Updated: Dec 20, 2019
Decred (DCR) is a peer-to-peer electronic cash system, which is short for decentralized credits. The cryptocurrency prioritizes decentralized decision making and governance on the blockchain. The goal of this digital coin is to run autonomously, with voters and miners controlling the ecosystem in a balanced approach.
This guide will explain what DCR is designed for, the team behind it, the way it works, and various uses and applications.
What Is Decred Designed For?
Decred was designed to resolve some of the key Bitcoin issues. For instance, voting rights in the Bitcoin Blockchain are held by a small miner group, part of the core Bitcoin community. This should not happen on a decentralized network.
Another issue with Bitcoin was that participants began hoarding the cryptocurrency rather than keep it in circulation. With a maximum limit of only 21 million bitcoins and a very active user base, problems are bound to occur. The Decred team committed to fixing this weakness by incentivizing the community adequately.
Decred was launched in February 2016, as a solution to the many problems with Bitcoin and other cryptocurrencies.
Who Is the Team Behind Decred?
Decred is created by co-founders Dave Collins, Alex Yocom-Piatt, David Hill, John Vernaleo, Jake Yocom-Piatt, and Josh Rickman. All of them are experienced developers. They engineered the notable “btcsuite” using golang before working on launching their crypto project. By being involved in Bitcoin from an early stage, the founders identified potential problems and decided to build Decred, even before the community acknowledged the issues.
The Decred team is considered one of the most decentralized teams in the crypto industry, with representation on every continent. There are no hierarchical titles or headquarters. This offers the project, a global reach, which is not constrained by state boundaries.
How Does Decred Work?
One of the more significant aspects of the framework is the hybrid Proof-of-Activity consensus model, which successfully combines Proof-of-Stake (users) and Proof-of-Work (miners). In this hybrid model, 30% block rewards go to voters, 60% to the miners and 10% are reserved for project treasury. This ensures that the ecosystem remains balanced and doesn’t tip in any segment’s favor.
A governance system called Politeia is used by Decred, which allow the token holders to vote on the project’s future. This system acts as a proposal system or in layman’s term – “contracting ecosystem” where ideas are put forth and voted upon.
The PoS system is open to anyone who owns the DCR tokens. These tokens are used to buy tickets, which allow a user to participate in the PoS system. Miners will include the ticket in the block where a user waits to be chosen. This can take anywhere from a few hours to 4 months. Once chosen, a user can help validate the block and receive the price of the ticket, along with a staking reward.
The staking process is important, as it encourages long term investment in the Decred project since the tokens tend to get tied up in the system for weeks (at least) when users stake them.
What are Current and Future Applications of Decred?
DCR is a relatively new crypto coin and at this time, its primary use is to send payments and accept remittances. DCR can be purchased on exchanges such as Changelly, Bittrex, and Poloniex among others with Bitcoin or Ethereum. They can also be purchased through fiat currencies.
Top companies that accept DCR are GamerAll.com, I49 Seed Bank, CoinPayments, Spheroid Universe, BitDials, and HostSailor.com among many others. DCR can also be used to book hotels through Trippki.com, which is a Crypto-Friendly Hotel Booking Platform.
DCR is everything that BTC was designed to be but failed when released into the open wild. It may not be the most well-known cryptocurrency right now, but the project is considered solid by many analysts who believe sustainability is to remain for a long time to come.
This is because of the hybrid Proof-of-Activity consensus model used by Decred, which ensures a balanced ecosystem. It is also because Decred is community-oriented and anyone can be a volunteer or a project contributor.
Currently, DCR has a market cap of $550 million, which may not be much but is expected to grow, because the coin can build upon on-chain governance to fund itself with more security.
Lastly, the Decred team works consistently at making the network better. They even look to the community for ideas and have a proven track record of implementing changes quickly, when things are not going in the right direction.