Innovative blockchain technology

Decred introduced an innovative consensus strategy to govern the blockchain. PoW miners ‘mine’ to create blocks. Shortly after that, the stakeholders ‘vote’ to confirm if the block is indeed valid. They do so by buying voting tickets, thereby temporarily locking their DCR in the network.

When a block is created, 5 tickets are chosen at random from the ticket database. If at least 3 votes are ‘Yes’ the block is validated and integrated into the Decred blockchain. In this case both PoS and PoW miners are paid. If the vote fails, the block is discarded and the transactions return to be included in another block. In this case PoS miners are paid, but PoW miners are not.

What about block rewards?

60% PoW Miners
30% PoS Voters
10% Decred development subsidy

For the current reward check

As you can see 10% of every block is reserved for the development of the Decred system. This means that the community can always pay the best developers to work on new features.

Advantages of the Decred system

Imagine that the Decred community wants to change the consensus rules of the network in the future. There may be PoW miners who (for some reason) do not follow this community decision. If they mine blocks that do not comply with the new consensus rules, these miners will not be paid. This works as an incentive for innovation and community-based decision making.

Using a hybrid system also means more safety and stability. Large mining pools have almost zero chance of getting too much influence over the network (the infamous 51% attack) because each block is verified by PoS voters. Our stakeholders will detect and prevent unwanted behaviour.

Conspiracy between PoW miners and PoS voters is not possible because tickets are chosen only after the block is created. Conspiracy between PoS voters is also unlikely because the ticket database is kept at around 40,960 active tickets. The chance of three tickets belonging to the same group is very small. Remember that it’s a random draw. Even if this happens, every transaction is validated at least twice.

To conclude, a hybrid consensus system is extremely safe and stable. The chance of anyone manipulating the Decred blockchain is effectively zero.

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