Coin Review - Decred (DCR)

What is it?

Decred is an altcoin that is very similar to Bitcoin. This is because it was forked from the Bitcoin network in 2016 by some of the core Bitcoin Developers. In short, Decred is widely considered "Bitcoin with governance". The developers that created Decred had a vision in mind that built on Bitcoin but included more community input, sustainable financing (thus development) and open governance. Further, it utilized a hybrid Proof of Work (PoW) / Proof of Stake (PoS) consensus algorithm that helps to create a balance between miners and users. 

As such, Decred are hoping to build a network that is more flexible and community owned than Bitcoin and capture large portions of the global remittance market.

What is the DCR token?

Very simply the DCR token, much like Bitcoin, is the mechanism for tracing capital on the Decred Ledger.

What problem is it solving?

When the developers of Decred realised that Bitcoin had governance issues that could not be solved in a timely manner through the Bitcoin community, they developed Decred. Through hybrid PoW/PoS mining, Decred ensured that the key network decisions could not be hijacked by miners as they have previously in Bitcoin. It does so because PoS is a lot cheaper for retail users to mine fairly and thus have 'ownership' of the network and votes in key network decisions, on Decred both PoW miners and PoS miners are now included in decisions such as what improvements miners should work on or whether or not to activate pending code on the network.

To date the governance has worked as designed, users have voted on what the developers should design and voted on whether or not to push the new code onto the blockchain.  

Why do we like it?

  • The hybrid mining is an improvement for retail market invovlement on solely PoW consensus blockchains. It allows for the retail market to compete without the prohibitive hardware and electricity costs associated with PoW

  • Like Bitcoin, Decred has numerous applications. A Store of Value, a Medium of Exchange, a Unit of Account

  • Developers have continued funding on Decred. Every block that is mined, 10% of the block reward goes into a treasury to be used to compensate developers.

  • Governance has been a continued sore point of the open sourced crypto community. You do not have to look too far back to see how lack of governance lead to some toxic situations - e.g. Bitcoin Cash fork.

  • No pre-mine, no ICO. 

Why do we not like it?

  • Despite being in the crypto market for almost 3 years, Decred has little market permeation and awareness compared to many crypto assets.

  • Many others are now competing with on chain governance mechanisms that may hinder Decred's market strength of being the only governance blockchain in existence (e.g. Tezos and Ethereum). 

  • The project is still young and requires a lot of development to achieve their ultimate goal. Further, a lot of trust is placed in Decred Holding Group to disburse treasury funds to developers.

Disclaimer: Magnet Capital does not accept any liability for any financial decisions made on the basis of the information provided. The above opinion does not constitute financial advice and should not be taken as such. Magnet Capital urges you to obtain professional advice before considering any investment decisions

Egor Sidelska