Decred (DCR): Since Bitcoin hit the $8000 mark at the start of April, the whole market responded with a flash of green across the board. As other coins such as Eos (EOS) took its place on the top 5 ranking and Verge (XVG) plummeted after an unexpected partnership with Pornhub, one token escaped the headlines as its price spiked over 300% during the month of April. Decred (DCR) saw its price soar to over $130 to hit $139.04 for a brief moment this Wednesday from a low of $39 at the start of April.
What is Decred?
Decred (DCR) is a Bitcoin fork that was created with the intention to cure Bitcoin’s problems on mining. Mining is a key element on proof-of-work blockchains. The process allows decentralized network of miners to confirm transactions and record them on a ledger which is stored on a block. Every miner is rewarded for their part in the process with the ‘block reward’ which is shared between the pool of miners. The sharing of the reward is determined through the PoW algorithm. This incentivized miners to obtain more powerful machines, application specific integrated miners (ASICs) to mine more than the ordinary CPUs and GPUs can.
This is a problem as these machines are affordable to a selected few causing the mining of BTC to be reserved for oligarchs. This problem was one of the reasons Monero halted ASICs from mining XMR. Decred network came up with a governance system to ensure that mining is done fairly by all members of the community. The network brings about an egalitarian approach to mining through its hybrid consensus mechanism combining the best of Proof of Work (PoW) and Proof of Stake (PoS). The hybrid network has superior qualities that enhance both the pure PoW and pure PoS consensus mechanisms.
Proof of Stake Governance
Its parent company, Company 0, established the network with a purpose of governance as well as a faster, scalable network to better payment systems across the globe. The Decred PoS allows DCR token holders to gain incentives of around 1.8% per month for ever token used to vote on the network proposals. These rewards and voting protocols allow users on the platform to have a direct say on the developments on the network while staying incentivized. These DCR Stakeholders exchange their tokens for a ticket which is then placed for a random draw to be one of the 40,000+ allowed to validate. In Decred, 60% of newly generated tokens go to the PoW miners, 30% to PoS voters, and 10% towards a development subsidy whereas for Bitcoin, 100% of the reward goes to the PoW miners.
Decred (DCR) fell a short while after its meteoric rise to dip to below $80 later on Wednesday leaving investors with the feel it was a pump scheme on the coin’s market. The coin has however rebounded to $85, a 20% daily increase on the token. The coin is currently ranked 38th on Coinmarketcap with a total market capitalization $570,191,697 USD placing it two spots higher than it started the day at. The intra-day trading volumes stood at $28,365,200 USD.