Monero and Decred are the new Bitcoin
Their focus on privacy and decentralization carry forth the original Bitcoin vision
When I first became aware of Bitcoin, it was a revolution. It seemed immediately clear that it would cause major disruption to the status quo or be suffocated in its infancy. This was in early 2013, so it was already going for four years, but the project was still in the early stages. It seemed possible, nay probable, that the full weight of governments and central banks would come down on it and the community consisted of lots of visionaries and dreamers who thought Bitcoin could disrupt a corrupt system.
A lot has changed since then. Bitcoin is no longer the high-risk rebel. In fact, it’s launched a whole industry of cryptocurrency projects and within that realm it has become the low-risk, conservative one. Bitcoin has slowly made its way towards the mainstream. That Bitcoin community I stumbled upon nearly 8 years ago is long gone. Most people involved now see it as a means to make money, not a means to replace it. [Has Bitcoin lost its way?] There are new projects that carry forth the original vision though.
Monero and Decred are today what I imagined Bitcoin would become. While Bitcoin slowly enters the financial mainstream, these two projects work towards dismantling it.
In a fascinating aside, the anonymous founder of Bitcoin — known as Satoshi Nakomato — left the project in Dec 2010. Years later, Decred and Monero shared another anonymous founder, this one going by the name taco_time, who also walked away shortly after the projects took off. There is some speculation that taco_time is Satoshi. Not likely true but dovetails nicely with the notion that Monero and Decred are carrying forth that original torch.
Monero is focused on privacy
It’s important to note that Bitcoin is NOT anonymous, but pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. Unless you are extremely careful it is possible to link your identity to an address as well as to transactions made involving that address. The powers of surveillance will almost certainly become concentrated and give those that wield it, likely states and corporations, increasing power over individuals.
Monero aims to fix this by using a variety of methods to obscure transactions and identities. The community is strongly united around this principle and there is constantly being work done to find better ways to do so. A truly private internet money that’s easy to use is the end goal. If the original Bitcoin vision was to subvert powers of the state and give them to individuals, then true privacy is a paramount concern. In the beginning, Monero was technically complex but with each year even as its security and privacy increases, it has also become more user-friendly.
Decred is focused on decentralization
Launched in 2016 Decred has been focused on decentralization. This was an important principle in the Bitcoin white paper, but time has shown that centralization finds ways to creep in — Decred puts its main effort into mitigating that. It uses a hybrid system that not only combines proof-of-work and proof-of-stake for new coins but also has a self-funding treasury that gets 10% of block rewards which then becomes the main driver of new development via a proposal system named Politeia. Anyone with an idea and skills can pitch their idea to Politeia and the community will vote via the proof-of-stake system. Anyone with Decred can buy a ticket and besides getting a small reward for helping to secure the network it also allows you to vote on proposals. Since decentralization is a founding principle of the crypto-space it gets a lot of lip-service but one of the oldest problems with power is that it is extremely rare that once someone has it, they will give it up voluntarily. Decred is a rare exception and notable in the progress its developers have made in converting the projects resources into this autonomous system. Monero is another outlier here, as its development is completely funded by community donations.
Like Monero, Decred is always looking ahead and aiming to improve. With the recognition that centralized exchanges diminish decentralization in the space the latest big project being developed is a truly decentralized exchange. The really exciting thing about Decred is that it can be a blueprint for other projects and communities. If they can figure out decentralized governance for their coin then those lessons may apply for other situations, including those that have nothing to do with crypto currency. An exportable decentralized governance in a box could be world changing.
Both communities are steadfast
The Bitcoin community changed over the years from crypto-anarchists that wanted to disrupt power to bankers that seek to control and profit. Privacy and decentralization are two pillars of that original vision and Monero and Decred have never wavered. While much of the industry has consciously manufactured hype in exchange for profits, these two projects have kept their head down and focused on the product. I’m still eager to see Bitcoin grow because I see it as the best gateway toward a general mainstream acceptance of cryptocurrency but if crypto does in fact succeed in redesigning our world and redistributing power it will be driven by ideological projects such as Monero and Decred.
This is part of an ongoing series exploring the potential for change inherent in cryptocurrency. Published so far: Bitcoin is so much more than money / What if deflation was good?/ The key to understanding Bitcoin / Has Bitcoin lost its way?