{"id":31838,"date":"2018-03-13T11:16:07","date_gmt":"2018-03-13T18:16:07","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=31838"},"modified":"2018-03-30T00:51:56","modified_gmt":"2018-03-30T07:51:56","slug":"decred","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/decred\/","title":{"rendered":"An Introduction to Decred (DCR) – Autonomous Digital Currency"},"content":{"rendered":"

Some of Bitcoin\u2019s most significant challenges revolve around the lack of equity in governance. Decentralized currencies should distribute power evenly across their networks. Despite this, it seems as though miners currently have too much power. These are the issues that Decred<\/a> aims to solve.<\/p>\n

Short for ‘Decentralized Credit,' Decred is a hybrid Proof-of-Work, Proof-of-Stake system that relies on a particular form of governance that is unique from all other coins.\u00a0Decred's development team says they designed the token to be as Bitcoin originally intended to be. They want to achieve the same goals as Bitcoin without some of its flaws, such as transaction times and scalability.<\/p>\n

Decred History<\/h2>\n
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Decred is a self-governing token, designed to solve Bitcoin's largest issues with scalability and governance.<\/figcaption><\/figure>\n

A long time ago in a galaxy far, far away, there was an unknown man who surfaced on the internet and called himself by the username “tacotime.” He responded to a thread on Bitcointalk<\/a> titled \u201cWant to make an altcoin that actually changes something?\u201d on April 3rd, 2013.<\/p>\n

He said he and his team had an idea, but they needed coders with the time to work on the project. Three days later, he started a thread<\/a> titled \u201cMemcoin2 (MC2): A Hybrid Proof-of-Work, Proof-of-Stake Cryptocurrency\u201d.<\/p>\n

This concept would eventually evolve into the Decred coin that we know today.<\/h3>\n

The anonymous user “tacotime” worked with another person who went by the alias \u201c_ingsoc.\u201d\u00a0Due to their anonymity, not much is known about them; however, one thing is clear: the success of Decred is largely due to the hard work of these two individuals.<\/p>\n

At the beginning of 2014, “_ingsoc” took the project to CEO Jake Yocom-Piatt of Company Zero (C0) which was named Conformal Systems at the time and operated as an open-source software engineering firm.<\/p>\n

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On average, 288 Decred blocks are mined per day with a target of 5 minutes per block.<\/figcaption><\/figure>\n

In a piece written by Yocom-Piatt regarding some of Bitcoin\u2019s biggest challenges<\/a>, he points out the power that miners have \u2014 whether it\u2019s stopping new consensus rules from being implemented, censoring transactions, or mining empty blocks.<\/p>\n

Unfortunately, there\u2019s been a clash between Bitcoin developers and miners \u2014 miners have one idea, the development team has another, but there\u2019s no way everyone can reach an agreement because there\u2019s no decentralized governance system.<\/p>\n

Worst of all, Bitcoin investors have no say in any decisions about its future. Yocom-Piatt proposed that the only way to overcome these issues is to create a new altcoin that properly implements suggestions of the community.<\/p>\n

C0 announced the answer to these problems on December 12th, 2015, and Decred was born.<\/p>\n

\u201cDecred will be an open, progressive, and self-funding cryptocurrency with a system of community-based governance integrated into its blockchain\u201d<\/p><\/blockquote>\n

Decred Governance<\/h2>\n

Decred uses a self-governing system with checks and balances implemented in order to\u00a0remove some power from the miners and distribute it to the average Decred owner.<\/p>\n

This is probably one of the key selling points of Decred. Their governance system is impressive and the first of its kind.<\/h3>\n

Unlike other cryptocurrencies such as Bitcoin, Decred uses a mix of Proof-of-Work and Proof-of-Stake which blend together brilliantly \u2014 every block reward is divided up into three sections.<\/p>\n

Here is the how the Decred mining rewards work: 60%<\/strong> of the block reward goes to miners, as they use energy for all of the computation, and 30%<\/strong> goes to stakeholders as a reward for using (staking) the network. Lastly, 10%<\/strong> of the block reward goes into a treasury fund and\/or to the developers.<\/p>\n

This money is used to pay the developers for their hard work, as well as to pay contractors, further developments, and more.<\/p>\n

How does this work?<\/h2>\n

Anyone who owns Decred can take advantage of the Proof-of-Stake system. Whenever the network votes on something, voters must earn tickets to participate.<\/p>\n

To do so, they lock away (stake) their Decred for 28 days. It\u2019s like buying a lottery ticket, except you never spend the money. Instead, you commit to locking it away for 28 days.<\/p>\n

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Tickets can be easily purchased through the Decred wallet. The price of the ticket fluctuates based on demand to prevent any one person from buying too many for themselves.<\/figcaption><\/figure>\n

This reward system encourages people to use the network. After 28 days, those who staked their Decred receive their money back as well as interest on top of that. Furthermore, they receive a ticket which they can use to vote. Voters are being paid to vote and contribute to the decentralized network.<\/p>\n

The system is compelling for three reasons:<\/p>\n