Bitshares is a promising cryptocurrency with a decentralized exchange

Sergey Ivanov Developer of his own cryptocurrency, trader. ICO expert. Let's get to know each other!

02.05.2019

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The BitShares project has many interesting properties that make it stand out from most blockchain technologies. The high performance of the distributed network, the security of transactions and the unique functionality of the platform made it possible to use the technology in the field of financial services. The prospects of BitShares as a financial platform operating in real time have been repeatedly noted by subject matter experts and analysts.

Basic parameters of BitShares

Title (ticker)	BitShares (BTS)
Today's rate	$0.02
Current number of coins	2,748,770,000
Maximum number of coins	3 600 570 502
Market capitalization	$56,383,603.67
Changes in 24 hours	-0.71%
Creation date (first block)	2013 (07/19/2014)
Mining algorithm	Delegated Proof-of-Stake (DPoS)
Official site	bitshares.org

Who created BitShares and how?

The historical beginning of BitShares is considered to be June 2013, after the founder of the project, Dan Larimer, published a program document called BitShares on the BitcoinTalk.org resource. It proposed for public consideration an original concept of blockchain technology that uses new principles of intranetwork interaction. The document aroused keen interest among the site's audience; many participants suggested ways to improve the idea. Among the enthusiasts was Charles Hoskinson (one of the members of the Ethereum development team), who later became Larimer’s partner in implementing the project for some time.

A month later, on July 4, 2013, thanks to the investments of the famous Chinese entrepreneur Li Xiaopai, who successfully works in the field of cryptocurrencies, the company Invictus Innovation was founded. The organization was tasked with developing and maintaining the BitShares software.

How to mine BitShares

While working on the project, Larimer came to the conclusion that the entire concept of mining needed to be revised. He believed that the proof-of-work (PoW) algorithm could lead to complete centralization of the grid in all countries where cheap electricity is available. In addition, PoW has made mining digital currency very unprofitable for most ordinary network participants.

A month after the launch of ProtoShares, Larimer announced that all future projects of this altcoin will use DPOS rather than PoW. In his opinion, this simple PoS-derived consensus algorithm, developed in late 2013, will provide mining capabilities to anyone with an average home computer. The fact that the DPOS algorithm is based on proof of stake (PoS) makes it possible to mine BTS in a non-traditional way (like Bitcoin), but by storing a certain amount of tokens in a cryptocurrency wallet.

The BitShares platform was launched on July 19, 2014.

BitShares concept

The BitShares project is not an ordinary cryptocurrency, although in order to simplify the description we will use this term. This is a comprehensive technology that takes advantage of the blockchain architecture and is designed to solve practical problems in the field of finance, data storage and transmission, and information security.

The platform was created taking into account the disadvantages inherent in other cryptocurrencies, in particular Bitcoin:

• relatively slow network operation, limiting the possibilities for its use in tasks requiring high-speed data transfer;
• the dependence of the blockchain on large mining pools, whose computing power influences the network, which ultimately leads to its centralization;
• excessive volatility of classic cryptocurrency;
• high commission payments to miners, which, on the one hand, attract an audience, but on the other hand, turn cryptocurrency exclusively into a speculative instrument.

Structurally, Bitshares consists of several levels:

1. Specialized software. The development and distribution of software is carried out under the Public Domain license, which allows not only free installation, but also free modification of the source code in order to make improvements or customization. The software is, in essence, a distributed database of increased security;
2. Net. All devices with BitShares installed form a single network, each node of which stores a constantly synchronized copy of the database. For the network to fully operate, it is enough for at least two users to be online;
3. Registry. The information in the database is stored in the form of a ledger displaying BTS transfers between individual accounts. The decentralized recording mechanism and cryptographic algorithm allows for maximum security when adding entries to the registry;
4. Company. The BitShares project is an analogue of a joint stock company, in which each owner of the BTS coin is a shareholder who receives their share of the income from the company’s main business - secure transaction processing;
5. Bank. The system offers the possibility of issuing loans secured by BTS, and users can also use BitAssets to form deposits;
6. Cryptocurrency. Any of the BitShares assets, for example, BitUSD, BitGold or regular BTS tokens, have the properties of a full-fledged currency (measure of value, divisibility, transportability).

How to buy BitShares

This currency is traded quite successfully on one of the major Asian exchanges. You need to know that you won’t be able to immediately purchase coins for rubles, euros or dollars. The reason is that this portal works exclusively with cryptocurrency. To purchase BTS, you will first need to buy bitcoins and top up your balance on Binance.

Increase

After this, at the top of the resource you need to select the Shopping Center - Main category. The user is then automatically redirected to the site's trading interface. On the right side you will see a list of the main trading pairs, in which you will need to find BTS/BTC and click on it.

