Created as a response to frustrations in the software refinement process and governance issues involved in developing the original Bitcoin protocol, Decred was launched as a hard fork of Bitcoin in 2016 by Company 0. Decred -- short for Decentralized Credit -- distinguishes itself from Bitcoin and other cryptocurrencies primarily with its hybrid consensus mechanism and its emphasis on genuine community decision-making, operating under a decentralized governance system.
Decred adopts a Proof-of-Work and Proof-of-Stake hybrid solution for consensus that rewards miners, validators, and developers who contribute to the network's security and development. Rather than depending exclusively on miners to secure the network, validators who hold stakes in Decred are randomly selected to contribute to the consensus process, thus acting as a sort of two-factor authentication whereby malicious actors would need to control more than 51% of the hashing power as well as control staking power in order to corrupt the network -- an enormously difficult feat to achieve. Additionally, developers are incentivized to continue refining the protocol as they can also be paid for their contributions via the network mining fees, earning a share of consensus rewards designated for the Decred project fund.
With its focus on authentic community input and self-rule, Decred offers a highly decentralized governance solution via Proof-of-Stake whereby users vote for proposed changes prior to activation rather than leaving the ultimate decision exclusively to miners. This system reduces the likeliness of contentious forks and enables staked users to directly contribute to decisions made in development. These binding on-chain votes determine changes to the protocol rather than depending on the mining community to determine the preferred solutions strictly via dominant hashing power. The network also allows Decred users to submit their own Decred-based projects via the public blockchain proposal system dubbed Politeia.
Decred is the leading innovator of atomic swap technology, initiating the first successful atomic swap -- a trustless, escrowless, and decentralized exchange process -- between Decred and Litecoin in 2017. This cross-chain innovation, now adopted by a number of capable protocols, enables censorship-resistant trading of compatible cryptocurrencies. Decred's UTXO-based structure, like Bitcoin and Litecoin, also allows the currency to be transacted via the rapidly-growing lightning network.