Coming soon: Stable ticket prices and the first on-chain user voted hard fork in history!!

river split

Last month Decred stakeholders voted in favor of a hard fork to replace the current stake difficulty (sdiff) algorithm – aka the ticket price algorithm. As a consequence the new sdiff rules will automatically activate at block 149248 – some time tomorrow. However the hard fork itself will actually happen a few hours later when the next sdiff retarget occurs at block 149328 (see voting.decred.org for up-to-date details of the time remaining).

 Why is the current ticket price algorithm being replaced?
The current sdiff algorithm generates a large variation in the range of ticket prices. For example, in the last week prices have been as low as 44 DCR, and as high at 229 DCR. This oscillation in ticket price results in a scramble to purchase all 2880 tickets during the low price window, and then no ticket purchases in the following three higher price windows. Competition to purchase tickets during the lower price interval has lead to stakeholder fee wars, making ticket buying a less pleasant experience.

 What benefits will the new sdiff price algorithm bring?
The good news is that the new sdiff algorithm means more stable ticket prices! From simulations, it is expected that the new sdiff algorithm will maintain prices within an approximate range of 50 – 70 DCR. This will make ticket buying a much easier and more enjoyable experience. As you can see in the below image, ticket prices have now began to stabilize as stakeholders are already beginning to buy tickets across a range of intervals in anticipation of the imminent sdiff change. Once the new algorithm comes into effect you will be able to buy tickets more regularly during any interval, without paying excessive prices. Plus, lower fees means a higher profit margin from staking rewards!

ticket price

Resolving the sdiff algorithm issue is a prime example of how the user activated hard fork voting system allows Decred to quickly adapt to any problems that arise. It is another historic moment for Decred, and another blockchain first. The first on-chain user voted hard fork in history. However, with Lightning Network development now underway and a host of other improvements planned on the roadmap it definitely won’t be the last!

 

Reminder: If you haven’t done so already, please upgrade to v1.0.5. All nodes pre v1.0 will be forked from the network (visit decred.org/downloads).

The Value of Decentralized Governance

btc dcr decision making 6

“The many, of whom none may be individually excellent, nevertheless can, when joined together, be better than those [the excellent few]” – Aristole

Many Decred newcomers ask the same questions. Why Decred? Why decentralized governance? What benefits does Decred have compared to other cryptocurrencies? What’s so important about decentralized governance? This article explains a few of the reasons why Decred’s decentralized governance system is so valuable.

In the last few years it could be argued that the greatest threats to the two most valuable blockchain networks (by market cap) were entirely down to the absence of decentralized governance. Last year the Ethereum blockchain forked into two, because there was no real governance system in place to enable the community to agree on how deal with the DAO hack. Now Bitcoin is going down the same road. There is no end in sight to the Bitcoin civil war, purely because there is no decentralized governance system in place to allow the community to make a collective decision on the best way forward to scale the network. As a consequence, a split in opinion now looks like it might result in a split in the Bitcoin network too.  No one really knows for sure what will happen when SegWit2x or BIP 148 is implemented in the coming weeks. However, it is possible that the consequences of these actions may jeopardize the security, stability and value of the network.
A recent report by the World Economic Forum highlighted a number of blockchain governance challenges. It suggested that if the blockchain revolution is going to reach its full potential, an effective governance solution is needed. The report stated that “we need to figure out new decentralized governance systems that can be easily deployed on top of these decentralized infrastructures”. It seems decentralized governance is emerging as the most important component of a blockchain network.

What are the main benefits of blockchain technology that make it so valuable?
Blockchain technology is revolutionary because it disintermediates the storage and transmission of value. It enables two parties to privately make an exchange without the oversight of an intermediary. Furthermore, because blockchains networks are decentralized, they have no central point of failure, which means they are also more secure against malicious attacks and censorship. Therefore in my opinion cryptocurrencies are valuable because they offer the world a secure, decentralized, private and censorship resistant way to store and transmit value, without the reliance on a third party. The more secure a blockchain is, the more valuable. The more private it is, the more valuable. The more decentralized and censorship resistant it is, the more valuable. However, if a blockchain is not built upon the foundations of decentralized governance then I believe it isn’t truly secure, decentralized, or censorship resistant. In which case, it is also less valuable.