Below the schedule of transactions with currencies there is a special form for concluding transactions. There you need to enter the required quantity and click on the Buy button. After the transaction is completed, the purchased BTS coins will automatically appear on the balances page.

Blockchain technology

The Graphene ecosystem, which is an alternative implementation of the blockchain with the dPoS delegated consensus mechanism, was chosen as the technological basis of the BitShares platform. The principle of operation of this system is to divide the participants of the distributed network into a group of direct validators of a new block of the blockchain and a group of voting participants who elect members of the first group, in other words, delegate their own voting rights. The weight of the vote is proportional to the number of BTS coins currently in the wallet, that is, the Delegated proof-of-stake consensus is a modification of the more common Proof-of-Stake consensus.

Benefits of DPoS Consensus

The advantage of this approach is the increased security of the blockchain, reducing the likelihood of interception of control over the process of forming new elements of the chain. Delegation also allows you to increase the speed of the system: not ordinary users whose wallets are located on ordinary computers or mobile devices, but powerful computing centers owned by large companies, can be responsible for generation.

According to the developers, the maximum speed of BitShares reaches 100 thousand transactions per second, despite the fact that on average it takes no more than three seconds to create one block. For comparison: the Visa payment system processes on average only up to 2 thousand transactions per second, and the maximum network capacity is 56 thousand transactions per second.

Technology and features

Since October 2020, Bitshares has been operating in the Graphene ecosystem, a blockchain implementation that powers the dPoS consensus mechanism. “Graphene” is used, in addition to bitshares, on the Steemit platform (a decentralized analogue of the Reddit blog service), on the gaming site PeerPlays.com, which has its own PPY token, and in other projects.

Figure 3. Graphene ecosystem.

Technical information:

• consensus algorithm - dPoS;
• block time – from one and a half to 3 seconds;
• reward for the mined block – 1 BTS token;
• the potentially achievable number of transactions per second is 100 thousand or more.

Coins and their connection to assets

Bitshares has its own token, traded on exchanges under the ticker BTS. Like any other cryptocurrency, it is volatile and subject to sharp price fluctuations. But if we take into account the “company” principle mentioned above, tokens are considered as shares of Bitshares, backed by services and products of the network, which increases their value and makes it quite stable.

Additionally, BTS tokens can be pegged to other smart currencies.

Debt system

Banking institutions issue loans secured by some collateral, receiving interest for the client's use of the loaned funds. BitShares operates a similar scheme: the platform issues loans in smart currency (BitAsset) - BitUSD, BitGold, tied to fiat money or the value of real assets (oil, gold, etc.).

Linking assets to fiat and commodities

BitAssets, as follows from the above, are linked to fiat and the price of assets. This avoids the well-known problem of cryptocurrencies - volatility. Holders of Smart Coin in BitUSD, BitGold, etc. can count on the stability of their assets, since price movements for the latter depend only on changes in the value of the currency or commodity to which the asset is tied.

Figure 4. BitAssets binding diagram.

Payment guarantees

Unlike banks, which are limited in the use of financial reserves, BitShares is able to use up to 300% of it, which guarantees the payment of interest to creditors in the system.

Possibility of issuing your own tokens

Within the platform, users can create personal altcoins (and conduct ICOs).

Elective management system

Each BTS token represents one user “vote” in the system. The more tokens, the more votes. Using the Bitshares wallet, a user can vote for one or another delegate to whom he would like to entrust management of the network. Those delegates who receive the most votes get the opportunity to add blocks to the chain. In this case, only valid transactions are added; if an attempt is made to forge a block, the block will be rejected by the network, and the delegate will lose trust.

Elected delegates process transactions, including them in the chain, and receive commissions for this from the BTS reserve pool.

Figure 5. The principle of operation of the delegation system.

Decentralized exchange

Bitshares offers a decentralized exchange (Bitshares DEX) without the disadvantage of the traditional main operating center. Typically, this provides a “layer” for communication between the seller and the buyer, but it also creates additional risk for investors and exchange players, since one control center is easier to hack.

The operating principle of a traditional exchange service:

• receiving an asset in cryptocurrency or fiat:
• carrying out an exchange operation;
• order book processing.

All this is done centrally. The characteristic of BitShares is that operations are distributed, and this reduces the risks of counterparties from the influence of the “human factor”, errors with keys, wallets and other elements of the exchange infrastructure.

In addition, asset trading occurs through so-called Gateways - portals that buy some currency for the user and send it to the specified wallet. The money goes directly to the user without being held in the internal account of the exchange, and this gives the funds additional security.

Figure 6. Bitshares DEX online exchange.

