Decred (DCR) was one of the first privacy focused coins, and was released in February 2016. Since then we’ve seen many changes in cryptocurrencies and the mining and trading of coins and tokens. Back in 2016 Decred was worth just $1, but as of July 2018 it is nearly $65 after nearly reaching $120 in May 2018.
Decred did decline with the broader market from January through April 2018, but it rebounded much faster and stronger than almost any other coin. It has since pulled back somewhat from its highs, but obviously there is an appetite for this coin among investors and traders.
This has also attracted the interest of miners who are interested in the profit potential from mining Decred. Many of them were using GPUs and mining pools for Decred mining, but over the past five months the attractiveness of mining Decred has dropped dramatically for one reason – ASICs.
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Using ASICs To Mine Decred
Back in January Obelisk announced that they had created a Decred ASIC miner. Called the DCR1, it has a hash rate of 1200 GH/sec and requires just 500 watts for power consumption. Other manufacturers followed with their own Decred ASIC miners.
Decred DragonMint ASIC Miner. Source crypto-miningblog.com
As you might expect this is significantly increasing mining difficulty. In fact, since the beginning of May the mining difficulty has increased from 273,629,001 to 3,975,462,300. As you might have guessed by now, GPU mining for Decred is dying, and is possibly dead already.
Of course there are still mining pools out there for Decred, and if you use the Claymore miner you can also dual mine Decred with Ethereum. But by many reports online it isn’t even worth it to dual mine Decred any longer, thanks to the massive increase in mining difficulty caused by the introduction of ASICs.
Mining Pool Considerations
If you are going to join a mining pool for Decred, there are some basic things you should look into when comparing the pools. For the most part there isn’t much difference in mining pools, but there are some factors that will differentiate one pool from another.
- Pool fees. Obviously the lower the fees the more coins come to your wallet, so lower fees are always better. Generally speaking fees are going to be 1% at most mining pools, but sometimes you still come across a pool with 0% mining fees.
- Geographic location. You need a mining pool that’s in the same geographical area as you to make your mining work effectively. So, if you’re in the U.S. you want to choose a mining pool with servers in the U.S. The same goes for Europe, Asia, Australia or wherever in the world you are. Basically, the closer the servers are to your location, the better.
- Trustworthy – Most mining pools have been in operation long enough to have a history, and users know that the pool owners are trustworthy. Those that aren’t typically get shut down quickly as word spreads. Just make sure to do some research into the mining pool to be sure there aren’t any questions about its trustworthiness.
- Payment method. There are several payout schemes that are used by mining pools, with the most common these days being the Pay Per Last N Shares (PPLNS). Take some time to get to know the different payment schemes and make sure you’re comfortable with the scheme your chosen mining pool uses.
Best Decred Mining Pools
If you want to go ahead and try a Decred mining pool, the four below are good choices to begin with:
Suprnova – One of the largest and most popular Decred mining pools, Suprnova has pools for nearly 4 dozen different coins and servers located all around the world. It uses the Proportional (Prop) payment scheme and has 0% fees.
Coinmine – Coinmine is another popular choice, especially for privacy-concerned miners since Coinmine allows anonymous mining. It has a 0.1 DCR minimum payout, which is quite low, and uses the PPLNS payment scheme. It also has 0% fees and servers at key locations around the globe.
Decredpool – Decredpool is a smaller mining pool, but it is still a good choice. With 0% fees and Proportional payment it’s quite similar to Suprnova.
Luxor Mining – Luxor Mining has recently launched their Decred pool that offers a 1% PPS scheme. They currently have four servers that you connect to with two in the US, one in Europe and one in Asia.
Another Way to Mine Decred
Decred is a bit different from other cryptocurrencies in that it uses a hybrid Proof of Work/Proof of Stake consensus algorithm.
As the difficulty of finding blocks in the Proof of Work mining system increases, more people have been finding their way to the Decred Proof of Stake mining pools (Stake Pools) to generate profits from their investment in Decred.
Overview of the Decred PoS System with “Stakey”. Source: Medium
There are quite a few of these pools, and the only real metrics to judge which pool to join is how large the pool is (smaller pools are preferred for decentralization, but larger pools have less missed votes), and the fee charged by the stake pool.
You have a fair number of stake pools to choose from and you can see the full list here on the Decred website.
Why Choose a Stake Pool
A stake pool is used to delegate your voting powers to a third party (the pool). The pool cannot steal your funds.
Participating in a stake pool is perfect for people who wish to take part in Decred’s proof of stake voting but can’t due to:
- Not wanting to keep a constantly unlocked wallet
- Lack of a reliable/low latency Internet connection
In order to participate in Proof of Stake voting and the stake pools, you need a wallet that supports stake pool voting, and enough DCR to buy tickets for voting.
There are currently two wallets which support stake pool voting:
- Decrediton – GUI wallet for Windows/macOS/Linux. The Purchase Tickets tab is used to buy tickets.
- dcrwallet – CLI wallet for Windows/macOS/Linux. The Buying Tickets with dcrwallet guide explains how to purchase tickets via command line.
As of late July 2018 the average DCR needed to buy tickets has been just above 93. At current prices that’s nearly $7,000, which should be kept in mind by those considering using Proof of Stake voting and stake pools.
Which Stake Pool to Choose
There’s really very little difference in stake pools other than the percentage of network votes controlled, the percentage of missed votes, and the fee charged by the stake pool.
The two largest are Stakeminer, which has more than 17% of the network votes, and Stakepool, which has over 7% of the network votes. It’s not recommended to join pools with more than 5% of the network vote in order to support increased decentralization. The former charges a 1% fee and the latter charges a 2% fee.
Decred StakeMiner Stats. Source: Stakeminer.com
Some smaller alternatives that are just as good, or better than the largest Decred stake pools are:
Ubiqsmart – This stake pool is medium sized, with just over 400 users, and has a low 0.95% fee. The missed vote rate is somewhat worse than that at Stakepool, but similar to Stakeminer.
UltraPool – A mid-sized European based alternative with a 1% fee, low missed vote rate of 0.08% and over 500 users.
Stakeynet – This is a fairly new Stake Pool with just over 200 users, it’s been in operation for six months. It has a 1% fee and a very low 0.05% missed vote rate.
Like so many other coins, ASIC mining has ruined GPU mining for Decred. Thankfully it is still possible to use the Proof of Stake mining in this coin to profit from current DCR holdings.
I’m not going to suggest you purchase DCR just for Proof of Stake mining as it would be quite an investment, but if you have the necessary cryptocurrency already and want to accumulate Decred without outright buying it, the Decred Stake Pools might be your best option.
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