Decred, codenamed DCR, is a new coin developed by several bitcoin core developers due to their dissatisfaction with the current situation of Bitcoin, especially the lack of good management and upgrade mechanism due to the monopoly of Bitcoin software development by the Bitcoin Core team. The highlight of DCR is the integration of community governance into blockchain technology, initiating democratic votes on technological and non-technological change through its blockchain-based voting system.
Specifically, DCR uses a hybrid PoW and PoS approach to mining and reserves a portion of the rewards for developers who develop new features in DCR software. Any DCR participant can propose new software features as needed, and the community votes on-chain to decide which features will be developed and when. These new features can be developed and submitted by any programmer, and a certain amount of DCR is paid upon approval. So DCR creates a self-contained, open, collaborative, and evolving digital currency community.
DCR mining, through the mill first processing trade, set up blocks, through continuous collision search, find meet certain difficulty after calculating the number of target, the network transmission, PoW’s work is done, mining process and COINS here, just a piece of time is half of the currency, a block, about 5 minutes. The next consensus mechanism is different. Bitcoin relies on the nodes of the whole network to verify the block, and ultimately the longest chain is the main chain. The mined block is valid if it ends up on the main chain, so whether the block is valid comes from the consensus of almost the whole network. The advantage of doing this is security, provided there is no attack of more than 51% of the computation power, and the disadvantage is obvious, that is, inefficiency. DCR introduces PoS to vote to decide whether the block just dug is valid or not. Each block is voted by a pseudo-random algorithm (Hash256PRNG) that determines the sequence according to the block header data. Only when at least 3 votes are passed can the block be recognized as valid and can be added to the main chain. Successful verification of the block will reward 30 new DCR coins, which will be divided into 60 percent for PoW miners, 30 percent for PoS vote holders, and the remaining 10 percent for programmers involved in software development.
The specific mechanism of PoS is that DCR holders lock a certain number of DCR to buy fresh votes. The votes have expiration time. If they are not selected to vote after expiration, they will all be returned to the currency they bought before. Each block will contain up to 20 fresh votes, which will not mature until 256 new blocks are created and have the effect of being selected to exercise the vote. To incentivize miners to include fresh votes in the mined blocks, there is an additional ticket fee, which is left to the miners as a reward. After maturity, if your vote is successfully selected to vote, the system will return the currency of the ticket plus a reward. Each block requires 5 mature votes to be randomly selected to verify the validity of the block. Ticket prices are adjusted every 144 blocks (about 12 hours), with the aim of limiting the entire vote pool to 40,960 votes.
Decred’s system improves block generation efficiency while ensuring security, monetary rewards reserved for developers guarantee development support for the software itself, and a voting system ensures that every decision is not influenced by a few people. This resulted in an efficient, democratic community of PoW miners, PoS equity holders and developers. In addition, Decred is also trying to establish hierarchical decentralized autonomous regulatory organizations to represent different voices in the community. In this sense, Decred is a currency with a deeper level of social experimentation following Bitcoin.
In terms of software architecture, Decred adopts modular design from the bottom, which has very good scalability and can easily add new features. In 2017, features Decred wants to implement include: hard fork voting, decentralized control of development reward funds, lightning network support, improved privacy, integrated payments, and more.
Decred’s mechanism design addresses some of bitcoin’s drawbacks and is promising because it has a fast-iterating gene that allows it to quickly follow up on new features in the increasingly fierce competition for digital currencies.