Decred cryptocurrency guide advises where to buy and how to buy Decred. This guide also contains the markets, value, trading, investing, buying, selling, transactions, blockchain, mining, technology, advantages, risks, history, legislation, regulation, security, payment, networks and many other interesting facts about Decred as well its status in the world of cryptocurrencies.
Decred, Sunday, 2021-04-11
- 1 What Is Decred?
- 2 Beginner's Guide to Decred
- 3 Where and How to Buy Decred?
- 4 Decred Markets
- 5 Where to Spend or Use Decred?
- 6 How Does Decred Work?
- 7 Decred Regulation
- 8 Is Decred Secure?
- 9 History of Decred
- 10 Decred Videos and Tutorials
- 11 See Also
What Is Decred?
Decred is a cryptocurrency designed to amplify decentralized governance on blockchain applications. The primary target of Decred is building a system that is fully anonymous, has improvements on the voting system, and it is enacted directly by its native coin holders and miners.
The cryptocurrency operates in many aspects like the Bitcoin. However, it features a lot of improvements because it employs a hybrid consensus model that facilitates striking a balance between miners and users. This model has been cited to have a huge potential of making Decred the next most powerful Altcoin after Bitcoin.
The Decred combines Proof-of-Stake and Proof-of-Work algorithms so that users can enjoy the benefits of both sides. This helps to facilitate equitable distribution of the Decred coins for enhanced security, stability and faster adoption.
Why Decred? What problem does it solve?
Governance in cryptocurrencies is the process of making decisions in their respective protocols. The need for a clear governance system became important amidst unending fierce debates, political firestorms, competing interests and splits. Take the example of Ethereum. At the height of DAO attack, the cryptocurrency governance system could not agree to a specific route to follow. Therefore, the core code had to be forked to create Ethereum and Ethereum Classic.
To maintain the idea of decentralization, the cryptocurrencies use distributed consensus methods that decentralize decision-making process. This means that all decisions are put into a vote. The rules of the respective protocol help to pool stakeholders for the success of the network without requiring a centralized management.
Though centralized governance has the advantage of being fast and depicts lower levels of conflict, it comes with very weak connotations of security, reduced trust, and susceptibility to power abuse. This is the reason why blockchain technology was developed.
However, even with blockchain technology, lack of appropriate governance has resulted in massive problems. For example, large miners who have more money to invest in advanced equipment with higher hashing power that makes them dominate some systems. These are some of the issues that Decred targets to address.
At this point, it is important to mention the community has demonstrated the strong preference for the Decred because it is considered an improved version of other networks especially Bitcoin. To put it differently, Decred is better than Bitcoin. Welcome to the cryptocurrency that is touted to have huge potential to replace Bitcoin.
Beginner's Guide to Decred
While many cryptocurrencies out there have very unique and appealing structures, they are lacking in governance. This is the reason that most of them have been reporting progressive forks because even minor issues are very difficult to resolve. However, Decred has become the new face of cryptocurrencies because of its unique and lovely governance structure. The system used at Decred is a hybrid of PoW (Proof-of-Work) and PoS (Proof-of-Stake) consensus model that ensures all users vote on decisions to be implemented in the network.
The unique model used at Decred has made its value to keep rising progressively and catapulted the network to the top 30 cryptos based on market capitalization by May 2018. With experts and the community indicating that Decred could easily become the next Bitcoin, it looks like the ultimate cryptocurrency to join. However, it is prudent to start by carrying a comprehensive review of the network to understand how it works. This is why this guide was developed.
The guide explores every component of the Decred network to determine how it works, its value, chances of becoming a major payment network, and security. It also looks at the risks, consumer protection and history among other things. Welcome to continue reading and discover more about Decred.
Where and How to Buy Decred?
When people think of joining cryptocurrencies, the first thing that clicks their minds is the expected ROI (Return on Investment). With a very committed team that has learnt from issues arising from previous networks, Decred looks like the ultimate cryptocurrency that people have been waiting for. For example, the price of Decred in February 10th 2016 was only $0.953 before taking a steady growth to $118 by 21st May 2018. This was a whopping growth of more than 12,000%. This is a very huge ROI to those who had the native coins.
First, you can mine the network using either PoW (Proof-of-Work) or PoS (Proof-of-Stake) system. However, the easier and more straightforward method is buying the Decred coins. Here is an account of where to buy Decred.
- Buy from cryptocurrency exchanges: Cryptocurrency exchanges are the primary digital asset markets that bring together sellers and buyers the same way forex markets operate. Note that buying from cryptocurrency exchanges requires users to open trading accounts and verifying them with government recognized information such as proof of location, phone number, and ID number. Some great examples of exchanges that list Decred include Bittrex, FEX, and Cryptopia.
- Buy Decred from those who already have them: The fast-growing popularity of cryptocurrencies has resulted to the emergence of cryptocurrency clubs. These are informal groupings that operate both offline and online to help crypto enthusiasts meet, share, and even trade different assets. The good thing with these clubs is that buyers are free to interact and agree on their terms and conditions for the purchase. Some great examples of these clubs include London Cryptocurrency Club and Avatar X.
Note that to buy Decred, you need to have a cryptocurrency wallet. To learn more about the cryptocurrency wallets that support Decred, take a look at the next section.
