, which either results in development work slowing down or projects completely shutting down due to lack of funding. At present, Decred appears to have a relatively small community of less than 10,000 members in its Reddit group, a modest 39,000 followers on Twitter, and a very low level of engagement on YouTube.
This appears to be due to a low marketing budget. Moreover, the Decred platform does not seem to have any unique value propositions. Despite not promising to offer much more than better governance and decision-making, if Decred manages to deliver on some of the other planned features such as a robust DEX, then the project and coin could be fairly useful as peer-to-peer (P2P) cryptoasset exchanges have great potential for growth and adoption.
Originally posted on Crypto Insider : https://cryptoinsider.com/decred-dcr-prioritizes-blockchain-based-governance-and-decentralized-decision-making/