Decentralized governance prevents centralized decision-making and censorship
The first, and most obvious issue with centralized decision-making, particularly in a decentralized system, is that decisions made by central authorities may not be in the best interests of the wider network and users. In contrast, centralized decisions may be self-serving. If anything, the current Bitcoin civil war shows that the miners hold a large amount of power in the network. It’s evident that some miners are reluctant to implement second layer scalability solutions due to fears they will reduce the amount of fees they earn from on-chain transactions. This decision does not serve the users. It serves the pockets of the mining companies. Therefore, in effect, this decision has excluded many users in developing or poorer countries from using Bitcoin. Users who earn less than $1 a day simply cannot afford to pay a $5 transaction fee to make a payment. This is disappointing, especially since these are the people that need blockchain technology the most. In my opinion this action is no different from your bank putting up the cost of a money transfer fee.
Another problem that comes with centralized decision-making is censorship. Blockchains need to be able to keep up with change, meeting new and unforeseen user demand. Therefore, they need the capability to adapt, evolve and progress over time. Unless there is a fair and effective decentralized governance system in place that enables the community to reach a majority agreement on changes that effect the network, there will always be a faction of people who have their opinion censored by an opposing group or centralized authority, who in turn end up enforcing their opinion on the entire network. As we have seen in the past with Ethereum and currently with Bitcoin, the consequence of this sort of action can lead to chain splits and infighting. In contrast, Decred’s decentralized governance system devolves the decision making process amongst the entire community, giving all stakeholders a say in the decision making process. Everyone has a voice, and it won’t be censored by a central decision maker.

Decentralized governance utilizes wisdom of the crowd
Although the primary benefit of Decred’s decentralized voting system is giving stakeholders a voice, collective decision-making also has a few additional and perhaps unexpected benefits. There is some evidence to suggest that the aggregated decision of a large group is as good as, and often better than, a decision made by an expert alone. This is often referred to as the ‘wisdom of the crowd’. Historically is has been utilized in the courtroom, where judgement is devolved to a jury. However, more recently blockchain technology is creating new use cases, such as decentralized prediction markets.
I think a simple and easy to understand explanation of how wisdom of the crowd can be utilized effectively is the ‘who wants to be a millionaire’ game show example. Contestants on the show can ‘ask the audience’ what they think the correct answer is. Even though the audience is not made up of experts, on average they select the correct answer 91% of the time. So when Decred stakeholders were asked the yes or no question “change stake difficulty algorithm as defined in DCP0001?”, the wisdom of all the Decred stakeholders who participated in the vote was consulted. In turn this ensured the right decision was made to achieve the best outcome for the Decred network.
Now that Decred’s hard fork voting system is up and running, all future changes that affect the network will essentially utilize wisdom of crowd. This will only bring greater security to the network by ensuring correct decisions are made for consensus changes.

Decentralized governance enhances network security
More often than not, when people talk about how secure a network is they are relating to the networks ability to maintain resilience against a malicious attack, such as denial of service, or a 51% attack. However, the social and political stability of a blockchain network is often overlooked.
As mentioned earlier, without a decentralized governance system a divided opinion may result in a divided blockchain, which would consequently impact upon the security and stability of the network. Is SegWit2x safe? What happens if BIP 148 doesn’t get enough support? If the Bitcoin network forks, what chain will the value move to? In any case, these uncertainties are likely to have a negative impact on the value of the Bitcoin network. So in addition to the uncertainties around network stability following these actions, a drop in network value would also make it less costly to launch a 51% attack. Although hypothetical, should a nation state wish to try and bring down a blockchain network, it would make sense for them to launch a social, political and psychological operation to bring down the network value first.
Decred’s decentralized governance system helps prevent all these kind of attacks. Lead developer Dave Collins gave a great explanation of how resilient Decred is against a 51% attack compared to Bitcoin earlier this year. In summary, because all blocks created by proof-of-work (PoW) have to be validated by proof-of-stake (PoS) vote in Decred’s unique hybrid PoW/PoS governance system, you would need approximately 455 million USD to attack Bitcoin, whereas you would need roughly 2.03 billion USD to attack Decred!  You can read the detailed version of the explanation here.

Decentralized governance allows unlimited progression and scalability
Most of the present scalability discussion revolves around the technical mechanisms available to increase the network capacity. But as mentioned earlier, this is not the real problem. Scalability solutions already exist. The issue lies with the ability to actually decide upon and implement a scalability solution.
This is where Decred’s decentralized governance system shows its strength again. Bitcoin has been trying to scale the network for almost 3 years. In comparison, Decred voted to integrate the Lightning Network in less than a month.
Decred’s governance system hands the decision-making process over to stakeholders, allowing everyone to collectively agree on which new enhancements to bring to the network via the on-chain hard fork voting system. Once the public proposal system is implemented in the coming months this will only further empower stakeholders. The proposal system will allow users to put forward ideas to be voted on in the next voting agenda. So whether this is bringing the Lightning Network to Decred, deciding to integrate the absolute best privacy-enhancing feature available, or maybe upgrading the networks smart contracts. The opportunities are endless. What’s more, if another cryptocurrency brings something new to the table, stakeholders can simply vote to bring it Decred too.

Whatever the future holds, Decred can adapt and evolve to meet its demands. This is all made possible because Decred is built on the foundations of decentralized governance. Progression will never stop, as long as stakeholders vote for it!