Are you planning to join the Decred network? Well, one thing you need to get right and have is a cryptocurrency wallet. This is the location that will hold your DCR after the purchase is through. Before taking a look at the list of the wallets that you can use with DCR, it is important to demystify the term crypto wallet. While the accepted definition of a Decred wallet is the location for holding your digital assets, the definition is a misnomer. The crypto coins do not leave their native networks even when being transacted.
What the Decred wallet stores are special codes that help to identify your DCR in the native network. The first code is the private keys. The code helps to call your coins to live when making transactions. Like the name suggests, the code is private and should never be shared with third parties.
The second code generated by a Decred wallet is the seed. The seed is a special phrase meant to help users regain their private keys in the case of a loss. In some cases, the wallets start by generating the private seed and require users to use it to generate the private keys. It is very important that the private keys and the seed are kept safely and away from the main computer. Think of writing the keys and storing them in a safe place away from the main computer.
The last code generated by the wallet is the public keys. These keys, unlike the private keys, can be shared comfortably with other users in the network. The public keys act like the address to your wallet. This means that those who want to pay you in DCR are given the public keys and not the private keys. The keys are also used by miners to confirm the transactions on the network.
There are five main types of cryptocurrency wallets that can be used to store cryptocurrencies. You can opt for desktop wallets, paper wallets, web-based wallets, and hardware wallets. To store your DCR, the recommended wallet is the Decred wallet. You can also opt to use Exodus wallet.
Where to Buy Decred with Credit Card?
Credit cards have become one of the primary methods of payment because they are accepted in most conventional and online marketplaces. So popular are the cards that even credit reference bureaus will insist on looking at your cards before calculating your credit score. Now, credit cards have also become the primary method of buying cryptocurrencies such as UpBit. If you want to buy with credit card from those that do not support credit cards, you have to start from another platform such as Changelly.
Where to Buy Decred with PayPal?
There is no method that can be used to directly buy Decred with PayPal. PayPal administration has for many years seen cryptocurrency networks as direct competitors. Therefore, it blocked any form of payment directed to such exchanges. Though PayPal has indicated that it will start allowing such direct payments, it appears that such policy changes might take a little longer. Therefore, those with cash in their PayPal accounts can only follow the longer route of withdrawing to their bank accounts or credit cards.
How to Buy Decred with Wire Transfer?
For many people, banks are their most trusted organizations. They process salaries, provide credit, and even financial advice. Now, they have also become very important entities for helping to buy cryptocurrencies directly from the exchanges. Here is the procedure and where to buy DCR with a wire transfer.
- Start with acquiring an appropriate cryptocurrency wallet. This will be the location for holding your DCR after the purchase process is complete.
- Select cryptocurrency exchanges that list DCR such as LiteBIT and UpBit. These are the markets that allow users to buy cryptocurrency assets such as DCR with a wire transfer.
- After selecting the preferred exchange, open a trading account and verify it with personal information. The verification details might differ depending on the selected exchange. You could also be asked to provide info such a phone number, date of birth, and proof of location.
- Buy the quantity of the DCR you want from the exchange and select pay with a wire transfer. Once you complete the transaction, it will take between two and four days for the fund to reach the trading account.
- Once the coins reflect in the exchange account, you will need to take one final step of moving them to your wallet. This is the location where you have absolute control of the coins. You could also decide to trade them for other coins.
Where to Sell and Trade Decred?
Do you have some Decred coins and want to earn more from them? One great method to consider is selling and trading in the exchanges. Crypto coins such as Decred are traded in the crypto markets that bring together buyers and sellers. Think of the trading platforms like the common forex markets but that deal with digital assets as opposed to fiats.
When selecting the platforms to sell and trade Decred, it is important to appreciate that the exchanges are the soft underbellies of the cryptocurrency industry. When reports of huge cryptocurrency losses hit the news, the chances are that they took place at the exchanges. For example, recent attack at exchanges such as Coinchek and Youbit resulted to huge losses. Youbit, a South Korean exchange, was forced to file for bankruptcy. This brings about the question; how do you pick the right selling and trading platform?
- Select the exchange that has been in the market for some time and demonstrated the capability to protect users’ information and assets. Make sure to check key security features such as 2-factor authentication and use of cold storage.
- Look for the platform that charges clients low transaction fees. If you go for an exchange that has very high transaction charges, the chances are that most of the profits will be galloped by the platform.
- A great exchange should have an easy to use interface, advanced trading metrics and good support. These parameters are important in helping to resolve all the issues that may arise when using the platform.
- To optimize profitability, only pick the platform that lists many assets. This will guarantee you of always having a profitable option to jump to in the event that the current one becomes less desirable.
Because of its unique architecture and great appeal from the community, very many exchanges list Decred. Some of these markets include Bittrex, UpBit, Fex, CoinEX, and Bleutrade.
How Much Are the Transaction Fees of Decred?
When cryptocurrencies joined the financial markets, one of the primary objectives was to help lower transaction costs. Because they work on a peer2peer basis, users are able to operate without involving centralized organizations such as banks. Decred has managed to pull down transaction costs to only a very small margin. Indeed, the transaction fee of $0.04 charged at Decred is lower than what even other cryptocurrency networks such as Bitcoin, Ethereum, and Dash charge.
Cryptocurrency markets are the trading points for cryptocurrencies. They have been growing steadily to keep pace with the rising demand. Here is a closer look at the top markets that trade Decred.
