BitShares: “Now you can be hired by the Blockchain”

On August 8th, 2017, BitShares had a market cap at USD $409,600,606 for an equivalent of 118,908 BTC or 1,385,105 ETH with a circulating supply of 2,597,670,000 BTS at a price of $0.157680 per coin.

Right away I’m wondering what the function of BitShares is, and I’m excited to dig into the whitepaper, website, and other relevant content I can find.

Why my enthusiasm? Well, in terms of PRICE, the only other cryptocurrencies in the top 18 taking each coin out to 0.000000 are Ripple, NEM, IOTA, and I found each of those currencies to have both interesting and unique functions and features. BitShares, like the above cryptocurrencies, also has a huge volume of circulating coin supply. That leads me to believe that this currency is intended more for development than store of value purposes, but what do I know? LOL.

One thing that bothers me about BitShares is the change in sentiment among cryptocurrency investors and traders. The market cap for BitShares broke $1 billion on June 12th, 2017, but as of August 9th that value stands at closer to $400 million. That’s a SERIOUS drop in only two months. So, clearly, something happened. What was it?

BitShares has been around for some time, and there’s tons of information out there including multiple white papers. Let’s see how well I do aggregating the information into a massive list of BitShares Fact and DYK!

“BitShares is designed to be self funding and self-sustaining by giving the stakeholders the power to direct where blockchain reserves are spent.”

