Nov 19, 2018 23:30 UTC
Nov 20, 2018 at 07:27 UTC
A Beginner’s Guide to Decred
The number of coins being added to the crypto world are proving to be countless as we see more and more options being added to the roster every other week. Naturally, you need a crash course in the key ones to know whether they really deserve your attention. In this article, therefore, we have a look at the Decred cryptocurrency. For putting together a clear and handy beginner’s guide to Decred, we will cover the basics of this crypto coin: what it is, how it works, and what makes it worthy of our interest. Many of the top cryptocurrency exchanges in the market support this coin, which tells us of the immense potential of it.
What is Decred?
Decred, which has the ticker symbol DCR, is an open-source crypto coin developed along the lines of Bitcoin. It actually comes directly from the Bitcoin community itself, because it was developed by the ones who designed btcsuite, a full-node Bitcoin implementation code composed in a different programming language, namely Go or Golang. It was launched in 2016 and forms part of the ever-expanding group of altcoins that derive inspiration from Bitcoin but also actively attempt to address its flaws. Decred aims to carry the Bitcoin vision forward without compromising on the areas where Bitcoin fails to deliver. The cons and pros of Bitcoin are almost equally substantial and Decred, like most other altcoins, attempts to build on the pros and eliminate the cons. According to its official website:
“Decred is an open and progressive cryptocurrency with a system of community-based governance integrated into its blockchain.”
How Does Decred Work?
Decred makes use of a rather interesting consensus protocol to keep its blockchain up and running. Now, we know that Bitcoin famously uses the Proof of Work consensus algorithm which is extremely dependent on heavy, expensive, noisy and inconvenient hardware resources. Decred seeks to reduce the emphasis on these pricey resources needed by miners by creating a hybrid consensus protocol which combines the concepts of Proof of Work as well as Proof of Stake consensus algorithms.
In this combination, all those who hold tokens can validate transactions without having to own heavy hardware. This validation process works on a virtual level and token holders also enjoy voting rights on the network. So essentially token holders are randomly chosen to validate blocks of transactions. Every set of freshly produced tokens are split several ways: 60% meant for miners using the Proof of Work model, 30% to stakeholders who form a part of the Proof of Stake model and finally, the remaining 10% to subsidize the further development.
What Makes Decred So Unique?
The fact that Decred stresses so highly on the needs of its community to offer a truly autonomous governance process, makes it a great offering in the crypto market. Especially as recent times have been seeing concerns over centralisation mount, the uniqueness of Decred in attempting to make the stakeholders’ voice matter is particularly relevant. It strikes a smart balance between the needs of the miners who can afford to dedicate heavy equipments to mining blocks, as well as those of the users who depend on token use for having their say in the governance. The result is a democratic network with great potential and viability. There are many different consensus protocols used in blockchain and Decred, by combining two of the best-known ones, comes up with quite a gem of an algorithm.