Bittrex is a US-based cryptocurrency market and among the oldest exchanges in the market today. It was started in 2014 by Bill Shihara (co-founder and CEO), Richie Lei, Rami Kawach, and Ryan Hentz with the sole purpose of making cryptocurrency trading simple, secure, and reliable.
The most outstanding thing about Bittrex is its focus on adhering to the local rules. This means that you need to open a trading account and verify it with your email address, phone number, and date of birth among other details. Though the exchange requires all of these details, transactions are completed in less than 30 minutes. If you are trading with an enhanced verified tier, it is possible to make deposits and withdrawals in fiats.
The exchange lists very many cryptocurrencies. There are more than 250 altcoins you can pair Decred with when trading on the platform. To ensure that users do not risk their investment, Bittrex carefully reviews all the cryptocurrencies before listing them. For example, Bitcoin Gold, a fork of Bitcoin, was considered a high-risk token immediately after release. Therefore, Bittrex put it under reviews even as other exchanges accepted to list the token.
The transaction fee at Bittrex is 0.25%. This is considered affordable and indeed better by far when compared to others such as Poloniex and Changelly that charges as high as 0.5%. However, the trading community has been calling review of the fees and lowering to less than 0.1%.
The biggest shortcoming of Bittrex is its poor customer support. Many people have been complaining that their requests and complaints have been taking a very long time before getting replies. Besides, only traders in higher verification levels are allowed to make deposits and withdrawals in fiat.
FEX (which operates the domain fexpro.io) is a Hong Kong-based market established with a specific target to the Chinese market. The FEX development team has won the hearts of the Asian Decred community and other crypto traders because of its focus on progressive improvement efforts. It also has a native token referred to as FEX.
The transaction fee at FEX is 0.2%. This makes it one of the most affordable markets for Decred traders. However, you need to appreciate that the fee can change slightly depending on the selected exchange. For example, trading ETH, LTC, BCH and ETC will cost you 0.2%. However, trading SC, DCR, and PIVX will cost you 0.25%. If you are trading FEX (the native token), the transaction cost comes down to 0.1%.
The FEX market boasts of a large list of digital assets that users can pair with Decred. Whether you prefer the more established coins such as Litecoin and Ethereum or newer options, you are sure of getting a profitable option at the market. Besides, the exchange provides advanced metrics to help you follow the markets and make the right decision easily.
The main shortcoming of the project is that it is very young. This means that its stability cannot be guaranteed. Besides, it does not allow fiat deposits. Therefore, the people who want to use the exchange but have fiat currencies have to start from another point such as CEX.io.
CoinEx is one of the fast upcoming markets today. It is based in Hong Kong and was started in December of 2017. The primary focus of the exchange is helping users to operate securely and affordably. In the coming days, CoinEx plans to build a decentralized exchange.
The biggest selling point of the exchange is its low transaction fee. Traders on the exchange are charged only 0.1%. This fee only applies to the takers. This makes the exchange one of the cheapest when compared to other platforms such as Bitfinex that charge 0.2% and 0.1% to takers and makers respectively.
Many traders keep coming back to enjoy the large number of cryptocurrencies listed in the network. This implies that you can opt to pair Decred with top cryptocurrencies such as Bitcoin Cash and Ethereum or emerging cryptos.
The biggest shortcoming of this market is that it does not support fiat currencies. This implies that users can only make pair Decred with other cryptos. Besides, it does not offer margin trading to users.
Value of Decred
The value of Decred has been growing steadily and thrust it to top 30 most valuable cryptos by market capitalization. On May 21st, 2018, the market capitalization of Decred was $843 million at a price of $118. This means that the cryptocurrency is far ahead of others such as Nano with a market capitalization of $630 million and Waves with $495 million. The cryptocurrency community is very optimistic that the value of Decred will continue growing.
Is It Profitable to Invest in Decred?
To invest in a cryptocurrency network, many people are interested in knowing how profitable it is. Since its creation, Decred has demonstrated its affinity for faster growth and yielding high returns on investment for users. Early in February 2016, Decred was trading at less than one USD. Then its price grew steadily to hit $118 in May 2018. This implies that in slightly more than 24 months, people who had invested in Decred were reaping more than 12,000% ROI. With the cryptocurrency community and blockchain solution experts indicating that this trend is likely to continue in the coming months, the profitability of Decred is likely to keep going up.
Other indicators that Decred profitability could edge even higher include its unique governance structure. Because it is viewed as a better network compared to other top networks such as Bitcoin, more people and even corporate organizations are developing a lot of interest in it.
However, even as you march to make the first purchase or raise the investment in Decred, it is important to appreciate that there are so many factors that can affect profitability. For example, if the governments pass harsh crypto related laws, Decred and other cryptocurrencies are likely to shrink or even cease existence. Therefore, you should invest with a lot of care, follow the developments in the crypto industry, and offload in time if you thing that a specific parameter is likely to affect Decred negatively.
Where to Spend or Use Decred?
Now that you have Decred, where can you spend them? Though Decred has been in the market for some time and working very hard to win more stores, only a few traders have come-out to openly accept it. These include pexpeppers.com, improvebrain.com and Coingate allied merchants. To grow even faster, the development team has to keep working on new partnerships.
