Decred | $DCR | Autonomous Digital Currency


Welcome back guys. So today’s video is about DeCRED, and I want to be forthcoming, I knew very little about this
project up until a few days ago. So that being said, I don’t hold any DeCRED, but I asked Twitter as usual and
got a pretty overwhelming response from people who wanted
me to cover this topic. I will admit that finding the
exact history of this project and where it started from
was a little bit difficult. The creators of DeCRED, which stands for
Decentralized CREDit, valued privacy and
anonymity so much that they themselves were
pretty private and anonymous. The current project lead
is Jake Yocom-Piatt, but he’s not the
project originator. The roots of DeCRED
started in April of 2013 when someone named TacoTime had
commented on a Bitcoin talk thread. He asked around to see if anybody
was interested in participating in creating an altcoin because he
said he wanted to make something that actually improved
upon the current systems. And this eventually
became Memcoin 2. At some point in 2014, the anonymous developers
reached out to Jake, who at the time was
the CEO of company 0. The company’s focus was privacy- and
security-based blockchain solutions, and at that time, the anonymous developers and
Jake started working together. In December 2015 the DeCRED
project was finally announced as an open, progressive,
self-funded cryptocurrency with community-based governance
built into its blockchain. And then in February 2016, the
DeCRED mainnet went live. Let’s talk a little bit about
distribution and how the coin was made. DeCRED was originally
funded by Company 0 and all of the expenses were paid for
by the developers out of pocket. The cost of developing the
project was about USD$300,000. And the DeCRED team figured the
best way to deal with those costs was to do a pre-mine as
part of the DeCRED launch. The pre-mine consisted of about 8% of the 21 million total
circulating coins. And that came out to about
1.68 million coins. This was split equally between
the compensation for the team, for paying back the company,
and for the costs of the airdrop. The airdrop was 840,000 coins. That was 50% of the pre-mine and
only 4% of the total DeCRED supply. The Current Market Cap for
the project is $703 million and that places it at number
48 out of the Top 100. The airdrop was
available for anyone and ran from January
4th to January 18th, although not all those that signed
up were allocated airdrop coins. As with most free events, there were some
dishonest sign-ups, so it took the team a little
while to weed through and get rid of the
fraudulent accounts. 2,972 people received
about 282 DCR for free. That totals about $30,000 today. DeCRED values technological
progress in just about any form, so the airdrop was really
tailored to finding people that were helping to promote
the crypto community. Something as simple as
tweeting about cryptocurrency would have made you
eligible for the airdrop. Part of the reason
they did the airdrop was that they figured that it would
help to get the coins out to people, have people start talking
and get interested, but it would also help to
decentralize the network and distribute some of the coins. And the DeCRED team made
sure to let everybody know that the participation of this
airdrop was unconditional meaning that the DeCRED team wasn’t
expecting anything in return. Normally pre-mines leave a bad
taste in people’s mouths, they think it’s a
little bit dishonest, but the DeCRED premine was
a little bit different because nobody received
free coins without paying in some way,
shape, or form. All coins owned by the
project developers were either purchased at a
rate of 49 cents per coin, or they were traded for
work done on the project. Let’s cover the
technology a little bit. This is where it gets interesting. DeCRED’s system uses a
hybridized Proof of Work and Proof of Stake system. And basically, what this
means is it just takes the better parts of
both of these systems and combines them into one. Their goal was to create balance for
miners and also for the average user. Just like in the regular system, Proof of Work miners are
needed to build the blocks that create the blockchain. The Proof of Stake miners are there
to make sure the Proof of Work miners are creating blocks
that are consistent with the desires of the
holders of the currency. DeCRED has set up a mechanism
for hard fork voting, and this prevents the hard forks from
becoming potentially dangerous. While a hard work is possible, DeCRED makes it so that the
users can vote on the hard fork before the changes
are implemented. And then upon passage of the votes,
those changes could go live. In fact, DeCRED just navigated the
first fully user-driven hard fork. The block validation times
are about five minutes, the fees work out to be something
like a fraction of a penny, and they have desktop wallets
for macOS, Linux, and Windows. So onto the specifics of
the consensus system. The mining is straightforward,
it works like Bitcoin, but the staking is where it gets
a little bit more confusing. The Proof of Stake system is open
to anybody that owns DCR coins, and you use those coins
to purchase tickets, and those tickets allow you to
participate in the governance of DeCRED. At the current rate, you need
to hold about 80 or 90 DeCRED to be able to purchase a ticket. Your ticket will need to be
mined as part of a block, and each block can only
hold about 20 tickets, so chances are you’re going to have