Decentralized exchange BitShares

Bitshares Exchange
Another structural level, which we decided to describe in a separate section, is the BitShares exchange (DEX - Decentralized EXchange). Unlike most centralized exchanges that store information about assets, their owners and transactions, the distributed principle of the BitShares exchange allows its participants to personally control the funds they own, using private keys for this purpose. Since the exchange does not have access to assets, any cyberattacks by attackers or attempts by government agencies to interfere with its operation are meaningless.

The exchange subsystem was launched in 2020 with the release of BitShares 2.0. The platform is used for trading BitAssets assets, and the total trading volume is constantly growing, although the potential of the BitShares DEX exchange platform is far from being fully realized.

"Road map"

To date, there is no official roadmap for the BitShares project. The first version was released in 2014 and was designed for the next two years. All stated points of the “road map” were completed on time.

The lack of a roadmap may be due to the fact that the introduction of fundamentally new technologies and functions in BitShares is not expected. The developers declare their intention to concentrate efforts on promoting and popularizing the platform, using marketing techniques in order to arouse interest among ordinary users and large technology companies.

Team

Initially, the co-founders of BitShares were Dan Larimer (who also participated in the creation of Steemit and EOS) and Charles Hoskinson. They developed a business plan and thought through the first stages of the project. However, Hoskinson left the team back in 2013; the reasons for his departure were never given.

The current composition of BitShares developers is not presented on the official website. Since the project operates on an autonomous basis, the size and composition of the team changes frequently. The most complete information about the people taking part in the promotion of BitShares can be found on github.com - on the page dedicated to the ongoing development of the platform.

Current Bitshares Development Team

What is Bitshares (BTS) cryptocurrency?

In reality, Bitshares is more than just a cryptocurrency. In practice, this is an entire autonomous company that uses the cryptocurrency of the same name – Bitshares (BTS) coins – within its system. We can say that this coin is something like a tool for interacting with all financial activities. The key feature is that Bitshares are special tokens that are completely free from volatility, that is, strong price fluctuations. Thus, all cryptocurrency exchanges in the world can trade these assets along with dollars, euros or the same gold.

This is a kind of smart currency that is tied to traditional fiat money and the most common goods. It is thanks to this that the stability of the Bitshares rate is ensured, because tokens are not sold quickly.

The platform of this cryptocurrency itself is created on a special blockchain, which is constantly being improved and finalized by a whole group of crypto enthusiasts. One of the leading developers of the system is a fairly well-known specialist in the cryptocurrency community named Daniel Larimmer. Moreover, Larimmer is not only the leading developer of Bit Shares, but also the rather popular cryptocurrency STEEM. Moreover, he recently acted as one of the initiators of the EOS platform. It is noteworthy that the first developments of BitShares appeared back in 2013.

Thus, the developers of the BitShares project themselves state that, despite the general high volatility of cryptocurrencies, their product is backed by a collection of other projects developed on their unique blockchain.

At the same time, thanks to the cryptocurrency platform, all users have the opportunity to create decentralized and completely autonomous projects (DAC) that operate on smart contracts. And precisely because of the DAC, different companies will be able to automatically sell off their shares and clearly distribute profits among all their shareholders. BitShares technology is also used in the development of the decentralized cryptocurrency exchange Bitshares DEX, which has a Russian localization RuDex.

How to mine BTS

The peculiarities of the technology do not allow mining BTS in the traditional way, using a powerful computer or a specialized computing station. Nevertheless, coin mining is available, and if desired, every owner of a BitShares wallet can do it. To do this, you need to take into account several factors and rules that apply within the platform:

• mining is available only to users with the “Delegate” status, which is awarded by the BitShares community through elections. The total number of delegates is always 101, which means candidates can only compete for a vacant seat;
• the functions of the delegate are to confirm transactions and monitor the performance of the system, for which they are allocated a commission;
• The results of delegates' work are subject to careful monitoring.

As you can see, mining at BitShares is not so simple, and first you need to understand the principles of the system. Earnings are also available through a referral program - by attracting new users to the system, you can receive a certain number of coins.

Mining

Bitshares mining in its usual sense is completely absent here, because the creators decided to abandon this practice in favor of the performance and stable operation of the entire system. Crypto mining still remains accessible here, but takes on slightly different forms, and the number of people simultaneously engaged in it is quite small.

Most users are faced with the question of how to mine Bitshares to have a direct impact on making a profit. To do this you need to know a few things:

• Only delegates from communities engage in mining;
• the delegate monitors the signing of transactions and the proper functioning of the entire network;
• every person who has tokens can become a delegate by voting;
• reporting on activities carried out is carefully checked in various ways.

As a result, mining Bitshares is now available to everyone, if you choose the right policy and at the same time have fairly good equipment.