Can Decred Grow to Become a Major Payment Network?
Yes, Decred can grow into a major payment network. Most cryptocurrencies out there are on a race to becoming major payment networks. Decred stands a good chance of becoming a great payment network because of its low transaction charges. By charging users only $0.04, more people especially traders are likely to prefer it compared to other more expensive networks such as Bitcoin Cash. Other things helping to edge Decred into a major payment network include faster transaction times and fast-growing community.
However, Decred need to intensify the efforts towards becoming a major payment network. Other networks such as Bitcoin and Ripple are already racing ahead Decred. For example, Ripple presents itself as a partner to banks so that they can come and use its network for processing payments. Decred need to also draw more traders and financial institutions with an aim of making them partners and not direct competitors.
How Does Decred Work?
The Decred network was created to enhance governance, make the system of addressing issues straightforwardly, and diminish the need for hard forks. This means that users in the network follow the protocol to vote for changes before implementation.
The Decred hybrid of Proof-of-Work and Proof-of-Stake protocols
The improved governance at Decred is accomplished via its unique voting protocol on its blockchain. The principle behind the hybrid system used at Decred is that every block has to be mined with the right nonce and get ratified by verifiers. This way, the hybrid system eliminates the weakness depicted by either PoW (Proof-of-Work) or PoS (Proof-of-Stake) when implemented individually. Like in the PoW, the miners still receive block rewards while staking verifiers also get rewarded.
The Proof-of-Stake application at Decred means that any person with DCR is allowed to participate in the voting system. Your DCR are converted into a ticket that is used to vote. Because every block contains 20 tickets, it implies that you have to wait until your block is mined.
After your ticket gets mined, the holder is considered immature and has to be held in the lottery pool for about 20 hours (until 256 blocks are passed). Then, you only need to wait for your turn. The chances of getting selected are 50% in every 28 days. Before the ticket expires in about 4 months, you have more than 99.5% of getting selected. After getting selected, you validate a block and get rewarded.
The staking model is meant to encourage people to hold long-term investment in the Decred project. Note that unlike other systems that require users to keep their computers on all the time, you can switch it off as long as the personal ticket is in the pool. Indeed, you can even join a pool that can vote on your behalf when your turn comes.
How ratification on protocol improvement is done
By combining the process of mining and staking, it means that all the people in the network (those with DCR and miners) can participate in voting on the need for improvements. Indeed, any person on the network can submit a proposal to help improve the network. Such a proposal has to go through the Decred Assembly, a Vetted group of Decred users, before being subjected to a vote. This section will also be brought to the blockchain in future. This will be achieved via proof of assembly where users will be able to directly vote on the project to get funding and even block rewards among others. A supermajority will be required to give such projects a go ahead.
After an improvement project is amply developed and tested, it is entered into the blockchain as a dormant code. Then, it will be voted and can only go live when voted and accepted.
Does Decred Use Blockchain Technology?
The Decred network employs blockchain technology to help users making payments to operate without going through third parties such as banks. Like Bitcoin, the Decred network has been very successful by focusing on a narrower target, sending value. This is the reason that the development team has managed to enhance its features and keep the network growing.
When a user initiates a transaction, it is taken over by the miners who are spread in the network. They follow back the public keys to check whether you have ample DCR to spend. Then, the transaction is confirmed and added to the next block and finally added to the public ledger. At this point, the transaction is permanent and cannot be reversed.
In future, Decred system also plans to use the Lightning Network. This is a system that works as an off-blockchain method of settling payment and reducing network requirements while improving processing speeds. It will require two users who regularly do business to create a third account where they can put equal amounts. Then, they can carry transactions by sending each other only promissory notes and the charges are deducted from the third account.
The term mining is the process of validating transactions and keeping it secure for a reward with DCR. The Decred system employs both Proof-of-Work (PoW) and Proof-of-Stake (PoS).
- Proof-of-Work Mining: In Proof-of-Work (PoW) the transactions are categorized into blocks. Under the system, you need to dedicate some computer resources (hashing power) that allow it to compete finding a nonce that lower hash below the Decred difficulty threshold. To increase your chances of confirming more transactions, you can consider joining a mining pool. Note that all the rewards you get via a pool are shared among all the members.
- Proof-of-Stake Mining: Unlike the PoW mining, PoS (Proof-of-Stake) mining does not need a lot of computing resources. Your DCR on the network are used to buy voting tickets. In every block, five blocks from the pool of live tickets are selected on a random basis to help vote on the validity of the previous block. The PoS (Proof-of-Stake) provides a new layer of decentralization that allows all Decred users to vote in the network changes. You can also join a pool and delegate your vote. This means that the pool can vote on your behalf even when you are not available.
What Are the Advantages of Decred?
When people look at cryptocurrencies, the primary anticipation is getting a platform that guarantees them of multiple benefits. You will hear most of them asking whether the targeted cryptocurrency can deliver high profitability like Bitcoin. When you join the Decred network, here are the advantages to anticipate.
- It is a great way to invest without worrying about third-party seizures. When you save cash in a bank account, it can easily be frozen by a court in case a court battle hauls itself to your doorstep. However, the encryption provided at Decred helps to keep users’ details and assets safe so that no third party can easily know or freeze them.