  1. BitShares has a reserve pool of 1.2 billion BTS (about $8 million dollars) that automatically grows as transaction fees are collected and the share price rises. Each day, the blockchain is authorized to spend up to 432,000 BTS (about $77,000 per month), which is enough to hire a small team to maintain the network for years, even with no price appreciation.
  2. Built using the latest in industry research, BitShares 2.0 offers a stack of financial services including exchange and banking on a blockchain.
  3. The BitShares platform itself is run and maintained by the BitShares community–an open consortium of individuals and organizations committed to providing universal access to the power of smart contracts.
  4. BitShares 2.0 is an industrial-grade decentralized platform built for high-performance financial smart contracts.
  5. Market-pegged assets, such as the bitUSD, are crypto tokens that come with all the advantages of traditional cryptocurrencies like bitcoin but trade for at least the value of their underlying asset, e.g. $1.
  6. BitShares represents the first decentralized autonomous company that lets its shareholders decide on its future direction and products.
  7. BitShares coined the term “decentralized exchange” (DEX).
  8. BitShares is a technology supported by next generation entrepreneurs, investors, and developers with a common interest in finding free market solutions by leveraging the power of globally decentralized consensus and decision making.
  9. BitShares looks to extend the innovation of the blockchain to all industries that rely upon the internet to provide their services. Whether its banking, stock exchanges, lotteries, voting, music, auctions or many others, a digital public ledger allows for the creation of distributed autonomous companies (or DACs) that provide better quality services at a fraction of the cost incurred by their more traditional, centralized counterparts.
  10. “The advent of DACs ushers in a new paradigm in organizational structure in which companies can run without any human management and under the control of an incorruptible set of business rules. These rules are encoded in publicly auditable open source software distributed across the computers of the companies’ shareholders, who effortlessly secure the company from arbitrary control.”
  11. BitShares does for business what bitcoin did for money by utilizing distributed consensus technology to create companies that are inherently global, transparent, trustworthy, efficient and most importantly profitable.
  12. BitShares X was first introduced in a White Paper titled “A Peer-to-Peer Polymorphic Digital Asset Exchange” by Daniel Larimer, Charles Hoskinson, and Stan Larimer.
  13. The BitShares community mainly revolves around the BitShares Team and third parties who use Graphene (the toolkit that makes BitShares possible) to create their own Distributed Autonomous Companies.
  14. BitShares has developed an alternative approach to creating price stable digital assets by using a cryptocurrency as collateral in a contract for difference (CFD). With this approach, two parties take opposite sides of a trade, where one party is guaranteed price stability, and the other party is granted leverage. This works as long as sufficient collateral exists, and the contract can be settled by an honest 3rd party with a price feed BitShares is a counterparty-trust free platform for financial smart contracts which operates over the internet, and offers a set of financial instruments that includes CFDs.
  15. Market Pegged Assets (MPA) or “SmartCoins” which represent a derivative with fiat currency, gold, or even other cryptocurrencies as the underlying asset are also available on BitShares.
  16. The BitShares platform contains a flexible feature called “user-issued assets” (UIA) which will help facilitate a wide range of profitable business models based around certain types of services. A UIA is a type of custom token registered on the platform, which users can hold and trade within certain restrictions. The creator of such an asset can publicly name, describe, and distribute its tokens, and can specify custom requirements such as an approved whitelist of accounts permitted to hold the tokens, or the associated trading and transfer fees. These tokens allow for diverse use cases such as ownership tracking, crowd fundraising, IOUs, and coupons.
  17. BitShares provides a high performance decentralized exchange (DEX), with all the features expected of a professional trading platform. Any two assets that are registered on the blockchain (MPA or UIA) may be traded against each other at any time. Orders can be settled almost instantly at speeds of up to 100,000 transactions per second. With this kind of performance on a decentralized exchange, there is no longer a need for traders to expose their funds to the risks of centralized exchanges.
  18. Decentralization gives BitShares robustness against failure.
  19. With BitShares your trades execute in seconds, just like any centralized website interface. Unlike centralized exchanges, there can be no high-frequency trading, front running, or hidden orders. This puts all traders on a level playing field.
  20. Every Dollar, Euro, bitcoin and ounce of gold held as a SmartCoin on the BitShares exchange is backed by up to twice the reserves of traditional centralized exchanges. By always maintaining reserves, you can rest assured that BitShares is solvent in almost any market. All of the reserves are kept as BTS held on the blockchain, and they cannot be stolen, because there are no private keys that can be compromised to steal the reserves.
  21. Assuming a 10 second block interval, Bitshares is mathematically over 70x less likely to orphan after 1 block than Bitcoin after 1 block. After 3 blocks any random orphan will have been resolved and the probability of alternative chains is much lower than the 0.000001% of Bitcoin. By the time Bitcoin gets to .7% orphan probability, BitShares has 60 blocks which would have a probability of being orphaned of less than 10−120.
  22. With BitShares, no one must approve your account. You have complete financial freedom.
  23. At just a few cents per trade, BitShares is one of the cheapest exchanges around.
  24. Companies can issue their own stock on the BitShares network and allow easy, low-cost trading with complete protection against naked shorting.
  25. “What other cryptocurrency exchange allows you to trade in gold and silver?”
  26. The heart of BitShares is the SmartCoin system which enables the creation of 200% collateralized IOUs from the BitShares network.
  27. A BitUSD has all of the properties of Bitcoin combined with the price stability of the US dollar. At any point in time you can sell a BitUSD for at least 1 dollar worth of BTS. If at any time the value of the collateral falls below a certain point the blockchain will automatically buy back the BitUSD with a dollars worth of BTS.
  28. When you hold BitUSD the value of your holdings will remain pegged to the dollar so long as BitShares itself has reasonable volatility. Reasonable volatility in this case means that it can handle greater volatility than Bitcoin has ever seen in its lifetime.
  29. BitUSD is secure against just about everything but an unfixable software bug in the BitShares protocol itself.
  30. Once the market adopts BitUSD and BitBTC as more reliable and decentralized alternatives to BitstampUSD and BitfinexBTC, you will see the majority of trading volume move toward BitUSD vs BitBTC. The only time someone would want to move from BitUSD to BitstampUSD is when they are in the process of withdrawing to the traditional banking system.
  31. “By having the trades executed on the BitShares network, we also eliminate high-frequency trading and front running. High frequency trading and front running depend upon centralized exchanges with high volume and deep markets. When the vast majority of trading activity moves to a decentralized, trust-free exchange, the remaining centralized exchanges become much less appealing to high-frequency traders.”