Where to buy “coins”

Purchasing BTS is only available on a few marketplaces. In addition to the popular Binance exchange, cryptocurrency is freely traded on the following services:

• Gate.io;
• Poloniex;
• ZB.com.

Buying BTS on the Binance exchange
Before purchasing coins, we recommend that you look at the BTS rate on all exchanges, since the cost of cryptocurrency on different trading platforms may differ.

How to create a BitShares wallet

Creating your own BitShares wallet will not be difficult - we offer you simple instructions:

1. On the website bitshares.org you need to go to the Downloads section, which contains the distribution kits of the installation program. Select the type of your operating system and wait for the download;
2. After launching the installer, the user is prompted to create a new wallet and select an access password for it. Please note that the password will only be valid on this computer;
3. Next, you need to create an account by choosing a name for it. The account name will be required when registering on third-party services, in particular exchangers. You can link several accounts to one wallet, and therefore several names;
4. We recommend using the wallet backup function. After completing the reservation procedure, the program will provide an access key (the so-called brain key), which must be saved, preferably in the form of a physical record on paper or in an encrypted file.

How to create an official BitShares wallet?

This tutorial will walk you through the step-by-step process of registering a fully functional account on the BitShares blockchain.

Step 1 - Download the Software

The first step is to download and install the BitShares client.

The latest official release can always be found and downloaded on GitHub at the following address: https://github.com/bitshares/bitshares-2/releases/latest

Once you have downloaded the latest version for your computer and installed the BitShares application, launch it and accept the license agreement. You will then see a screen where you will be asked to set a password for your wallet.

The password will be used to protect your wallet, which contains your private keys, while they are stored on your computer. Make sure you choose a password that is strong enough and not used elsewhere.

Note: Do not assume that just because you remember your password, you will be able to recover your funds from another computer that also has the BitShares client installed. We will tell you about the process of creating a backup copy of your wallet in the following paragraphs.

Step 2 - Create an account

The next step is to create an account, where you will see a screen similar to the one below:

Once you have chosen an account name that suits you, click the “Create New Account” button.

Note: An account is a personalized public key that allows you to receive funds, log in to websites, and sign messages. A wallet can hold one or more accounts, which means you can create multiple accounts from your wallet, so you don't have to worry too much about finding the perfect name.

Once you click “Create New Account”, you will be registered automatically as shown below:

Advantages and disadvantages of the project

The list of advantages of the BitShares platform is quite extensive:

• decentralization of all intra-system transactions and operations with assets. The influence of the human factor is completely eliminated;
• high performance of distributed computing, theoretically reaching 100 thousand transactions per second. The transaction processing speed is comparable to well-known commercial analogues operating in the financial sector;
• The dPoS consensus algorithm does not require significant computing power to confirm the entry of a new block. In addition, the risk of centralizing control over the blockchain by large mining pools disappears;
• based on the BitShares platform, it is possible to create autonomous decentralized companies (DAC), issue tokens and distribute profits between shareholders;
• the user's wallet can be called by a simple and understandable name instead of a long alphanumeric sequence;
• There is a small fee charged for completing the transaction.

The disadvantages include the peculiarity of providing assets, the price of which is tied to real assets and fiat money. For example, the price of BitGold will always be equal to the price of gold. But since this asset is backed by BTS coins, if the cryptocurrency rate decreases, the collateral will not be enough to redeem the asset.

BitShares Technical Information

• Consensus Algorithm:
  Delegated Proof of Stake DPOS
• Blocking time:
  average 1.5 seconds, maximum 3 seconds, wait time 1.5 seconds for 99.9% probability of irreversibility
• Block reward:
  1 BTS (from the reserve pool)
• Irreversible blocks:
  (2 * BLOCK_INTERVAL * WITNESSES / 3) ~ 34s
• Coins not in reserve: 2,599,900,000
  BTS (2017 September 30)
• Coins in the reserve fund: 1,000,668,097
  BTS (2017 September 30)
• Maximum
  coin
  :
  3.600570.502 (constant)
• Maximum transactions per
  second
  :
  100,000+ potential (proven 3,400+ tks/s)

Notably, it is a lightning-fast blockchain with a 1.5-second average block time and a throughput of 100,000 transactions per second (which is more than all credit card transactions worldwide combined).

BitShares is governed by a Decentralized Autonomous Company (DAC), which allows BitShares holders to provide input and ultimately decide on the future direction of BTS. This DAC operates independently but in parallel with the original source code base, which is developed and tuned continuously.

Your wallet address is your username

This is much better than long, unwieldy strings of letters and numbers that simply invite poor user experience and bugs. Your username acts as your wallet (like your social media or google login). It's much easier to remember and type "john-smith", then 21x9d8sv37sd6m282u4j2hg9h4orbjht2u98f3.