Decred (DCR) coin works on the platform which focuses on decentralization of the blockchain. This covers decision making process, mining and governance, with all of them seen by Decred’s founders as being threatened by centralization.
The Decred cryptocurrency was launched in February 2016, backed by the vision of the people from Company 0 to create a sort of more decentralized and “democratic” equivalent of Bitcoin. This is not unusual, considering that the people behind the project were former Bitcoin developers. Going beyond this goal, Decred was supposed to become a cryptocurrency which will achieve full autonomy by focusing on leaving the decision making process and governance solely in the hands of coin owners and miners on its network. In order to make this decentralization possible, Decred had to implement several modifications to its protocol with the focus on several key areas.
The first issue to be tackled by Decred was the one relating to the project governance. The rise in the scope of the mining operations on Bitcoin, for example, led to the dominance of a few big mining companies with the largest resources. Over time, this helped with the centralization of the decision making power in fewer hands. This led to clashing visions regarding the management of cryptocurrency between the members of its community, miners and developers, particularly when deciding on hard forks. To avoid this, Decred implemented a hybrid voting protocol combining what it saw as the strengths of both proof of stake and proof of work models.
This combo of mining and staking allows all participants to have an off-chain vote on improvement initiatives and proposed forks on Decred blockchain. Each one of them can bring their own suggestions to the table, with every proposal going through the evaluation by the users are appointed to the Decred Assembly by means of voting.
The second problem Decred wants to correct is related to autonomous self-funding as the path to creating a fully decentralized currency. As much as 10% of the block rewards are set aside for the Decred’s treasury fund, by which the platform ensures the self-funding of its development for as long as the mining goes on. Remaining 60% of the rewards are reserved for the miners and 30% for the voters. This promotes the project as something which should remain sustainable through the actions of the coin owners and/or miners themselves.
To make this possible, DCR coins are rewarded for both the mining and stake verification processes. Their holders can buy tickets for the participation in the proof of stake mechanism. The tickets are mined as block segments, prompting the user to wait for the completion of this process or pay fees to secure earlier mining of tickets. After the tickets are mined, they still need to “mature” before being chosen among the others in the pool.
Finally, Decred wants to prevent giving some participants an excess level of control over what happens on the network, such as being able to enforce censorship. Instead of this, Decred applies the principle of transparent censorship which prevents users to be silently censored provided that they can give evidence that censorship has actually taken place. To this effect, Decred implements the Politeia web platform which resembles social network Reddit, in which the users are free to submit, review and discuss suggestions and proposals. Those who own tickets use their wallets to take part in the voting process.
With its focus on making the blockchain work better in terms of its governance, Decred may eventually find itself competing with Dash and similar projects. In order to make the transactions on its blockchain faster and reduce transaction fees, Decred is in the process of implementing Lightning Network. This process will involve handling the transaction processing via micropayment channels instead of doing it on the main blockchain.
As of November 2018, DCR’s market cap stands at USD 346 million, down from almost USD 800 million it had earlier in 2018. The total supply of coins is capped at 21,000,000 DCR, with 8,767,868 of them being currently in circulation. The coins are available for trading on cryptocurrency exchanges such as Poloniex or Bittrex.