Visit the offical Decred website for further details. Join in with the discussion on Slack, Reddit, or the Decred Forum, and don’t forget to check out the Decred Assembly YouTube show!

Decred disintermediates banking AND the central banking process!

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The cryptocurrency revolution started in 2009 when Bitcoin first introduced its peer-to-peer electronic cash system. It was the first decentralized network to offer people a secure and convenient way to disintermediate both the storage and transmission of value. In other words, if you hold your own private key you can securely store Bitcoin in a wallet, or send it to a friend without the involvement of a third party. Unlike fiat currencies that are subject to government decisions and the control of banks, cryptocurrencies have no central point of failure, and there is no central authority that can tinker with the monetary system – is there?

It’s clear that Bitcoin has done a good job of disintermediating the storage and transmission of value, or what we know today as ‘banking’. However, while the Bitcoin network is decentralized, its decision making process is not. Bitcoin has no governance system that allows its users to voice their opinion on decisions that will effect the network – their bank and their value. We now know this creates a number of problems.

At around three transactions per second the Bitcoin network has become congested, and this month the average fee for each of these transactions has reached a high of $5.50. Transactions are now slow and costly. If cryptocurrency really is going to disintermediate banking and remain an efficient method of transmitting value this just won’t do.

For the last three years all efforts to resolve this issue and scale Bitcoin have been unsuccessful. Not because the technology to make sufficient improvements is unavailable, but because there is no governance system in place to allow the decision makers for the Bitcoin network to reach an agreement.

Bitcoin’s decision makers are development teams, miners, and companies such as merchants and exchanges. As I have mentioned in a previous post; Bitcoin companies (https://coin.dance/poli), and mining pools (https://coin.dance/blocks) signal their support for specific Bitcoin Improvement Proposals (BIP) put forward by development teams – notably Bitcoin Core or Bitcoin Unlimited. The best option currently available for users to voice their opinion is to run a full node in support of a BIP. However, for many users around the world this is simply not possible. Some people just don’t have the computing capacity, resources or technical ability to run a full node.

I think it’s fair to make the assumption that the vast majority of Bitcoin users want both cheaper and faster transactions. But without an effective governance system in place to give users a say in the decision making process, it leaves them completely reliant upon the centralized authorities described above to make decisions on their behalf (a somewhat ineffective Bitcoin central bank). However, as with decisions made by central banks around the world, these decisions might not always represent the wishes of the people. In contrast, decisions may be self-serving, and therefore they might not be made with the best interests of users in mind. For example, some Bitcoin miners are reluctant to implement second layer scalability solutions, due to fears it will reduce the amount of fees they earn from on-chain transactions. As a consequence, Bitcoin users now have to pay a higher fee to wait for a longer period of time for their transactions to be confirmed. What happens when we arrive at the next hurdle?

Decred’s decentralized governance system solves this problem. Not only does it disintermediate banking, it goes one step further and disintermediates the central banking process too. Decred’s hybrid proof-of-work/proof-of-stake governance system allows stakeholders to collectively make decisions regarding any changes to the Decred network via an on-chain vote. This therefore removes third parties from the ‘central bank’ decision-making process needed to govern the storage and transmission of value.

In my opinion an effective governance system is now proving to be the most vital feature of a blockchain. Governance is necessary to enable users to fully participate in decision-making. It prevents chain splits (as seen with Ethereum), and political deadlock (as seen with Bitcoin).

Decreds decentralized governance system is enabling it to rapidly adapt, evolve, and progress. As a consequence, I believe Decred is now beginning to separate itself from the rest of the pack. With the number of new features planned on the 2017 roadmap, and the current rate of development, I only see the gap getting bigger.

Furthermore, with the recent integration of Decred on Exodus it has never been easier to store and transmit value on the Decred network! And since stakeholders have also voted to integrate the Lightning Network, those transmissions will soon be even cheaper and faster!

Be your own bank. Be your own central bank. Join the Decred community!

 

P. S. Why not try and solve the new Decred ‘Exodus’ puzzle – with a prize of approximately $6000 up for grabs! Visit https://www.exodus.io/decred/ for details and the Decred #puzzles Slack channel to join in!

I propose it’s DCRTIME!

dcrtime

As most of you know, Decred astronauts have recently successfully landed on the Moon. The landing coincided with the release of the first ever on-chain user activated hard fork (UAHF) voting system, and the subsequent vote in favor of bringing the Lightning Network to Decred. However…we are not stopping at the moon! The Decred team always strives for constant improvement and progression through the development and integration of new and innovative technologies. In preparation for any unexpected warping of space-time while traveling at light speeds during the next phase of our journey, new enhancements are being added to the Decred rocket!