to wait a while for it to get mined. Or like most things you can pay a fee and have the
mining process be sped up. Once mined, your ticket will
have to wait 256 blocks, which works out to
be like 20 hours. And at that point, it
will be considered mature and it will be put
into the lottery pool. The lottery is designed
so that, on average, your ticket will get
picked within 28 days. There’s a 99.5% chance that your ticket
will get picked before it expires, and the expiration time
is about four months. If the ticket has not voted on within
its allotted time, it expires, and the ticket fee is lost, but don’t worry, the initial cost
of the ticket is refunded to you. However, the chances of the
expiration happening are about 0.5%. Once chosen, you’ll
help validate a block, and you’ll be rewarded with the cost
of the ticket and also staking bonus. The staking process encourages long-term
investment in the DeCRED project, and that’s because you’re DCR is
tied up for a couple of weeks. Luckily, there’s an option
to join a staking pool so you can have others
vote on your behalf. And pretty much that just means that you won’t have to leave your
computer running all the time. Stakeholder votes recorded
on the blockchain receive a 6% reward on each block and each block and hold
upwards of 5 votes, which means that the total
block reward is about 30%. Proof of Work receives
60% of the block reward, but that’s also dependent on if each
block is holding the max of 5 votes that are coming from the stakers. If say, three out of the
five votes are in the block the miner has the option to
wait possibly lose the block and hope that they fill
up the five votes, or mine it anyway and then just
not get as high of a reward. The combination use
of mining and staking means that everybody gets a vote, and everybody matters when it comes to making changes
or deciding the future of DeCRED. As seen with blockchains lately, hard forks can really
ruin a community, so DeCRED is really
trying to prevent that. Sustainability and longevity require
that 10% of the block rewards go to the DeCRED project itself and that’s just to help
for future development. Coming up in the future that
I’ve seen on the road map is improvements to the wallet and also the implementation
of the Lightning Network. Making the Lightning Network
function with DeCRED or really any currency for
that matter is a lot of work, so I was told by the team that
implementation is a few weeks out. I also saw that eventually, they would like to implement
privacy in some capacity. Onto the Cons. So currently, the only way to participate
in staking on the DeCRED network is if you hold 80 or 90 DeCRED. And as I was recording this DeCRED
was sitting around USD$107. So for the average person
looking to diversify or wanting to pick up the
coin because they think, “Hey, I can earn staking rewards,” that’s a pretty hefty price tag. But in comparison, there
are projects like Dash that have a much higher
entry level cost. Also, if you do not buy
enough to purchase a ticket, you could be waiting for your DeCRED
to receive award within four months. And then there’s also the
possibility of the ticket expiring. I know they said its 0.5%, but
it’s still kind of frustrating. I know that I myself
am really impatient and as far as staking rewards goes four months is a really long time
for the average person to wait. Don’t get me wrong, I
think the idea’s great. I think it’s a very fair concept. I just think that there’s a lot
of working parts involved. I saw chatter that in the future DeCRED may allow people to pool
their DCR with several parties so that they have
enough to buy a ticket and then obviously they would
get their ticket mined sooner and get a reward sooner it would just be less because the
reward would have to be split amongst all the
people in the party. I personally think that
that should be a priority for them to do because
I think that it’s definitely going to give
people more of an incentive to want to buy DeCRED and
buy into the project because they’re going to feel like they
can actually get something out of it. The pooling is a great way also to build a little bit
more of a community base. The last thing I noticed is that outside of the really
random wave of DeCRED requests that I got on Twitter I don’t really see much
talk about this project. Within Reddit or
whatever else I’m on, I see pretty consistent projects
and coins getting brought up, but I never really see
DeCRED that often. And it’s probably partially why
I didn’t know anything about it prior to this video. I think it’s a little weird
that it’s not that popular because considering what it’s doing
with the hybridize consensus systems, I think it’s a good resolution
to a lot of the issues that we’re having with
Bitcoin and everything else. So I’m just surprised to see that there
is not as much chatter about it. All in all, I think
it’s a great project. I don’t hold any obviously, because I didn’t really know much
about it until this past week, but I think that it’s definitely
something worth looking into if you want to diversify. A little housekeeping. I moved from Slack to Discord. I know I went from Telegram to
Slack and now I’m on Discord. I find that I like
Discord a lot better. It’s much easier to use. So pop over there. I’ll leave the links in the description
so that you can come say hi. And as usual, thank you guys for
watching, and I’ll see you soon.

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