LISTEN TO THE PODCAST
I’ve heard debate about Decred not offering anything new to the cryptocurrency space or not having a specific utility. Although to the outsider this may seem like the case, in fact, Decred offers so much utility that it’s often hard to describe in a punchy one-liner.
So let’s have a look at some of the utility that Decred has to offer.
Utility 1 – Sending and receiving
The primary mission of any cryptocurrency is the ability to send and receive money peer to peer without the need for a middle man or rent seeker. The Decred network and wallet technology facilitates this very well. On-chain transactions typically cost less than a fraction of a penny and fully complete in approximately 5 minutes.
This year we’ve also seen improvements to Decred’s lightning network which enables transactions, micro-transactions and tips to complete almost instantly for a single atom (or 0.00000001 dcr). This makes Decred one of the securest, cheapest, and fastest peer to peer networks to transact with.
Utility 2 – Interest for holding
Decred enables coin holders to earn interest whilst they hold the coin, without requiring a third-party custodian. Earning interest on your DCR savings, allows users to reduce the impact of inflation when holding for the long term. Interest on savings was once a staple of the fiat currency system, before the free and cheap money era started.
Utility 3 – A new work paradigm
There’s probably no bigger utility than being able to earn the currency by employing your productivity to the project. For many years, the only way to get crypto was to buy it from an exchange. To evolve into a mature currency, there has to be more options for receiving and spending. In my opinion, this is three stages to adoption – Buy, Earn, Accept.
Decred enabled this initial functionality by building a contractor system and a treasury. If you have productive skills that can be used by the project, it’s possible to earn Decred DCR.
Current work opportunities include:
- Development work
- Marketing and promotion
- Video and audio production
- Research and analysis
Utility 4 – Stakeholder governance
One of Decred’s philosophical goals is to give coin holders the final say on every area of development and spending. The utility of coin holder governance means coin holders control the direction the project takes. Coin holders have the most to lose, so they get the final say. This is in direct contrast to the majority of other financial systems, where an external or temporary entity, that typically has very little to lose, controls and guides all the decisions and outcomes.
Utility 5 – Mining
September 2023, saw the end of the ASIC era on the Decred network, which opened up new opportunities for hobbyists and community members to use their standard GPU hardware to mine the project and earn DCR for their efforts.
The utility of mining is an area that is not widely available for hobbyists on the majority of cryptocurrency projects. With only a small amount of hardware, Decred can now be mined by anyone wanting to participate.
Coin holders now have the opportunity to secure the network at a relative low entry point.
Utility 6 – Peer to peer exchange
One utility that isn’t specific to Decred is the need to remove the centralised exchange element of crypto. DCRDEX, which has been built by Decred as a public good for the entire space. Facilitates a peer to peer exchange process that has no middle men, no KYC, is non-custodial, has no trading fees and is freely available to all users or developers under a permissionless open-source licence.
A lot of industry insiders scoff at the idea of a peer to peer exchange that uses atomic swap technology. Referencing the following reasons – slow, inefficient, cumbersome, complex to set up, not user-friendly, and hard to find people to swap currencies with. All of which are false, try it for yourself, it won’t take you long to see the inaccuracies of these statements.
The question, probably should be, why are, so-called, industry professional’s and experts getting this wrong or providing misleading information? I believe this could be for two reasons. Firstly, they only have experience of the tech from a few years ago when it was in its infancy. And secondly, which is a little more sinister, there are no profits for them to make from people using DCRDEX.
Utility 7 – The P2P Everything-App
Having an app that lets you freely, privately and permissionlessly communicate with friends and peers whiles removing advertising and spam is something the world desperately needs. Bison Relay has started this process and uses Decred’s Lightning Network to facilitate the platform's communication protocols.
In its early stages, it’s possible to post social media content to your followers and comment on these posts; send and receive private messages; participate in group chats; share and sell digital files; and send users tips.
All of these interactions are peer to peer, processed over the lightning network, and bring social activities to the Decred platform.
Utility 8 – Hyper secure coin storage
Like it or not, security should be the number one priority of a project aiming to be money. Without extremely high levels of security, a project has no long-term future, which means all utility built on the platform has no value.
Decred’s security model and wallet technology has continued to evolve to make the project resilient and costly to attack. This is done by combining several consensus factors and maintaining high standards and practices.
Recent upgrades to Decred’s consensus also mean the project has reduced its reliance on hash power and mining hardware by a factor of 99+% whilst remaining efficient, reliable and hyper secure.
But what utility is Decred missing?
In my opinion, being able to buy goods with Decred DCR is an area that needs and is getting attention. There are some promising developments on the horizon that include storefronts for Bison Relay and payment solutions for DCRDEX which should make merchant adoption more feasible in the long term.
I hope the information in this video was useful. The aim of this series to break down the barriers for new users and provide them with the information needed to understand Decred’s core principles, philosophies, and technologies.
Have your say: What is Decred’s strongest utility?