How close to Absolute Decentralization is Decred’s Unique Consensus Mechanism?

When compared to several other cryptocurrencies, the one of a kind consensus mechanism of Decred is considered quite close to the true decentralization. But why it is considered so? Are there any loopholes, or is it really true to decentralization? Let us explore this question in detail.

So what is Decred’s Unique Consensus Mechanism all about?

The decision making at Decred takes place with the help of hybrid Proof of Work and Proof of Stake. This structure comes into action with the help of an element which is not on the chain of Decred consensus mechanism. The element is called- Politeia. The ten percent of the points or the rewards earned through blockchain go into the Politeia treasury. It is only then through a system based on a referendum that Decred’s stakeholders (people who own Decred’s DCR tokens) go into the decision-making stage.

Those who own a minimum 100 DCR becomes eligible to participate in a lottery system where they can put their DCR on a stake. (Those stakeholders who don’t have a minimum of 100 DCR, have another option in case they are interested in voting. They can form pools with other stakeholders in order to go beyond the threshold of 100 DCRS, in order to become eligible for the voting process. This pooling process is called ‘ticket splitting.’) In lieu of staking their coins, the stakeholders are then granted the power to vote. They can vote along the miners. To strike a balance, in the same fashion as the miners are rewarded with PoW, the voting rewards the PoS voters some DCR tokens as well.

The spread and the decentralized structure is at the core value of Decred. With other Bitcoin core developmental structure on a mind, it is easy to feel confused and underestimate the amount of power the miners hold in Decred’s decentralized system. While clearing the air, Jake Yocom Piatt from Decred said-

“In Bitcoin, the miners hold all the power. Its governance is off- chain and ad hoc. We felt that as a stakeholder, you should have input on what happens. If you are holding a cryptocurrency and miners are making decisions that are not good for you that is unhealthy. We wanted to balance the decision making power between miners and holders.”

The Hash war and the Bitcoin Cash’s cold feet-

Back in 2018 when the second most controversial fork too places in the last decade of cryptocurrency, it put several who’s who against each other. (The first one was the fork from world’s most lag cryptocurrency- Bitcoin.) The hash war started because of the upgrade in the block size. For instance, Amaury Sechet, Jihan Wu & Bitmain, and Roger Ver from ABC got pitted against Dr. Craig Wright, Calvin Ayre and CoinGeek, SVPool, BMG Pool, Okminer, and Mempool from SV. School ABC won the constantly ongoing debate by the humongous amounts of hash power. The aggression this hash war generated among the participants revealed how Bitcoin cash was not decentralized at all.

The hash war also saw the formation of ‘Telos,’ a sophisticated fork of EOS. It got formed because the ex EOS developer- Douglas Horn disrobed the control of ‘whales’ on the network. As per the site- ‘,’ Horn was strongly focused to recreate EOSIO through “correcting the hyper-centralization of voting power.” According to Horn, the EOS decisions were quite easy to be affected by the EOS whales. He based his thinking on the fact that a group of twenty-one block producers made the decisions. Horn pointed at the well crafted difficult to point at- loophole in the Proof of Stake system. On a post on the Medium Horn said-

“What should a person do when they see something with amazing potential going down the wrong path — a path that threatens its ability to improve the world? Some people say to keep fighting within the system and trust that you can effect change. But in a system governed by voting, is it reasonable to expect less than 1% of the voters who control well over 70% of the voting power to choose the good of the network over their own self-interest? […]I felt that the promise of the EOSIO software was worth protecting and I believed the best way that I could protect it was by proposing a new form to exist alongside the original. That new form, Telos, could do things that the original could not because unlike EOS, Telos had not run an ICO where it accepted billions of dollars in investment.”

Clearing the air around the true decentralization-

The buss around the decentralization is often considered as a solution to most of the complex financial entropy based issues. But if we dig deeper, we will find that a handful number of stakeholders control most of the decentralized ledgers. Now when we again look back at the Decred’s hybridized consensus mechanism, we can proudly say that the decision does not lie singularly in either the miners’ hands or the whales’. On this Yocom Piatt from Decred further added-

 “A rolling lottery or sortition acts as a decentralization mechanism. While Proof of Work is a rolling lottery on hash power, our model adds an opt-in lottery on coins staked for decision making. By sacrificing short term liquidity, you gain the ability to participate in the decision making process and earn a reward.”

Lately, team, Decred has largely safeguarded its voting from the effects and possibility of forking. As per the site- ‘,’ one of the spokesperson from team Decred explained-

“Decred is an autonomous, community based digital currency. It was created in the spirit of open participation. This means that anyone can start contributing. We welcome individual contractors as well as small businesses and even larger corporations. We focus on getting done, and we maintain a high-quality standard for our products. Politeia- our new proposal system- will make it very easy for contractors to offer their services to the project. Ultimately it will be up to the stakeholders to vote either a Yes or a No.”

Further Decred has gained investments from the digital asset venture firms such as Placeholder. Chris Burniske said-

 “If anything was going to serve as an alternative digital store of value to Bitcoin, I think it would be Decred.”

Decred also attracted compliments from other sources too. For instance on 12th Jan, Michael Nye posted on his twitter handle-

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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