As set out on the 2017 roadmap, Decred will soon launch the proposal system, in an effort to allow users even greater participation in the governance of Decred. The proposal system will enable stakeholders to put forward their ideas to be considered for inclusion in the next voting agenda – a further step towards Decred becoming a fully functioning stakeholder-directed Decentralized Autonomous Organization (DAO).

Today, Decred developers have announced the details for the first part of this proposal system, dcrtime a blockchain-based timestamping service! Dcrtime is a result of collaboration between Decred developers; Marco Peereboom, Jake Yocom-Piatt and Dave Collins, and is born from the desire to achieve maximum accountability and transparency throughout Decred’s governance system. The service draws upon the excellent work of Peter Todd, who launched opentimestamp earlier this year.

The implementation of dcrtime means that all proposals made by Decred stakeholders will be timestamped on the Decred blockchain. In turn this will enable stakeholders to submit their proposal for consideration safe in the knowledge that should it be removed or censored, dcrtime will provide them with proof of censorship.

However, the good news doesn’t stop here! In addition, anyone will be able to make use of the free public time stamping service provided via dcrtime, for a range of purposes! Dcrtime will run hourly, on the hour.

Decred believes that the voice of its users really matters, and as such it will always be heard. With the introduction of the proposal system and dcrtime that voice will be forged into the Decred blockchain, forever. Make your voice heard – join us!

For further details please see the official Decred announcement here, and to join in with the discussion please visit the Decred Forum or Slack!

Decred: Where did it all begin?

A poster-size image of the beautiful barred spiral galaxy NGC 13

“The beginning is the most important part of the work” – Plato.

Amongst our community the true origins of the Decred project is to some extent, a mystery. There are many black holes in the beginning of the Decred story. Its foundations are shrouded in secrecy. One thing is clear – the Decred founders and developers value privacy and anonymity. It seems they have no interest in being in the spotlight. Instead, they believe in the power of open-source projects and in the strength that a community can bring; the recognition that success doesn’t come from one person, but from many. That’s why everyone is welcome and encouraged to contribute in the Decred project.

As a community we set out to put the pieces together – where did it all begin? Our obvious starting point was to identify who founded Decred, and when. It turned out this was not so simple! Many within the Decred community assumed that the current project organizer, Jake Yocom-Piatt, founded Decred right from the start. However, after doing a little digging, it appears this isn’t the case. In this story, we’ll uncover how the cypherpunk roots of the Decred Project run deep.

The very origin of the project can be traced back to April 2013, when an unknown person going by the name of tacotime responded to a thread on Bitcointalk titled ‘Want to make an alt coin that actually changes something?’ On April 3rd 2013 tacotime replied, stating that they have had something in mind for a while, but they needed people with the time to code. Shortly after, tacotime started a new thread and published the whitepaper ‘Memcoin2 (MC2): A Hybrid Proof-of-Work, Proof-of-Stake Crypto-currency’. MC2 extended and combined the principles of both Litecoin and Peercoin, and was developed using btcd (the platform created by Decreds current developers).

Tacotime spent most of 2013 trying to co-ordinate the project and funding alongside its organizer, another unknown individual, _ingsoc. As far as we know, no one knows the true identity of _ingsoc, but what we do know is that their involvement and influence in MC2 and Decred was, and still is, fundamental to the success of the project.

Soon after Memcoin2 was renamed to Netcoin, before shortly reverting back to Memcoin2 again after another ‘Netcoin’ was introduced causing some confusion. Towards the end of 2013 tacotime then began the search for a lead developer to get the MC2 project off the ground.

However, surprisingly, at the start of 2014 it appears that tacotime also began work on another popular cryptocurrency – Monero. Along with a number of other contributors tacotime forked Bytecoin, into Bitmonero, and then Monero. Most of the Memcoin2 community thought tacotime had stopped working on MC2 for good, but unbeknown to them he had still been secretly coding away, continuing with the project behind closed doors.

In early 2014 _ingsoc approached Company Zero (C0) and CEO Jake Yocom-Piatt with tacotime’s MC2 concept, merging efforts to develop the Decred system. They were drawn to the development team’s talent and efforts in Bitcoin development. But they also shared a lot of their philosophies of collaborative governance and pushing for alternative systems – not at the expense of Bitcoin, but as an extension of technology.

At that time C0 was named Conformal Systems, an open-source software engineering firm that focused on a range of privacy and security orientated solutions. These included Cyphertite (zero-knowledge cloud storage) and Coinvoice (a Bitcoin payment processor). But the team were primarily focused on the development of btcd, an alternative full node Bitcoin implementation written in Go (golang), which was eventually migrated to btcsuite in 2015. The btcsuite infrastructure is highly regarded in the cryptocurrency community and used by many of the space’s leading developers including; Ethereum, BitGo, Factom, OpenBazaar and the Lightning Network team.

