Decred
$107.95 2.67%
DCR · 196w

Decred Technical Analysis - Continuing upward momentum » Brave New Coin

The Decred (DCR) hash rate has increased substantially this year, and has continued in a strong upward trend. Price has also followed this upward trend, which began with a release of the DCR 2017 roadmap on January 9th.

DCR uses a hybrid Proof of Work (PoW) and Proof of Stake (PoS) model they have dubbed Proof of Activity (PoA). The PoA model attempts to satisfy proponents and critics of both PoW and PoS.

PoW favors those with high amounts of capital to invest in mining infrastructure and have access to low electricity costs or low scarce resource costs. The model attempts to incentivise distributed consensus, but has been subject to miner centralization.

PoW also has specific vulnerabilities, like a 51% attack, which allows majority hash rate or miner collusion on a blockchain to control the blockchain and the transactions. With some mining pools holding vast majority of total hash rate, this type of attack is not too far from reality, and has been a concern in the past.

PoS favors early adopters, especially when initial distribution is not fair or widespread. The benefits of PoS include decreased infrastructure costs and the ability for any user to realistically participate. PoS criticisms focus on problems with single signer consensus vs distributed consensus, allowing for “stake grinding” to favor yourself and your reward. This effectively allows a PoS miner to fork and create an alternate blockchain.

Pure PoS models also promote an artificial decreased supply by locking up large swaths of coins for extended duration of time in order to mine the block reward. From a speculative point of view, an artificially decreased supply also favors volatile market conditions due to lack of market participants.

Decred uses a hybrid system that blends both models. PoW is used to create the blockchain, while PoS Stakeholders vote whether the block is permanently added.

Stakeholders who have purchased tickets have the chanc...

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