- Using Decred network allows users to become part of the network. When you join the Decred network, you become part of its system. As a network that puts a lot of weight on governance, all users and miners are eligible to participate in decision making at the network. Therefore, you will also be called upon when crucial decisions are being made in the network.
- Decred is a great opportunity for investors to rake in huge ROI because of its sustained progressive growth. Whether you prefer to buy the native Decred coins to trade in the markets or hold over time, the growth demonstrated between late 2017 and early 2018 promises good ROI if maintained.
- The cryptocurrency has managed to address the issue of governance that has been a serious problem to other networks such as Bitcoin and Ethereum. This means that its value is likely to continue growing and deliver more profits to those who hold the native coins.
- The cryptocurrency development team has been working on progressively improving the network. After combining the PoS (Proof-of-Stake) and PoW (Proof-of-Work) protocols, the development team is now focused on implementing the lightning network.
What Are the Risks of Decred?
Just like Decred comes with numerous advantages, it also has its equal share of disadvantages. Understanding the risks associated with Decred is important because it will help you to make the right decision to invest or use the network.
- The risk of the looming regulations. Since the establishment of blockchain technologies in 2009, most administrations have viewed them as networks out to cripple their effective operations. If these administrations go ahead and pass the harsh regulations, there is a danger that cryptocurrencies such as Decred could start shrinking and even fade with time.
- The threat of getting attacked. The cryptocurrency networks have become have become the primary targets for hackers because of the fast-growing popularity. You could be attacked at the network, wallet, or even the cryptocurrency exchange levels.
- The danger of more effective and attractive cryptocurrencies entering the market. Just like Decred entered the market and caused a stir with its unique governance system, it could also suffer lose appeal when more advanced crypto networks enter the market. For example, new cryptocurrencies are now introducing ecosystems that allow cross-chain operations.
- While Decred operational model has made it win the affection of the community, even more, this could easily change when Ethereum shifts to PoS algorithm. The dislike for PoW (Proof-of-Work) has been voiced from far and wide as more people demonstrate the difficulties associated to the high cost of equipment and power bills.
What Happens if Decred Gets Lost?
It has become a common thing to hear people in cryptocurrency forums say that they lost their crypto coins. These losses can be devastating especially when users had put a lot of efforts to mine the coins or buy them from the markets. By understanding what happens when such losses happen, you can take robust precautionary measures to protect your coins.
- Loss through sending DCR to the wrong address: If you key in the wrong public address when sending DCR, they will be lost. In such a case, the transaction is considered complete and the coins have a new owner. Note that the DRC coins are still active and circulating in the network.
- Loss through damage to your wallet: If your Decred wallet is damaged, the coins you were holding in it would also be lost. However, the coins will still be yours but in a dormant state. If you fail to recover the wallet, the Decred coins will be lost permanently.
- Loss through forgetting the private keys: Losing the private keys means that you have lost access to your coins. Though they are under your name, the coins will remain dormant until you get the correct private keys.
- Hacking: Hacking is a major cause of crypto coins loss as hackers target cryptocurrencies because of their anticipated growth. If you lose DCR through hacking, the coins have simply changed hands. The loss cannot be reversed.
When cryptocurrencies entered the markets in 2009, it did not take long for governments to start showcasing their dislike for them. The situation has grown from bad to worse as applications of cryptocurrencies keep burgeoning and acceptance reaching a record high. The United States Federal Bureau of Investigation (FBI) was the first to note the threats associated with cryptocurrencies. Now, almost every country out there is up in arms accusing the cryptocurrencies of targeting to wreck havoc and render administrations unworkable.
The European Union Commission leadership pointed that that cryptocurrencies created platforms for tax avoidance and risked users with hefty losses. Because these cryptocurrencies operate as decentralized networks, it means that they bypass all centralized organizations such as banks and credit card companies. This could ultimately cause such law-abiding and taxpaying institutions to shrink, lay off staff, and even close operations.
Despite these concerns, it is interesting to realize that no country had passed a legal framework by the close of the first quarter of 2018. Even those that have some form of operational framework, it is as a result of direct orders. For example, China opted to use direct orders to ban ICOs in the country because cryptocurrency investments were going against the administration’s focus on addressing tax outflows and corruption.
It is now emerging that passing cryptocurrency regulations is indeed no walk in the park. Here are some of the things making it very difficult to craft a legal framework to guide cryptocurrencies.
- Cryptocurrencies are evolving rather fast and forcing many administrations to only play catch-up. Even before a specific crypto network has been reviewed completely, a new type of blockchain network will have hit the market.
- Cryptocurrencies are not owned by a single entity. Indeed, Decred has enhanced the governance of its network by ensuring that all the decisions are made by users and miners in its network. Even if local laws are crafted, who will they target to halt the use of cryptocurrencies?
- The crypto networks have demonstrated their capacity to address key issues that have refused to go away for many years. A good example is the problem of Big Data. Therefore, the administrations are not in rush to block technologies that are promising solutions to their problems.
- Cryptocurrencies are considered the apex of the fast-evolving fintech sector. The link between finance and tech niche was largely seen by administrations as important stepping stones to growing their economies.
- The topic of cryptocurrencies has become highly emotive. Because the cryptocurrencies allow users to operate on a peer2peer basis, are more affordable, and reliable, a lot of people are associating with them. Now, when administrations voice their discontent or threats associated with cryptocurrencies, they risk losing the support of the masses.
