BitShares BTS Guide: Decentralized Asset Exchange & Crypto Bank?

It has been a while since its start, but the aura of suspicion has yet to detach itself from BitShares, partly because of the tendency of such startups to end up being mega scam sites. We just hope it isn’t one of them. But until then, when it finally becomes an undoubtedly safe investment platform, here’s a word of caution – invest what you can comfortably lose!

What Is BitShares

It is a blockchain based decentralized exchange that offers financial and stock market services. Essentially, it works much like buying shares from the securities market, trading them and selling for a profit. It, however, alleges to guarantee several benefits including, security, speed, low-cost and anonymity and has its own cryptocurrency token called BTS and whose function is to power the network.

Let’s be blatantly honest; reviewing BitShares was a little like solving a cryptic puzzle. With its elaborate labyrinth of broken links, separate companies, strategic pivots and half-done businesses, surely its developers ought to have done more.

Sure, Daniel Larimer, its developer, is a pretty good developer and as significantly contributed to the crypto-sphere. But this BitShares thing is a bit over-ambitious, and the whole concept is difficult to decipher. We are not saying it has no potential; rather the enormous communications gap and the absence of someone to break it down might hamper its effectiveness and discourage adoption.

Innovation

BitShares is a decentralized autonomous company – it is an unmonitored system run by computer programs designed to execute pre-coded business ideas. Third parties can use its network to create their own DACs and tokens – BTS generated through the software are only tradable through the BitShares exchange. Essentially, tokens are crowdfunding instruments, either through an ICO or when buying/selling a DAC product.

Bitshares Launch

February 2013 was the year when ProtoShares coins (PTS) were released – something like an ICO. A year later, after lots of hype, BitShares was launched. PTS holders were eligible for BitShares’ first 10% split based on the number of their respective ProtoShares. PTS launch was hitch-free, but exuded incompetence, inexperience, and mismanagement.

How could they announce mining on Bitcointalk an hour before the official launch? Again, why did Mr. Larimer start mining before the official launch time?

Another notable problem is mining difficulty misalignment. It is mysterious that over a quarter of the blocks available to be mined had been exhausted in five days yet it was meant to be done in two years. It thus remains to be seen if it was an unforeseeable issue or intentional to help Larimer. A “fork” that later helped neutralize the damage, though it still brought lots of inconveniences and frustrations to the BitShares community.

Angelshares (AGS) was subsequently introduced following PTS’s shaky launch, but unlike PTS, one could own them by buying – no mining. Again, all AGS holders were eligible for a 10% of BitShares once the platform becomes operational.

About The Delegated Proof Of Stake Mining – DPos

BitShares incorporates a system whereby one can adjust how the Larimer can see a flaw in the mining technology. It is a devolved technique of hiring and firing 101delegated miners who sign transactions on behalf of the community. These delegates ascend to office following democratic voting is done by all shareholders and enhance their reputation based on how valuable they are to the community.

To gain a spot and be among the 101, some use their power and influence, while others simply bribe their way in, promising to lower the high transaction fees. Anything that favors the community, including faithfully executing campaign promises boosts a delegate’s score. But something that suggests a renege or failure to perform regular duties automatically has an opposite effect and the system will “fire” the representative. The Delegated Proof of Stake merely is an extravagance of work done based on computational power, though BitShares considers it as something that can’t be avoided and thus should be embraced.

All that aside, however, it is a bit clear that BitShares blockchain signing system resembles that of Bitcoins. The system is theoretically safe, eliminates needless waste of time and reduces the speed of transactions to a whopping 10 seconds only!

So, Would You Recommend BitShares To Someone?

Yes – why?

Yes because it works. You buy BTS, start trading and earn profits. It isn’t like Golem or MaidSafe.

No – why?

When you are going to trade with fiat currency, you’ve got to exchange your cash against something whose value will at least grow in value vis-à-vis your money. You can’t say the same of BTC or ETH whose can shoot or drop in profit in minutes, yet BTS is made for a stable, organic environment.

BitShares Conclusion

It is hard to determine whether BitShares is a genuine exchange or not. Bitshares can exclusively be exchanged alongside BitShares derivatives and if you would like to convert your BitShares to currency or commodities, be ready to walk a long journey since there’s hardly any fiat to BitShares exchanges currently. It is this very reason that still gives the whole system a “half-baked” status.

This whole review isn’t exhaustive – despite lots of digging and research. BitShares is extremely complex to understand and explain, and it can be hard to term it a strategy for the future. So, in short, as Warren Buffett says, “Never invest in a business you barely know anything about.”