Price: $76
Market cap: $522 million
Circulating coins: 6.8 million
Total coins: 21 million
Type: Cryptocurrency
Recommended exchange: Bittrex
Alternative exchange: Poloniex
Decred (DCR) is a pure cryptocurrency play, and I consider it one of the few legitimate bitcoin challengers.
The name Decred stands for decentralized credits. And this coin’s focus from the beginning has been to fix what’s “broken” about bitcoin.
Decred was launched in 2016 (before the current crypto craze) and utilized bitcoin’s code as a base to build on. However, the founders added a number of important features and tools that I believe make it a better fundamental coin than bitcoin (and more are being added all the time).
The thing that truly sets Decred apart is its proof-of-stake system (PoS). Decred combines the baseline security of bitcoin’s proof-of-work system with a functioning PoS to make a truly innovative hybrid coin.
What’s PoS? Essentially, if you’re willing to “lock up” your coins in a Decred ticket, you’re rewarded with more Decred. You can think of this “staking” system as a dividend reward for long-term holders who help vote regularly and help validate transactions on the network.
This fixes one of bitcoin’s biggest issues: the fact that the network requires volunteered servers called “nodes” to help process transactions. You lose money running them, but a lot of people do anyway – for now, at least.
Here Decred adds an incentive where bitcoin has none, and adds a reward for long-term holders in the form of more coins.
This staking system also provides ongoing price support, as at any given time, more than half of all circulating Decred is locked up in tickets.
One of the other unique features of Decred is its self-funding mechanism. Every block that is mined sets aside 10% of the reward for a development pool. In this way, “contractors” are paid in Decred for their contributions to the project.
It’s a simple but elegant solution to one of the oldest problems in crypto: how to attract and incentivize coders. You can read more about the contractor hiring process here.
Other projects, such as bitcoin, rely on volunteer developers. Such systems have unintended consequences. For example, critics of bitcoin say the coin has been “taken over” by a powerful company called Blockstream, which has consistently pushed for an approach that favors its business model (off-blockchain scaling). That’s a separate (and long) discussion, but the point is that Decred avoids these issues altogether by automatically setting aside funds for developers.
Upcoming Decred features include…
- Improved privacy
- Lightning network support
- Increased scalability
- Atomic swaps with more cryptocurrencies.
The tagline on Decred’s website is “an autonomous digital currency.” Autonomous means self-ruling, and it’s a fitting slogan. Decred is self-funded and has a decentralized governance system that’s working.
Google Trends
To gauge public interest in a cryptocurrency, I often use a tool called Google Trends. This allows me to see how often people are searching for Decred on Google.
In this case, it shows rising interest across the world in Decred. And a few related search terms, such as “buy Decred” and “Decred coinmarketcap” have recently broken out. This means they’re experiencing unprecedented search volume.
Here’s a snapshot of Decred’s recent breakout search terms.
Interest in Decred is clearly rising, and we know that search traffic generally corresponds with crypto prices.
How to Stake Your Decred and Collect Rewards (Optional)
For the time being, you need to buy a “ticket” to become a Decred stakeholder and collect staking rewards. A ticket grants the owner the right to vote on the direction of the project, help verify transactions and collect staking rewards. (Note: you can join a “stakepool” to make setup easier. The pool will vote on your behalf and pay out rewards to you minus a roughly 5% fee.)
The current price of a ticket is 84.95 Decred. (You can check the latest price here.) That means you’ll need to buy at least 85 Decred on an exchange, then transfer it to a Decred wallet to purchase a ticket.
Read about how to purchase your ticket on Decred.org.
Decred’s wallet options are available for view here. Under “Core Software,” you will see the options available. I recommend using “Decrediton” for non-technical people.
Downloading and installing “Decrediton” may take a while, depending on your connection speed.
Now you’ll need to choose a “stakepool.” You can see a list of options here. Choose one and sign up at the site. You will be granted an API key that you’ll need later.
Read more about how to stake here.
Note: The current cost to become a Decred stakeholder is around $6,468. If you choose to stake your Decred, realize that your coins will be locked up for an extended period in your ticket. You won’t be able to send, spend or sell them during this time.
Eventually Decred plans to allow “micro-staking” with smaller amounts of Decred. For now, however, staking is reserved for larger holders.
Active Ongoing Development
I’ve been watching Decred for a while now and have seen steady progress. Here’s a snapshot of its GitHub profile (where open-source projects are housed and maintained).
This indicates an active community of software developers. Just in the last month, all that activity has happened with its source code.
I also happened to see the team fix a bug report via Twitter within 18 hours, which is a great sign.
How to Buy
Decred trades on Bittrex and Poloniex. Of the two, I strongly recommend Bittrex if you have an existing account.
Bittrex is still not allowing new registrations, so if you don’t have an account, you can sign up for one at Poloniex.
If you don’t already have bitcoin, you’ll need to buy some on Coinbase, Gemini or a local exchange if you’re outside the U.S.
Then you’ll need to transfer it from Coinbase to Bittrex/Poloniex as described here.
Now, once you’re logged in to Bittrex, under “bitcoin markets,” search for Decred or the symbol DCR.
You can also use Ethereum to purchase Decred, but I recommend bitcoin since the market is larger and more liquid.
The Bittrex buying process is described in-depth on our site here.
Note: Poloniex is currently being flooded with users because Bittrex closed registrations. It may take a while to verify your new account, but I recommend getting the process started if you don’t have a Bittrex account.
Decred Resources and Links
- Decred.org
- Info on ticket price inflation
- 2018 road map
- How to stake Decred
- Decred stats (and ticket prices)
- List of stakepools.
Good investing,
Adam