Though there are many roadblocks on the path of crafting comprehensive crypto legal frameworks, the commitment by administrations means that they will finally dawn. Therefore, the best thing is to prepare what to do when the laws finally come into place. A closer look at various jurisdictions indicates that they are at different stages of crafting legal frameworks. Take a closer look at the next stage to know the legal status of Decred in specific jurisdictions.
Is Decred Legal?
Yes, Decred is legal. Because no country has passed a legal framework, it implies that you can use and invest in Decred without worrying about breaking the law. However, it is important to consider the fact that these jurisdictions are at different stages of creating their legal frameworks.
1) The United States
Decred is legal in the US. While the United States was the first nation to note the dangers that come with cryptocurrencies, the country had not passed a legal framework to regulate them. The only guideline provided by the US government was that cryptocurrencies such as Decred be treated as commodities. This clarification was meant to ensure that all cryptocurrency traders pay their tax dues on time. However, even this guideline does not appear to be bearing fruits.
The US federal government has realized that though a local framework is important, it must be accompanied by an equally robust international approach. The Treasury Deputy Director, Sigal Mandelker, visited the top crypto markets including South Korea, China and Japan with a view of forging a common legal front in cryptocurrency regulations. In a press conference in Tokyo, Sigal told the attendant that the US strongly believed that a crypto regulation would be more effective if a common global approach is taken.
In his part, the Treasury secretary, Steven Mnuchin indicated that they would not sit back and see cryptocurrencies turn into another type of Swiss account. He pointed that the country’s Financial Stability Oversight Council (FSOC) has already created a working group to look into the cryptocurrency niche and come up with proposals to help fast-track related regulation.
As the federal administration takes more time to come up with a clear legal framework, individual states have opted to march ahead and started working on local legal settings to suit their individual requirements. In March 2018, the Arizona House of Representatives passed bill SB 1091 that allows users to make their tax payment even in cryptocurrencies. When users pay tax in a cryptocurrency such as Decred, the coins are immediately converted to US dollars.
The impact of this law is sending ripples in and outside the United States. In the United States, other states such as Georgia are working on passing similar laws. Outside the US, countries are now looking at Arizona’s law and aiming at implementing similar laws to help increase tax collection.
Decred is legal in China. China is one jurisdiction that has had no good words for cryptocurrencies. The country considers cryptocurrencies to be against its focus on stemming capital outflows. Instead of creating a clear legal framework, China has opted for direct orders. The administration started by banning ICOs after discovering that over 80% of Initial Coin Offerings in the country were scams. It went ahead and froze bank accounts of exchanges that were associated with related exchanges. Bitcoin miners were also banned threatened with prosecution.
Early in 2018, the Institute of International Finance released a report that indicated China was prioritizing cryptocurrency regulation. The People’s Republic of China has supported the stand taken by the G20 in regulating cryptocurrencies. While this suggestion appears in line with the approach taken by the US, it is the suggestion that cryptocurrency related information is shared between nations that has rattled the crypto community.
If suggestion by China is taken, it is likely to go hand in hand with CRS (Common Reporting Standards) framework that requires people with accounts abroad to reveal to the tax authorities back home. This could compromise the ability of users to trade anonymously whether at home or abroad.
Decred is legal in Singapore. Singapore is one country that has grown into a financial hub because of its support for fintech. Before December 2017, the Monetary Authority of Singapore (MAS), warned the citizens to take precaution when dealing with cryptocurrencies because of involved risks. However, this stand changed in January 2018 when the country’s administration came out and said that there was no distinction between conventional fiat and crypto assets in transmitting value.
The country’s Deputy Prime Minister, Tharman Shanmugaratnam and MAS fintech Chief Mohanty Sopnendu said that there was no foreseeable risk of cryptocurrencies yielding a Lehman Brothers-type financial meltdown. Mohanty, however, insisted that consumer protection checks would be installed.
Decred is legal. Russia, unlike its peers who are still unsure of the route to take when it comes to cryptocurrency regulations, has decided to forge a localized approach to craft a reliable framework. Up to 2017, the Russian administration had opted for a hands-free approach in dealing with cryptocurrencies. However, early in 2018, the ministry of finance indicated that it was impossible to tell whether traders who accepted payment in cryptocurrencies were committing crimes. With this notion, the Russian Federation Central Bank and Ministry of finance went into an overdrive to craft a draft framework. By the end of January 2018, they published the Digital Financial Assets draft bill that has attracted praise and criticism in equal measures.
The digital assets include things such as tokens and cryptocurrencies. It goes ahead and differentiates the two. A cryptocurrency is considered a digital asset generated via mining, while tokens are issued by legal entities to help attract financing. In Russia, these digital assets are considered property. This implies that they are pooled together with shares and bonds.
The draft goes deeper into cryptocurrencies and defines mining of crypto assets as a means of goods production. Because companies and individuals can be used to produce the goods, the miners are required to be registered entities. They can also register companies for running mining entities. The government has also been advised to urgently create a tax for miners.
For those who intend to issue tokens through ICOs, the draft law requires them to start by publishing an investment memorandum and specify information about all associated details including the beneficial owner, issuer, token price, and the entity performing depository activity.
The draft further calls for all exchanges to install and strictly adhere to KYC (Know Your Customers) standards. If the draft becomes law, traders will be required to undergo many verification stages before being allowed to access the selling interface.