On November 30th, 2015 C0 published an opinion piece outlining Bitcoin’s biggest challenges: governance, funding and proof-of-work miners having too much power.  In it Jake suggested that Bitcoin’s greatest challenge relates to its governance. He highlighted the long-running scaling clash between development teams and miners. A clash that has only gotten worse, and is still continuing today almost two years later. Jake recognized the power that miners have. Whether this is creating a denial-of-service by mining empty blocks, censoring transactions by explicitly not including them in blocks, or hindering new consensus rules from being implemented.

The miners might have one idea, while development teams and exchanges have another. But because Bitcoin has no decentralized governance system, there is no way everyone can agree on a formal way to progress the blockchain. Perhaps the most important thing Jake highlighted was that the actual holders and users of Bitcoin have no say in any decisions about the future of Bitcoin.

In their post Jake and C0 also suggested that the way Bitcoin is funded could also create problems. They recognised that the funding of Bitcoin Core developers by outside entities, such as Blockstream could create real and perceived conflicts of interest, bringing into question the extent that outside entities can exert influence over Bitcoin. For example, “the trouble now is that these same developers have a financial interest in keeping the 1 MB block size to drive usage of side-chains, so even if their genuine personal opinion of the 1 MB cap changed, they are very unlikely to share that opinion publicly. This means that external observers cannot differentiate between genuine actions and self-interested actions by those developers.” Jake concluded that “the only reasonable way to make real progress on these challenges is to create an altcoin that implements the proposed solutions.

Shortly afterwards on December 7th 2015 C0 published another post ‘Iterating Bitcoin,’ which proposed a solution to the above problems. Jake stated that “in order to create a sustainable system of governance, we have created a project constitution and extended the notion of consensus hybridization to apply more generally as one of several layers in a stratified consensus system. This stratification allows various groups of stakeholders to have representation at various consensus layers. Beyond a layered hybridized consensus system, we have added a consensus rule that allocates 10% of each block reward to a development fund that will be used to pay for ongoing development and related activities. By allocating 10% of each block subsidy to the development fund, continuous development and improvement of the software is possible without the conflicts of interest present in current Bitcoin Core (BC) development process”.

On December 12th 2015 the solution to the problem was born – Decred. C0 announced that Decred will be an “open, progressive, and self-funding cryptocurrency with a system of community-based governance integrated into its blockchain” with a “hybridized proof-of-work proof-of-stake (PoW/PoS) consensus system that aims to strike a balance between PoW miners and PoS voters to create a more robust notion of consensus.” A project that brought forward the theoretical proposals of MC2. It is believed that the name Decred was thought of by tacotime, while brainstorming with _ingsoc and Jake on the topic of “decentralized credits”.

Three days later tacotime submitted his last ever post, on the MC2 thread. Tacotime posted “The descendant of this system is here: https://bitcointalk.org/index.php?topic=1290358.0 – Closing this thread.” Tacotime continued to contribute to Monero until late 2016, and is still listed on the Monero core team. But he has since disappeared. Some suspect that tacotime may be contributing to Decred under a different alias; however, the truth is – no one really knows.

Finally, on the 8th February 2016 the Decred mainnet launched, and with it the Decred constitution. A set of binding rules and guiding principles that were established to create an equitable and sustainable framework within which to achieve Decred’s goals.

When the constitution was written the mission of the project was “to develop technology for the public benefit, with a primary focus on cryptocurrency technology”. This is something I believe still holds true. However, since then Decred has evolved into something that now means many different things to many different people. Everyone has their own reasons for becoming involved in the project. But it is clear that whatever these differences are, we come together to form a open, free and inclusive community that values governance, privacy and security – the guiding principles of the Decred constitution.

The foundations of Decred are solid. For a blockchain with a decentralized governance system this matters. Over time Decred has listened, learned, and adapted. It has a unique history, with links to Bitcoin and Monero. It is a cryptocurrency with cypherpunk roots, and an open and friendly community.

The origin story of Decred may have shaped us, but it’s now vital that we come together to focus on our future, where we aim to reach the global population. We are a cryptocurrency of the people, by the people and for the people. Everyone who reads this can make a positive contribution to the project, you can make a positive change. If you can add value to the project you will not only add value to your own holdings, you will be helping to create something that is capable of changing the world, for the better.

Decred has become a cryptocurrency that is progressive in nature. Its unique governance system allows it to rapidly evolve according the wishes of the stakeholders. The 2017 roadmap is now over 50% complete and Lightning Network integration is just around the corner. With the first ever on-chain vote in history almost finished one thing is clear – what becomes of the Decred project now, is up to us.

Decred Astronauts WANTED for work in the areas of Privacy and Smart Contracts!

decred wants you

Decred is quickly becoming a thriving open-source community. With the current voting agenda for ‘Lightning Network integration work to begin’ now over 50% complete, developers are already starting to discuss ideas for the other improved features scheduled to be implemented on the Decred Network later this year (see roadmap for details).

