A Sound Store of value
I have been looking into Decred ($DCR) recently and really amazed by the fundamentals of the currency. So I asked Decred community to write a simple FAQ for our lovely Coinmonks’ readers and Haon did it.
What is Decred?
Decred is a community-driven digital currency designed to deliver a truly decentralized, fair, and sovereign alternative to traditional money.
It is a secure and adaptable currency that is a superior store of value. Everyone is invested and actively involved in helping Decred succeed.
Who created Decred?
The origin of Decred can be traced back to 2013 when an anonymous Bitcointalk user named ‘tacotime’ started a thread and published the whitepaper for Memcoin2 (MC2). Tacotime worked alongside ‘_ingsoc’, another anonymous user.
At the start of 2014, it appeared that tacotime also began work on another popular cryptocurrency: Monero. _ingsoc approached Jake Yocom-Piatt, the CEO of Company Zero, with tacotime’s MC2 concept.
At the time Company Zero was primarily focused on the development of btcsuite, an alternative full-node Bitcoin implementation written in Go. Their code is highly-regarded in the crypto community and used by many leading projects such as Ethereum, BitGo, Factom, OpenBazaar and the Lightning Network team.
Eventually, they joined forces to develop Decred.
Why was Decred created?
Decred was created to provide an alternative to Bitcoin. In 2015, Company Zero published a post outlining Bitcoin’s biggest challenges: governance, funding for developers, and PoW miners having too much power.
Decred gives more power to the people who hold the currency.
Is Decred a fork of Bitcoin?
No. Decred is a separate currency created by former Bitcoin developers who faced issues with the way Bitcoin was governed. They looked at what was successful with Bitcoin and what they could add by integrating formalized governance from the start.
The goal was to create a structure whereby anyone in the community with skin in the game could own and operate the system, make the rules, and determine the direction of the project.
When did Decred go live?
Decred launched on February 8, 2016.
How does Decred work?
The fundamental proof-of-work (PoW) base layer of the Decred blockchain is extended with proof-of-stake (PoS). The result is a unique blockchain with a hybrid PoW+PoS consensus system that provides an additional layer of security and a formalized governance model.
How is Decred different from Bitcoin?
Decred is distinct from Bitcoin in three key ways:
- Secure: Decred is proven to be more expensive to attack than pure PoW thanks to its hybrid PoW+PoS model that aligns incentives between miners and voters. This ensures long-term stability.
- Adaptable: Decred has built-in formalized governance that allows it to make changes to its consensus rules while avoiding hard forks.
- Sustainable: Decred is funded through block rewards. Only stakeholders with actual skin in the game can vote to authorize spending from the Treasury, which makes the project sustainable in the long-term.
Can I make money with Decred?
Beyond speculative benefits (similar to BTC or LTC holders), DCR holders can decide to participate in the PoS system. Just like PoW miners are rewarded to secure the network (60% of block rewards), PoS voters are incentivized to govern the Decred network (30% of block rewards).
Staking can deliver a decent ROI and allows long-term investors to have a voice in decisions to change the consensus rules and to approve spending from the Treasury (funded by the remaining 10% of block rewards).
Extra opportunities arise when you provide value to the Decred ecosystem since the Decred Treasury could potentially pay for your services.
Why haven’t I heard more of Decred?
Decred has been quietly building over the past 3.5 years. This has allowed the community to focus on creating a superior long-term store of value that will stand on its own — marketing can’t substitute for a great product.
What‘s on the roadmap?
Decred’s vision is to build a self-directed, decentralized future ruled by the collective intelligence of the community. Through the proposal platform, all stakeholders can submit proposals to change the future direction.
Notable achievements in 2019:
Decred is a highly complex digital currency that requires some studying before it can be fully understood. Below is a curated selection of the best readings, podcasts, and videos to help you understand the project.
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That’s it for now, send me ❤️, until next time.