Even before the draft becomes law, it has already started generating resistance. The fintench sector and country’s opposition have indicated that Russia risks killing innovation industry. Members of the cryptocurrency community have indicated they could contemplate traveling to neighboring states to mine or carry cryptocurrency related activities.
Australia, like other countries such as Russia and South Korea, had opted for a hands-off approach when it comes to cryptocurrency regulation. However, this approach suddenly changed in mid-2017 in the wake of the financial scandal at the Commonwealth Bank of Australia. The Australian government acted swiftly by strengthening its anti-money laundering regulations and regulating digital assets.
The senators from both political divide, Labour, and Coalition, expressed their support for the cryptocurrencies to be accepted as a legal tender. They argued that transactions with Bitcoins should be considered a better arrangement and, therefore, need to attract similar tax requirements.
But the Australian Taxation Office (ATO) has clarified the government position and pointed it is not ready to make cryptocurrencies such as Decred legal tenders. ATO indicated that cryptocurrencies are neither local nor foreign currencies. Besides, it indicated that supply of these cryptocurrencies is no financial Supply for Goods and Services (GST) reasons. The rift leaves Australia with no clear direction when it comes to cryptocurrencies such as Decred.
Switzerland is one jurisdiction that appears at peace with cryptocurrencies. Like Singapore, Switzerland wants cryptocurrencies to be given a platform to blossom. The country is committed to going against the grain adopted by other neighbouring countries by making it easier for cryptos to enter and grow. In January of 2018, Johann Schneider-Ammann, the Economics Minister, told reporters that they were working to making the country a crypto nation.
Johann further told the financial times that the country had created an ICO working group with the target of creating tech-neutral regulations. The administration holds the view that if the cryptocurrencies are supported and nurtured well, they presented a unique method of raising funds for local projects. Even if other countries outlaw cryptocurrencies, rest assured that Switzerland will always be an oasis for them.
Decred and Taxes
The topic of cryptocurrencies and taxes is marred with great complexity and suspicion. Many people have been flocking to cryptocurrencies not to only reap the benefits of shifting value, but to also operate without paying taxes. Since 2014 when OECD passed the CRS framework that requires foreign countries to report financial accounts of foreigner in their jurisdictions, the world of those who want to live without paying taxes has been shrinking. One of the escape routes they have newly discovered is cryptocurrencies.
Because people in cryptocurrencies are able to operate anonymously, many feel that they are covered amply from tax authorities. In the United States, only a handful of people pay taxes related to their operations in cryptocurrencies. Even after the Commodities Futures Trading Commission (CFTC) clarified that cryptocurrencies such as Decred are commodities, very few people are paying related taxes. But it is not just in the United States where people in cryptocurrencies are not paying taxes. The same trend is replicated in the UK, Russia, China, and South Korea among other countries.
Even as people work towards staying without paying taxes, the tax experts are having a completely different view. They argue that the primary role of cryptocurrencies was not to help people stay without paying taxes. Rather, they were meant to give people an alternative route for sending value, investment, and changing their lifestyles within the provided legal frameworks. The focus on evading taxes is one of the primary reasons making governments work extra hard to pass cryptocurrency regulations.
While it is indeed true that networks such as Decred allow users to operate without worrying of third-party seizures, the status cannot last forever. This implies that the anonymous cover provided by Decred could cease in future. When newer technologies are finally discovered, it will be very easy to uncover those who evaded paying taxes and open lawsuits against them. However, you do not need to let things get to that point. Here are some useful tips to use to enjoy all the benefits of Decred without breaking the tax laws.
- Consider revenue from trading Decred taxable income.
- Make sure to always capture in the annual tax reports the profits or losses incurred when trading Decred.
- If you are unsure of how to handle revenue streams from cryptocurrencies on your balance sheet, make sure to work with a tax expert.
Does Decred Have a Consumer Protection?
Decred does not have consumer protection. The primary goal of Decred was to decentralize the network beyond the levels used by standard PoW (Proof-of-Work) or PoS (Proof-of-Stake) only networks such as Bitcoin and Ethereum respectively. By combining the two sets of algorithms, it means that all the decisions on Decred are made by users spread in the network across the globe. What this means is that you are on your own after joining the Decred network. In case of anything such as hacking or loss, there is nowhere to report to.
Because the network does not have consumer protection, you need to take every available precaution to keep your personal information and DCR secure. Here are some top tips to help you stay safe on the network.
- Do not share the private keys with third parties.
- Select the trading and selling platforms that are demonstrated to be secure.
- Ensure that the Decred client is always updated.
- Avoid visiting risky sites that can bring bugs into your network.
- Protect your computer with an appropriate antivirus.
- Store the private keys and seed away from the main computer.
Illegal Activities with Decred
The concept of cryptography in blockchain technology ushered a completely new way of doing things in the fintech sector. By allowing users to operate anonymously, many people especially criminals appear to have found a new way of running their activities. They believe that because they are covered from easy discovery by third parties, they can defraud clients with ease. However, no illegal activity had been reported with Decred by the close of the first quarter of 2018.
Is Decred Secure?
