Why I Decred
Before you read my article I want to put forth few points
- I’m just a common, random guy on internet and have little to intermediate knowledge on crypto currencies
- I’m not a native English speaker. So, bear with my English
- Views are own and not a financial advice
The title says it all. This is my story of how I came to know about Decred and why I fell in love with it. This post also has some important lessons I learned and maybe you’ll resonate with some of these lessons
Background
I got to know about crypto back in 2016 and what initially attracted me to it was the money (though I never made any). So naturally, like some of you, I started my journey with investing in some hype projects. But every time I invest in a coin/token I would look for one thing — What is the utility of this coin? My definition of utility is that the token should have some valid purpose and be used in everyday life. My obvious choices were like Sia, Factom etc. I was never interested in Bitcoin as I couldn’t understand or see where I would be using it. My biggest mistake?
With that mindset, I would jump from one coin to another wherever my definition of utility is strong. I did that until I found a coin which made me feel like ‘this is the coin which I have been searching this whole time’. Let’s call that coin ‘ABC’ as I don’t want to name it publicly. I made ABC 90% of my portfolio as I was so impressed with the promised utility, the founder, the simplicity etc. And this turned out to be the worst decision of my life. But it taught me some good lessons which I will share shortly
How I came to know about Decred?
While I was in ABC’s Discord, someone in the group spoke very high about Decred and its developers. I casually joined Decred’s Discord and tried to understand what it is about. As you might have guessed, my first question was — what is it’s utility😃? As a result, for the first time I was introduced to the term ‘SoV’. As my tiny brain couldn’t comprehend it, I left Decred’s Discord as quickly as I joined it. But Decred came up again in the ABC’s Discord. I saw a meme someone posted — If Bitcoin is gold, Decred is Platinum. This made me curious and joined the Decred’s Discord again. But this time I did some more research and never looked back.
If Bitcoin is gold, Decred is Platinum
Now, let’s look at the lessons what my ‘ABC’ coin taught me and what Decred has to offer me in those areas. Next time you invest in a coin ask these questions and you would know if are putting your bet on the right horse.
#1. Who controls the majority of tokens?
If your answer to this question is an entity or a small group or an organization, then in my opinion it’s a big big red flag. Humans/organizations always tend to have their own personal interests, whereas, software/algorithms do not. So, if your token is pre-mined and the majority is controlled by a handful people, it’s almost certain to be doomed(DEFI??). In the case of my ABC coin, the founder sold 80% of the tokens in the open market that have been set aside for a different purpose. The founder felt he/she is not answerable to anyone and took unanimous decisions to dump the tokens in the market
If your token is pre-mined and the majority is controlled by a handful people, it’s almost certain to be doomed
How is Decred different?
Decred’s issuance is deterministic and guided by algorithms, not humans. We know exactly how many coins will be issued for a particular block and how long it will take for the whole supply to enter market. Below is the chart of Decred’s issuance. Interested people can head over to https://docs.decred.org/advanced/issuance/ for more information
Decred’s issuance is deterministic and guided by algorithms, NOT humans.
#2. How and where is the money being spent on?
If you look at the whitepapers of a lot of pre-mined coins, they would show you a pie chart that looks something like the below one. But, I’m telling you the chances of this chart being followed is very very slim. Moreover their definitions of marketing, foundation etc will be very different. For instance, my ABC coin team hosted a very expensive & lavish event in the name of attracting future potential investors. Truth is that founder was trying just to expand his own personal network. However, the founder claims, that was a Marketing initiative for the project. Truth is after years it resulted in zero benefit to the project and investors.
If you don’t know how the project’s treasury is being spent on, it’s time to get out of that project RIGHT NOW
If you don’t know how and where the project’s treasury is being spent on, it’s time to get out of that project RIGHT NOW
How is Decred different?
This is where Decred really got my attention. Decred has it’s own treasury but unlike my ABC coin, everyone in the network would know how much and on where is the money being spent on. It doesn’t stop there, I actually have a say through my vote on Politeia(off chain governance) where the treasury should be spent on. If you think that’s nothing, there is even more — the treasury is not controlled by a single or group of persons. It’s totally decentralized too (not at the time of writing this article, but in a few weeks). Isn’t that AWESOME?
Decred’s treasury is totally decentralized and you can vote on where it should be spent
#3. Can your project sustain for years and decades to come?
Because of their lavish and mindless spending, my ABC project ran out (in 2 years) of initial funds they raised. In order to survive, they started dipping into funds that have been allocated for other purposes. Now the pie chart I posted above would look something like the below chart. They started dumping all the tokens they hold onto the market. Even after that, their survival became questionable
If you don’t see your project having enough funds to survive for the next decade, it will be deserted soon. Projects need funding to survive
How is Decred different?
Coming from my ABC project, I was quite surprised to learn that Decred envisioned this funding challenge long ago and built the treasury right from inception. Every block mined on Decred network would contribute 10% of the reward towards the treasury. This keeps Decred network going for decades. At the time of this writing, Decred’s treasury is worth 7.25M. Since the treasury is spent very frugally, we can build another Decred with this money. And interesting thing is a lot of other projects are now copying Decred’s strategy. If you don’t see the vision of Decred, you must be blind
Decred solved the funding challenge right from inception. Every block mined contributes 10% of its profits towards the treasury
#4. Is your voice heard in the project/network?
As days were passing, my ABC project is near to bankruptcy. So, they came up with a clever hack which again benefits the team rather than investors. I don’t want to mention what the hack was as you would start associating names. But the point is, this new hack provides 90% of the benefits to the founders and 10% to the ABC token holders. Now, who decided to that? Obviously the founder. Community members never had any say. Even if some spoke out their voices fell on deaf ears. I felt helpless
You project doesn’t deserve your money if your voice is not heard
How is Decred different?
Oh man, what should I say about Decred. It’s so amazing. Every big decision made on Decred network will be put up for vote. It’s never unanimous. Decred has both on-chain and off-chain voting. Which means, you can vote on the proposals and decide the fate of network. I felt like I moved from a country ruled by dictator to country governed by democracy. That’s quite compelling to me. You can read more about it at https://docs.decred.org/governance/overview/
Every big decision made on Decred network will be put up for vote. Your voice is heard
Conclusion
Every single word I uttered about ABC project is 100% true and not a made up story. Some of you might have even recognized by now what that project is. The purpose of this write up is not to name shame the ABC project. Instead, it is more about why I like Decred and why I joined it.
After these expensive lessons, I now know what ‘Store of value (SoV)’ is and why Decred aptly fits the SoV narration. The faith you put in Decred cannot be broken by any person or an entity. It will continue to grow and spread for decades to come. It’s resistant to hacks and attacks. The value will simply keep multiplying.
To read more about Decred head to https://decred.org/
What’s your story of #whyidecred? It could be anything, just write up a blog post or share it on Twitter for the rest of the world to learn and enjoy what Decred has to offer.
