What makes Decred different?

After the rise of Bitcoin we have seen an enormous increase in digital currencies. Some have been successful, some have already failed. For an impressive list of all existing currencies you can check CryptoCoin Charts.

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Most of the currencies listed can be called cryptocurrencies, but definitely not all. Wikipedia defines a cryptocurrency as "a medium of exchange using cryptography to secure the transactions and to control the creation of new units". It is specifically stated that "cryptocurrencies are a subset of alternative currencies", which means that not all digital currencies use cryptography. Wikipedia also provides a list of the largest cryptocurrencies.

Since my discovery of Decred I have investigated several different types of digital currencies to understand why Decred is different. Let me list some these currencies:

Next to Bitcoin, we have Litecoin, BlackCoin, Dash (formerly known as Darkcoin and XCoin), Namecoin, Peercoin, and Emercoin. There are also currencies created for fun, like DogeCoin, Potcoin or Titcoin, or for a special part of the population, like Auroracoin or MazaCoin. Next to currencies, people have also created new protocols and platforms (many of which host their own currency), like Stellar, Ethereum, Nxt, NEM, Ripple, or CryptoNote. On top of this list, there is an incredible amount of currencies that 'forked' from these main currencies and platforms:

Looking at this huge list, why would we need a new cryptocurrency? For the main reasons why most nations invade other countries: Safety and Democracy. That sounds bad. Let me explain. 

First of all, Decred uses the Blake-256 hashing algorithm. This type of algorithm is less vulnerable to the security issues facing the Merkle-Damgård construction-based hashing algorithms (such as SHA-256, the hashing algorithm of Bitcoin).

Secondly, many cryptocurrencies use either pure PoW or pure PoS (check out this video for a clear explanation of the two). The challenges with using pure PoW are that, over time, miners have an outsized influence over the blocks that get mined, which can be used to gain consensus and to censor transactions. The main challenge with pure PoS is that early holders of the currency end up owning everything by merit of passive income on their coins. Decred will create a hybrid of the two systems. This way, a balance between miners and currency holders (voters) can be achieved, which will create system of community-based governance.

Third, the decisions around Decred will be made by both insiders and outsiders. The community will include bottom-up decision making through the Decred Assembly. Community members who make non-financial contributions to the project will thus have a voice as well.

The last important reason why Decred may become big is related to its development. Decred is built in Go, a future-oriented programming language developed by Google. Decred welcomes and empowers participants who want to build new and improve on existing features. Development is open and self-funded, to ensure long-term development sustainability. Furthermore, the core-development team has expert knowledge and experience with cryptocurrencies, since it has been involved in the development of bitcoin and btcsuite.

Interested to learn more? Check the initial press release or the website of Decred and find out yourself why Decred is different to any existing currency.