Funding has been secured for development work in the areas of privacy enhancement and smart contracts. If you have coding experience in these areas please contact @raedah on the #privacy and #smart_contracts channels on Decred Slack to find out how you can get involved.

Decreds unique on-chain voting system will allow stakeholders to decide on implementing the best privacy and smart contract technology available on the Decred network. Remember – we are pioneers. We are looking for people who can think big, think out of the box – think, outer space!

So, if you think you’ve got skills to work in these areas, and you believe you can add value to the Decred project then why not join the other Decred astronauts on-board the Decred rocket!

 

Decred dances on the moon at Consensus and refuels for interplanetary exploration at LIGHTspeed!

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As most people know, last month Coindesk reported Decred as the best performing cryptocurrency so far in 2017 (see the article here). In recognition of this success one of Decreds astronauts decided to perform a celebration dance on the moon – at Coindesks Consensus event in New York, the biggest blockchain event of the year! See the video here.

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However… the Decred community has bigger ambitions – why stop at the moon? Decred is a pioneer, therefore it’s been decided that this is only a temporary stop to refuel. Decred Moon Fuel was consumed and handed out at Consensus to anyone interested in boarding the Decred rocket. The holders of Decred have decided we are now going to push on to new realms with interplanetary exploration at LIGHTspeed! Voting for Lightning Network integration work to begin is now underway, with over 98% voting in favour! For up to date stats on the vote click here.

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The Bitcoin scaling debate has been a hot topic at Consensus (see the debate here). It is clear that the biggest risk to Bitcoin currently is its lack of decentralized governance to enable the community to resolve the scaling issue and move forward. It was recognized by some speakers at the event that Bitcoin only has “internal governance”… With talk of a hard fork in September it seems governance will be high on the agenda again.

So, now is the time, if you want to climb aboard the Decred rocket – join us!

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Quorum reached!

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In less than a week since voting began quorum has successfully been reached for both the ‘Start Lightning Network Support’ vote and the ‘Change PoS Staking Algorithm’ vote. Quorum is the minimum number of voters that must be present to ensure a vote is valid. Therefore this not only demonstrates that Decreds unique on-chain voting system is working successfully, without a glitch, but it also shows voter turnout is high, and that a large proportion of stakers are actively involved in the voting process.

So far the vote shows there is strong agreement amongst Decred holders, with current support levels at 97.88% in favour of the staking algorithm change, and 98.64% in favour of Lighting Network integration work to begin – way above the 75% threshold of support required for the changes to be implemented (for up-to-date statistics visit voting.decred.org or dcrstats.com).

vote progress

This is an exciting time for Decred. Going forward the efficiency and effectiveness the on-chain voting system will allow the community to quickly reach consensus on any proposed improvements in future. This will enable a nimble decision making process, creating a highly progressive and evolving cryptocurrency that I believe will be the envy of all others.

A great analogy of this was made by Decreds Community manager, Daniel (@CryptoMessiah) when he was on blocktalk a few weeks ago. Daniel likened Decred to Google, a highly innovative and progressive company, and suggested Bitcoin may end up like AOL, one of the early pioneers of the internet that failed to keep up with change. In my opinion Daniel is right, if a blockchain is not moving forwards to meet new demands of its users then its evolution will stagnate. Once the Lightning Network is integrated its smart contract functionality will open new doors and new capabilities for Decred!

It also has to be said that the smooth implementation of the on-chain voting system once again highlights the calibre and work ethic of the Decred development team. Without their innovation, skill and knowledge this blockchain first would not have been possible. Decred developers have now proven time and time again they can deliver on the goals they set out to achieve. Something that certainly bodes well for the future of Decred!

In my opinion, there is now only one option for someone who wishes to invest in a progressive decentralized blockchain. That option is Decred! Be part the future, or hold on to the past – the choice is yours!

 

 

VOTE FOR LIGHTNING!

LN

The first on-chain vote has successfully begun! Vote now for the Decred development team to begin work on Lightning Network (LN) integration. This marks a historic moment, and a blockchain first. For the first time ever people will be able to have a direct influence over the future of their own finances. Made possible only with Decred.

 

What is the Lightning Network?
The LN is a decentralized system for instant, high-volume micropayments that removes the risk of delegating custody of funds to trusted third parties. The benefits of these instant and scalable blockchain transactions are summarised below from lightning.network website.

