What does Decred do?
Decred launched in February 2016 with the goal of acting as a truly decentralized cryptocurrency. While other cryptocurrencies suffer from disagreements (about scaling and other issues) that prevent progress, create hard forks, and split their communities, Decred offers a democratic process in which all of its users can vote on important decisions. By allowing everyone to contribute to important decisions (not just miners), the project hopes to attract forward-thinking users interested in fairness and the advancement of their technology.
What are DCR coins used for?
DCR are mainly used to transfer value between two or more users on the network.
DCR are also used in Decred’s hybrid consensus mechanism. The project uses both Proof of Work and Proof of Stake to verify blocks of transactions. Decred's block rewards are distributed between PoW Miners (60%), PoS Voters (30%), and a network development fund (10%). To participate in PoS Voting, users time-lock DCR to buy tickets. Five tickets are randomly selected to vote in each block. Tickets vote on open proposals for changes to consensus rules, and to approve the PoW reward. When tickets vote the DCR is unlocked along with a reward.
How can DCR coins appreciate?
With its sensible and democratic governance system, Decred may appeal to users frustrated with the decision-making processes of less decentralized cryptocurrencies. Wider adoption of the project will lead to higher demand for DCR since DCR are needed to buy tickets for voting.
Users that buy tickets to participate in voting on Decred earn ticket rewards when their tickets are chosen in Decred’s lotteries. DCR spent for tickets are not deducted from users’ accounts; they’re simply locked from spending until the purchased tickets are either chosen (should occur within one month, on average) or expired (which takes roughly five months). It’s estimated that if tickets are bought and used every month, users may expect up to 30% ROI on their tickets annually. This could be an excellent opportunity for passive income, which might attract more users and increase the demand for DCR.
What is the difference between Decred and its competitors?
Decred's main competitors are Bitcoin and Dash. When compared with Bitcoin, Decred offers a greater level of decentralization with its governance process, which promotes a fairer and more equal system.
When compared to Dash, Decred benefits from less expensive staking mechanisms which allow almost anyone to actively participate in its governance. However, once the platform gains wider adoption, this might be subject to change.
An interesting feature of Decred is its ability to assign an expiration time to transactions. If a transaction is not included in a block until its expiration time, it will be canceled.