  32. The BitShares decentralized exchange – also known as The DEX – is a next-generation cryptocurrency trading platform.
  33. The DEX is inherently decentralized, enabling you to trade the BitShares core token (BTS) and a range of trustless price-stable, market-pegged assets such as bitUSD, bitCNY, bitBTC, bitGold and more. These assets can all be traded with zero counter-party risk, putting you in total control of your funds.
  34. One well-known issuer on The DEX is OpenLedger, offering a host of assets including BTC, ETH, STEEM, DASH, LTC, DOGE, and many more.
  35. SmartCoins provide the freedom of cryptocurrency with the stability of the dollar.
  36. SmartCoins are a powerful tool for everyone from speculators and savers, to traders and entrepreneurs.
  37. BitShares designs permissions around people, rather than around cryptography, making it easy to use.
  38. BitShares uses a consensus protocol called “Delegated Proof-of-Stake Consensus”, which BitShares calls a “robust and flexible consensus protocol.”
  39. Delegated Proof of Stake (DPOS):
    • Delegated Proof of Stake (DPOS) is the fastest, most efficient, most decentralized, and most flexible consensus model available.
    • DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way.
    • All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates.
    • Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second.
    • The consensus protocol is designed to protect all participants against unwanted regulatory interference.
    • Under DPOS, every stakeholder has influence that is directly proportional to their stake, and no stakeholders are excluded from exercising this influence.
    • Only DPOS ensures that block production is evenly distributed among the most people and that everyone has an economically viable way to influence who those people are.
  40. BitShares is first and foremost a globally distributed database that is used as a ledger to track ownership of digital assets.
  41. Industrial Performance and Scalability: “Graphene is capable of 100,000 TPS when we pay for the network to go with it.”
  42. BitShares is designed from the ground up to process more transactions every second than VISA and MasterCard combined.
  43. BitShares has borrowed lessons learned from the LMAX Exchange, which is able to process 6 million transactions per second. Below are these lessons and key points:
    • Lessons learned:
      • Keep everything in memory.
      • Keep the core business logic in a single thread.
      • Avoid synchronization primitives (locks, atomic operations).
      • Keep cryptographic operations (hashes and signatures) out of the core business logic.
      • Divide validation into state-dependent and state-independent checks.
      • Use an object oriented data model.
    • Key Points:
      • By following these simple rules, BitShares is able to process 100,000 transactions per second without any significant effort devoted to optimization. Future optimizations are expected to bring the performance of BitShares to levels similar to LMAX.
      • “Based upon the lessons we learn from LMAX, we know that a virtual machine for a blockchain should be designed with single-threaded performance in mind. This means it should be optimized for Just-In-Time compilation from the beginning, and that the most frequently used smart contracts should be supported natively by the blockchain, leaving only the rarely-used custom contracts to run in a virtual machine. These custom contracts should be designed around performance, which means the Virtual Machine should limit the addressable memory to something that will fit within the CPU cache.”
      • “All that is necessary to build a high-performance blockchain is to remove all calculations that are not part of the critical, order-dependent, evaluation from the core business logic, and to design a protocol that facilitates these kinds of optimizations. This is what BitShares has done.”
  44. BitShares is not mineable.
  45. The primary markets for BitShares are:
    • CHBTC (under currency pairing BTS/CNY)
    • SZZC (currency pair BTS/CNY)
    • Yunbi (under currency pair BTS/CNY)
    • BTC38 (currency pair BTS/CNY)
    • Jubi (currency pairing BTS/CNY)
    • Poloniex (currency pair BTS/BTC)
  46. The Twitter account for BitShares is: @bitshares
  47. Market cap history:
    • On July 21, 2014, the market cap for BitShares was $26,424,000.
    • On May 6th, 2017, the market cap for BitShares broke $50,000,000 for the first time, reaching a new high of $62,804,400.
    • From May 8th to 9th, 2017, the market cap for BitShares exploded from $90,255,700 to $140,785,000.
    • On May 19th, 2017, the market cap for BitShares broke $150,000,000 for the first time.
    • Then, one day later, the market cap for BitShares broke $200,000,000 for the first time.
    • On June 7th, 2017, the market cap for BitShares broke $300,000,000 for the first time.
    • From June 9th to June 10th, 2017, the value of BitShares soared from $459,938,000 to $695,200,000.
    • Then, amazingly, the next day the market cap for BitShares soared to $927,625,000.
    • The market cap for BitShares broke the magic unicorn number on June 12th, 2017, reaching a value of $1,033,040,000.
    • As of August 9th, 2017, BitShares has cooled, now at a market cap closer to $400,000,000. OUCH!
  48. BitShares is the first smart contract platform with built-in support for recurring payments and subscription payments.
  49. BitShares has an advanced referral program built directly into its software. Financial networks derive their value primarily from their network effect: more people on the same network increases the value of that network for everyone. BitShares capitalizes on this by rewarding those who sign up new users, and does so in a fully transparent and automated way.
  50. The developers of BitShares formed Cryptonomex to monetize the technology, experience, reputation and good-will they accumulated during their first two years of development and operations. Much of that technology is embodied in Graphene, an industrial strength software platform for deploying third generation cryptographically secure decentralized ledgers known as block chains.
    • Cryptonomex provides software development services to meet the growing demand for custom, high-performance, blockchains and related technology. “Our engineers have designed and built one of the most advanced blockchain architectures on the market, capable of processing over 100,000 transactions per second with an average confirmation time of less than 1 second.”
    • “Graphene based systems have orders of magnitude better performance than first-generation Bitcoin-derived systems or even the second generation ‘Bitcoin 2.0’ systems that constitute our current closest competitors.” Graphene based systems go beyond mere “checkbook” style payments to offer a broad range of financial services distinguished by their transparency and inherent incorruptibility.
  51. In the BitShares network the base token is called a BitShare and carries the abbreviation BTS. It is dividable into 105 = 100,000 sub-units.
  52. In general, all properties of Bitcoin also apply to BTS, namely, they have value, can be transfered on the blockchain and are secured by an Elliptic Curve Digital Signature Algorithm (ECDSA) on the curve secp256k1.
  53. In contrast to most crypto-currencies, BitShares does not claim to be a currency but rather an equity in a decentral autonomous company (DAC). As a result, the market valuation of BitShares is free floating and may be as volatile as any other equity.

BitShares Cashflow Infographic:

“BitShares is a self-funded blockchain that can pay its workers by protocol.”

The BitShares DAC is completely shareholder run. “Now people can be hired by the blockchain.” Where coins like Bitcoin dilute to pay for network security, BitShares takes these fees and directs them towards continual improvement of the network and community.

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