  • Instant Payments. Lightning-fast blockchain payments without worrying about block confirmation times. Security is enforced by blockchain smart-contracts without creating a on-blockchain transaction for individual payments. Payment speed measured in milliseconds to seconds.
  • Scalability. Capable of millions to billions of transactions per second across the network. Capacity blows away legacy payment rails by many orders of magnitude. Attaching payment per action/click is now possible without custodians.
  • Low Cost. By transacting and settling off-blockchain, the Lightning Network allows for exceptionally low fees, which allows for emerging use cases such as instant micropayments.
  • Cross Blockchains. Cross-chain atomic swaps can occur off-chain instantly with heterogeneous blockchain consensus rules. So long as the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust in 3rd party custodians.

For a more detailed and technical overview of what the LN has to offer, see the official LN development team paper here. Or, see this article for a simplier explaination.

 

Why vote for LN integration on Decred?
Buy a coffee, instantly, with a near zero transaction fee! In the cryptocurrency community there is an obsession with comparing the effectiveness of a coins payment network against its ability to purchase a coffee – without the need to wait for a prolonged period of time for the transaction to be confirmed, or pay a transaction fee equivalent to the cost of the coffee itself!

With LN integration on Decred you will be able to buy a coffee, the transaction will be instantly confirmed, and the transaction fee will be exceptionally low. In addition, LN will allow Decred to scale its payment network to a level similar to Visa. Millions of people around the world will be able simulatiously purchase a coffee (or anything else) at the same time with Decred!

Decred is well on its way to becoming the ultimate cryptocurrency. A self-funded coin with an outstanding development team, an unrivaled decentralized governance system and a community that is second to none. If we throw in instant low-cost transactions with LN integration and privacy enhancement on the roadmap – can anything surpass the greatness of Decred?

DCR coffee

 

How to vote?
For a detailed guide on how to vote click here.voting-cycle-v9

Track voting progress
Once you have voted visit voting.decred.org or dcrstats.com to track the progress of the vote.

Progress

What are you waiting for!
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Blockchain Politics

shoal

The elections in Europe over the last few weeks got me thinking – if Bitcoin was a country, what would its democratic system look like?

If Bitcoin was a country then I think the development teams, Bitcoin Core and Bitcoin Unlimited, would be the political parties. Like political parties who are responsible for the maintenance and development of a country, the development teams are responsible for the maintenance and development of the Bitcoin network.

So, who elects these parties? If we are fortunate enough to live in a democratic society then ‘we the people’ elect those who we want to be in charge of our country. However, in Bitcoin it seems the development teams are instead elected by the Bitcoin companies, such as wallet providers or exchanges (https://coin.dance/poli), and mining pools that signal their support (https://coin.dance/blocks). Whilst I’m sure lots of Bitcoin mining pools and companies hope to make a positive change in the world, serving the Bitcoin community for the greater good, the main reason they exist is to make money. Most are backed by venture capitalists that want to see a return on their investment. Their ultimate goal is to make more money – from the Bitcoin users.

If I lived in a country where the political parties were elected only by large companies and wealthy investors would I by happy with that? Probably not! Everyone deserves the right to vote.

While I do believe the Bitcoin development teams have the interests of the users at heart, the users still don’t have a say, and they don’t get to vote for what changes they want to see implemented on the network. I think Bitcoin is amazing, it always will be. And I have no doubt its technology will benefit billions around the world for generations to come. But like other technology it is not without its flaws. Currently governance is one of them.

It makes me sad to see the recent fighting between development teams and miners. Because they cannot agree on a way forward to scale Bitcoin, the network is in danger of being outgrown by its user base. An infographic from Willy Woo (@dangermouse117) shows how the Bitcoin network has reached its transaction per second limit, and as a result the number of transactions waiting to be confirmed is steadily increasing. This week the total number of transactions waiting to be confirmed has reached an all time high of 162,790 (https://blockchain.info/charts/mempool-count?timespan=1week). If the number of Bitcoin users and number of transactions continue to grow then I can only see this problem getting worse. Unfortunately I don’t think SegWit is going to happen any time soon (http://segwit.co). A decentralized blockchain needs decentralized governance.

willy woo

Decred is the first blockchain to implement an on-chain voting system that set out to solve this issue. This is key in giving the Decred holders a voice. Its unique proof-of-work (POW) proof-of-stake (POS) governance structure also makes sure the miners cannot take control of the network.

Lately I’ve been hearing a lot of talk about another blockchain, Tezos, that is having an ICO (or TGE – Token Generation Event) on May 22nd. Following Decreds lead, Tezos is also attempting to implement a governance system and an on-chain voting mechanism. However, I was a little concerned after reading the below article about the ICO. It gave me the impression that Tezos is created by the wealthy, backed by the wealthy, and apparently, will be bought by the wealthy.

tezos

After reading he above article I thought I would do some more research into Tezos and its ‘governance system’, maybe I had drawn the wrong conclusion from the article. So I started by reading the Tezos overview document – I was surprised.