The Decred network is a secure platform with a dedicated team that strongly focuses on keeping users as secure as possible. Since inception, the Decred team has focused on building on achievements from both Proof-of-Stake and Proof-of-Work models to keep the network secure and make it better. Here are some of the things used to keep the Decred network secure.
- The enhanced governance model ensures that DCR are distributed well distributed and all users are involved in voting. This thwarts the danger of 51% attack on the network.
- The development team is always on the lookout for gaps and filling them promptly to ensure that attackers do not gain entry.
Is Decred Anonymous?
Yes, Decred is an anonymous network. The Decred founders wanted to provide users with a more decentralized and anonymous network. The primary method used to provide anonymity at Decred is encryption. All the personal accounts, user details, and transaction are encrypted to prevent easy discovery by third parties.
Has Decred Ever Been Hacked?
One of the biggest risks facing most cryptocurrencies out there is getting hacked. When reports of hacking are reported in cryptocurrencies, it is not just the attacked network that suffers. The entire crypto industry could be thrown into a spin. Though there are numerous hacking attempts at Decred network, none of them was successful by the close of the first quarter of 2018. The Decred team has been working hard to identify vulnerabilities and sealing them in time to reduce the danger of attack.
How Can I Restore Decred?
The most painful thing in cryptocurrencies is waking up one day and finding your crypto coins are lost. After putting all the efforts to mine DCR, a loss takes you back so many steps back because you will need to go back and mine others or buy from the exchanges. However, do not give up on the coins this fast. There are some cases when the DCR can be restored.
- Loss through damage to your wallet: If you lost the Decred wallet, it means that the coins stored in it were also lost. You can only restore the coins by installing a new wallet from the backup.
- Loss through forgetting the private keys: The private keys are your gateway to your DCR stores in the Decred network. To restore the DCR after losing your private keys, you have to use the seed to regenerate the keys.
However, if you lose DCR through hacking or sending to the wrong address, there is no method that can be used to restore them. This implies that the loss is permanent and the transactions have been recorded in the Decred public ledger. You can only consider mining more or buying from the exchanges.
Why Do People Trust Decred?
Because of a large number of cryptocurrencies in the market, many people only consider joining the most trusted networks. Here they are mainly worried about the security and future direction. The following are some of the main reasons that make people trust Decred.
- The cryptocurrency has one of the best governance systems in the market today.
- The development team is very active in crafting newer and more effective features that keep growing the appeal of the cryptocurrency.
- The Decred network is marketed as a better cryptocurrency when compared even to top crypto networks such as Decred.
- Decred network is increasingly attracting a lot of interest from corporate organizations.
- By Adopting both PoW (Proof-of-Work) and PoS (Proof-of-Stake), the network has made it easier for more people to join, mine, and become part of the network.
- The value of the cryptocurrency has continued to grow progressively.
History of Decred
- In 2014, _ingsoc (a person using only the pseudo name) approached Company Zero and suggested to the CEO, Jake Yocom-Piatt that they form a merger and create Decred network. The two parties shared a lot in common and agreed to work together. In November of 2015, they published the challenges that faced Bitcoin and pointed that the biggest was governance.
- The solution to the Bitcoin and other networks’ problem of governance was born in December of 2015. They proposed Decred that would operate as a hybrid of PoW (Proof-of-Work) and PoS (Proof-of-Stake). The Decred Mainnet was launched on February of 2016.
- In June 2017, Decred became the first project in the cryptocurrency niche to approve a change in its protocol using an on-chain vote model. The changes introduced Proof-of-Stake staking algorithm.
- In September of 2017, an atomic swap between Decred and Litecoin was effected.
- In 2018, Decred plans to implement the lightening network. This is expected to help make transaction faster.
- The price of Decred started from less than $1 in early February 2016. By close of February, the market capitalization was only slightly more than $2 million. However, it shrank to $1.6 million by December 2016 before taking a sharp rise to reach 65 million in March 2017. Three months later, in June 2017, the value had reached 249 million. It took a downward trend and hit $163 million in November 2017 before rising steadily to $550 million on March of 2018. By May 2018, the value of Decred had reached the highest point so far at $843 million.
Who Created Decred?
Decred was created by two people, Jake Yocom-Piatt (CEO of a Chicago computing company known as Company zero) and a person only known by his pseudo name _ingsoc. However, it is Jake who has been the face of the cryptocurrency in most forums. Jake is the project leader at Decred with more than 10 years in open-software development. He has also worked at Chicago Tribune, oversaw the creation of BTCsuite, and taught workshops on cryptocurrency governance.
Decred Videos and Tutorials
Decred Review: Community and Possible Challenges
Decred Hard Fork Voting Demo
- Bitcoin | Ethereum | Ripple | Bitcoin Cash | Litecoin
- Cardano | NEO | Stellar | EOS | NEM | VeChain Thor
- Monero | Dash | IOTA | TRON | Tether | OmiseGO
- Bitcoin Gold | Ethereum Classic | Nano | Lisk | ICON
- Qtum | Zcash | Populous | Steem | Ontology | Waves
- DigixDAO | Bytecoin | Bitcoin Diamond | Binance Coin
- Bytom | Verge | Crypto Humor
- Cryptocurrency Dictionary | List of Cryptocurrencies | CEX.io
- Binance | Coinbase | Changelly | Coinmama | Bitpanda
- LocalBitcoins | Kraken | Paxful | Ledger Nano S | TREZOR