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Decred, which stands for ‘Decentralized Credits’, is a payment coin that was founded
in 2015.
The founder of Decred, Jake Yocom-Piatt, worked initially as a developer on Bitcoin before
deciding to create a new project that addressed supposed governance issues in the crypto space’s
number 1 cryptocurrency.
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Yocom-Piatt and other core developers dreamt of creating a more democratic coin that truly
belonged to its users, and today, this dream is a reality with the creation of a hybrid
proof of work proof of stake algorithm.
The Proof-of-Work mining on Decred creates the same effective pooling of computational
power as that on Bitcoin.
The idea is that the potential centralization of this is then counterbalanced by the Proof
of Stake nodes that are spread out all across the world.
Each of these nodes, no matter how small, has an equal vote on the project's purpose-built
Politeia voting platform.
This creates a kind of ‘on-chain democracy’ that is very different compared to other voting
mechanisms on other chains.
Usually, we see large token holders having a correspondingly larger vote, and so creating
what could be called an ‘on-chain plutocracy’.
But to vote on Decred, token holders must first lock up their DCR.
Once they’ve done that, they receive voting tickets, which, after a period of maturation,
allow them to become a voter.
As they vote on
the proposals put forward on Politeia they are rewarded with a share of 30% of the total
block reward, in DCR.
This dual-consensus mechanism not only makes the platform more democratic but also more
secure.
To gain control of the Decred network, an individual would have to capture 51% of the
Decred mining power and 51% of the voting tickets.
Also, thanks to a privacy mixer that has been built into the Decred codebase, the identity
of voters is now hidden.
This privacy implementation also applies to DCR payments, and although this is opt-in
privacy instead of privacy enforced as standard, it is still another convenient tool available
for users.
There have been many successful votes on Politeia , including one quite recently that called
for the construction of an on-chain Decentralized Exchange.
This has since been implemented, and the Decred community can now trade between DCR, BTC and
Litecoin with no fees and without their funds leaving the wallet.
Yocom-Piatt has also contributed code to Bitcoin’s long-awaited Lightning Network, and helped
to implement these Lightning payment channels on Decred.
In this way, the Decred team is closely following the grand vision for Bitcoin, which aims for
trustless, instant, universal value exchange, with negligible fees.
For a current-day look at why effective decentralization is important, let’s look at the Robinhood
vs. Wall street bets example.
When Robinhood banned retail investors like you and me from buying more GME stock, Robinhood
being the centralized service, were accused of supporting the powerful on wall street.
The community felt this centralized platform took the power away from the people.
And I would have to agree, given it stopped the little man from winning against those
on wall street.
Even facebook and twitter have been accused of censoring content according to their own
narratives.
These centralized social media giants have grown so large that they could effectively
make or break parts of a democratic society.
And if the elected officials of nation-states don’t like that, their only chance is to
attempt to persuade one single, fallible human being to change his mind.
Decred is seeking to change what Yocom-Piatt refers to as neo-feudalism, and even if they
don’t achieve large-scale adoption on the scale of Bitcoin, they can still teach an
important lesson to the rest of the crypto and tech community.