The document reveals that Digital Ledger Solutions (DLS), the company co-founded by ex bankers Kathleen and Arthur Breitman (the creators of Tezos) “sold tokens at a discount to ten entities from September 2016 through March 2017. Three of these entities were hedge funds with a specific focus on tokens. The other seven purchasers were high net-worth individuals, or federations there of, many of whom were also LPs of the hedge funds. Total proceeds of these sales came to $612,000 at an average discount of 31.48% over the TGE rate for a total of $893,200.77 in outstanding obligations”. Not to worry though, the document also states “No single purchaser represented more than 33% of the total amount”… And, the three hedge funds that have “a specific focus on tokens” only account for 42% of the overall funds raised from backers”…

Yes you read that right. These early backers will be allocated $893,200.77 worth of tokens at a 31.48% discount. In fact, it seems that before we even get to a crowdsale, where Billionaires are ready to swoop in, we already have a collection of high-net worth indivduals and hedge funds that have obtained a significant proportion of the tokens, and therefore voting rights! But don’t take my word for it. Do your own due diligence and read the Tezos overview document for yourself.

Whilst Tezos recognizes that “challenges around governance and maintenance often lead to stagnation, shortages, and political deadlock” and that “in the case of pioneers like Bitcoin and Ethereum, those challenges have manifested themselves in situations that put too much power in the hands of core development teams or miners”, they apparently do not seem to recognize the voting power they may be placing in the hands of the wealthy few.

In my opinion, for this reason an ICO is not suitable for launching a blockchain with decentralized governance. With the uneven distribution of wealth across the world an ICO risks immediately handing over control of the network to the wealthy. According to the below chart, approximately 45.6% of global wealth is held by only 0.7% of the population. I’m not sure how a blockchain governance system would work if say, over 45.6% of the tokens were held by a few wealthy individuals? Admittedly this is not the case yet, but with an uncapped ICO and billionaires like Draper chomping at the bit, it is possible.

wealth distribution

I continued reading the overview document and my attention was brought to Tezos’ POS consensus algorithm. I was surprised – again.

Tezos has a delegated POS consensus algorithm where stakeholders create new tokens by validating transactions. Whilst every token holder can participate as a delegate regardless of the amount they hold, the overview document states that “the higher the stake delegated to a given validator, the more often they will be called upon to create blocks”. From what I understand, this means that those investing larger amounts in the ICO would be at a distinct advantage over those investing smaller amounts. If larger investors (such as high-net worth individuals or hedge funds) participate as a delegate, then they would therefore be called on more often to validate blocks over a smaller investor. This would give them a higher profitability ratio when staking, and therefore greater return per asset (token) held. If I am reading this right it seems with Tezos the powerful become even more powerful and the wealthy become even wealthier.

In my opinion, if you believe blockchains need a decentralized governance system, and want your vote to count, then you might want to consider investing in Decred instead.

In contrast, Decred offers everyone who buys a ticket the same ratio of reward for staking (currently around 3-4% interest a month), regardless of wealth. Almost 40% of all Decred coins in existence are currently staked, which I believe is a sign of how much faith the community has in the Decred project. In addition, Decreds free air drop made certain that coins were distributed evenly to everyone who believed in Decred, irrespective of their wealth or position in society.

There is mention in the overview document that Tezos have decided to hold an un-capped ICO, like Ethereum did, to allow as many people as possible the opportunity to invest and “promote a widespread distribution of tokens”. However, while an un-capped ICO might of worked back in the day for Ethereum, when funds raised in ICOs came from mostly smaller ‘innovator phase’ investors, we are now probably in an ‘early adoption phase’ of blockchain technology. As a result much larger investors are purchasing millions of dollars worth of coins, snapping up large proportions of the total coins on offer in crowdsales. What worked in 2014 for Ethereum, a blockchain where decisions are made centrally by The Ethereum Foundation, might not be best for Tezos, who hope to have a blockchain with a decentralized governance system. My guess is that the average investor in the Tezos ICO will end up being a small fish in a very large ocean filled mostly with whales.

While I have no doubt that Decred does not have the perfect governance system in place yet – it did get things right from the start. For a blockchain with on-chain voting as part of its governance system this matters, for obvious reasons. And now the beauty of this means that Decred holders can vote to make its governance system even better!

To put things into some context: Decred launched with a free air drop of coins to a community that believe in the decentralized future of finance. Tezos is launching with a majority backing from hedge funds and seven high-net worth individuals. You decide which has the best decentralized governance system.

Decred is the first cryptocurrency to decentralize and distribute power to its holders and users, and the first that has taken steps to enshrine the values of democracy into its blockchain. In my opinion Decred is still the only real governance blockchain around. Decred is a blockchain with a government “of the people, by the people, for the people”.

This blog is based on my opinion only and therefore may not represent the views and opinions of the Decred development team, or the wider Decred community.