While the prices of most crypto assets continue their downward price action, a little-known altcoin Decred (DCR)challenged the currently effective market conditions on digital assets.
What is Decred?
Decred (DCR)is a hybrid cryptocurrency that uses the Proof-of-Work (POW/proof of work) and Proof-of-Stake (POS/proof-of-stake) consensus models, designed to provide a solution to the scalability problem affecting Bitcoin.
The platform is a small group; It uses hybrid consensus and on-chain governance techniques to ensure that the community cannot control the flow of transactions or make changes to Decred without the opinion of the community, or hard-fork. The development of the project is financed by a decentralized treasury.
This new approach to the challenges posed by hard forks could help Decred carve out a niche for itself in the increasingly competitive cryptocurrency industry.
When mining blocks in Decred, some of the rewards are given to POW miners, while stake voters receive another portion of these rewards. A third, smaller portion goes to the Project Treasury fund, a fund primarily used for the development of the protocol.
Decred also implements privacy using a code set called CoinShuffle++. Monero (XMR) or Zcash (ZEC) It is a platform that works on ways to implement it in simpler ways than other privacy coins.
Why did the price increase?
Recently, the Decred community voted on a proposal to reduce POW mining rewards from 60 percent to 10 percent to combat “malicious miners” with a history of price manipulation. Also, as a result of this change, the payout of the share voters would also be increased from 30 percent to 80 percent.
Decred’s project lead, Jake Yocom-Piatt, explained some of the motivation behind the update in a Twitter thread:
“The fact that a malicious mining cartel, instead of selling at market prices, could accumulate a large inventory of coins that could later be used as a weapon against positive price action was a hidden risk we found in Decred’s POW.
While this risk was specifically introduced with Decred, a similar strategy has probably been implemented for most of the noteworthy pow coins. People who care about power and justice should be aware of this hidden risk.
Both POW and POS have notable strengths, but we discovered that the possibility of a mining cartel pressing markets with its inventory is a major downside of POW that is often overlooked.”
pow and pos have been regular topics of discussion in the @decredproject as the result of a proposal to change the subsidy split between pow and pos and its imminent activation on-chain.
instead of slavishly celebrating pow, let’s take a moment to compare it to pos.
— Jake Yocom-Piatt (@behindtext) April 14, 2022
The markets seem to have responded well, with the DCR outshining most of the market and significantly outperforming Bitcoin and Ethereum.
Following these news, DCR was able to bounce from $56 to $80 local highs on Sunday before experiencing a correction, gaining 43 percent in just a few hours.
In the same time frame, Bitcoin (BTC) and Ethereum (ETH) were down 2.9 percent and 4.8 percent, respectively.
At the time of writing, DCR is changing hands at $65.95, up 11.5 percent in the last 24 hours.
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.