What Exactly is Bitshares?

Bitshares is founded by Dan Larimer the genius behind Bitshares, STEEM and EOS. So what exactly is Bitshares?

Answering the question “What is BitShares?” has been one of the most difficult challenges I have faced. BitShares is so many things to different people and there are a thousand different ways of understanding what BitShares is. This post will tell you what BitShares is to me, its founder. Before getting into the long-answer to this question, let me give you the executive summary. BitShares is one of the most important tools that any community can use to secure their freedom; an idea whose time has come. After reading this post I bet you will agree.

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"All the forces in the world are not so powerful as an idea whose time has come."
- Victor Hugo

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There are many different layers at which we can understand BitShares. Each layer has its own benefit and usefulness.

• Center Layer - Bitshares is software

At its most inner layer, BitShares is software. To be more specific, BitShares is a distributed multi-user database with update permissions managed by a defined set of rules and public key cryptography. At this level it isn’t very interesting to most people, but is still very important. Software is open source, easily copied and modified, and most importantly protected by free speech. This means that almost nothing can stop BitShares at this layer short of a global event that destroys almost all digital data. Governments once attempted to regulate cryptographic software as a weapon and impose export controls. Governments lost that battle long ago and no longer attempt to regulate or control the spread of free software. In the case of BitShares the software is in the Public Domain.

Usually we don't care much about information like this. for some, it's all about the price and the money they can get in return. because of this few we are now enjoying the privilege of using cryptographic software as now we know as cryptocurrency. Some of us are now rich because of these men, because of the idea they imposed.

• 2nd Layer - BitShares is a network

Moving up a layer, BitShares is a network. A network of computers owned by individuals all over the world run the BitShares software and keep their databases synchronized according to the rules defined by the software. The BitShares network can survive as long as there are at least two computers that can communicate with each other over the internet. This network of distributed computers ensures that the database is robust against failure. Every single computer on the network maintains a full copy of the database which means no one can change the public record. This immutable public record becomes the foundation of higher layers.

"owned by individuals all over the world run the Bitshares software" This is the best part, it is not run by CEOs that when they don't agree with each other, they divide their ideas and fork their software. this are run by individuals. We will go in much depth later about the individuals Dan is taking about.

As long as there's a computer that is connected in the network, Bitshares will continue to provide services to the public.

• 3rd Layer - BitShares is a Ledger

A ledger is a database containing account balances and transfers among them. Every bank, company, and organization that deals in financial matters has a ledger that tracks who owns what. The BitShares ledger is very robust because it is built on the prior two layers: highly distributed network, that is fully transparent, and secured by the latest cryptography.

Compare this to ledgers in use all around the world today. Ledgers based upon paper can be lost, stolen, modified, burned, or miscalculated. Digital ledgers managed by software such as Quick Books or Quicken are centrally managed, can be updated, changed, back dated, corrupted or otherwise misused. Advanced ledgers such as is in use by our banking system are still subject to human error, lack transparency, are only backed up a hand full of places and often times are internally inconsistent.

Just ask the owners of MF Global where the depositors’ funds went? Ask any of the big banks who really owns the gold and how many times the same ounce of gold has been used as collateral; they cannot tell you with any degree of certainty. The ledgers in use today around the world are fundamentally broken when it comes to reliably tracking property rights. How do we know they are broken? Have you ever heard of cooking the books? Today’s ledgers have insufficient technological barriers against fraudulent edits; the ultimate protection is a manual audit, but audits are time-consuming, expensive, non-public and only as trustworthy as the auditor (think about Enron).

The BitShares ledger changes the game by providing a badly needed advancement in accountability.

How can you say the money you holding or in your pocket is yours? How do you say that it's real and it's backed by gold collateral. Can you prove the money in your bank is really yours?

When we bought our land and house we sign a contract between the seller and us. This contract proves that we are now the owner of that land. In blockchain technology there is what we called smart contract that records every transaction that happened to bits of data of cryptocurrency that are being transferred from one wallet to another. This makes sure that the crypto is really yours.

• 4th Layer - BitShares is a Company

Companies are merely a ledger tracking joint ownership in a common venture. Companies issue stock which is nothing more than a ledger entry tracking what percent of the company each individual owns. Companies are managed by a board of directors which is elected by the shareholders, the votes of which are logged in the companies ledger. Companies have a business model that hopes to earn profit for the shareholders and they maintain detailed records of all business transactions which, in theory, can be audited by the shareholders to ensure management isn’t embezzling money.

In the case of BitShares, the database tracks ownership of shares known as BTS. Each share can vote for 110 delegates, the top 101 delegates by vote become responsible for running the software and maintaining the network as well as performing other tasks for which they are paid by the shareholders. BitShares is a company in the business of processing transactions for a fee and the profits from this business are shared with the shareholders via stock buybacks.

Bitshares is a company run by people, people that bitshares holders trust. In bitshares everyone who owns a Bitshares can vote for people they think that deserves to serve them and will bring good to the company that is Bitshares.

• 5th Layer - BitShares is an Exchange

The New York Stock exchange is a company that maintains a ledger to track ownership of stock and debt issued by other companies. It earns money from transaction fees and has its own stock as well. Like the New York Stock exchange, BitShares allows people to issue their stock or debt to be tracked and traded on its distributed ledger.

Here in Bitshares Decentralize Exchange, we can use our Bitshares as collateral for bitUSD using margin positions. This make sures that every bitUSD is backed by a collateral equal to the same value as a USD. We can also make our own Assets in this network. If you look in to the Bitshares exchange you can see several assets that are made in the Bitshares Network such as HAIRSHARE, WHALESHARE, and many more.

• 6th Layer -Bitshares is a Bank

Banks are companies that maintain a ledger to track debt collateralized by other assets such as housing. This debt is the money used around the world, denominated in dollars, euros, yuan, etc. Banks earn income by charging interest to the borrowers and attract capital by paying interest to depositors. BitShares creates dollar denominated debt collateralized by BTS. This dollar denominated debt is a BitAsset known as BitUSD. BitShares supports any number of BitAssets including BitGold, BitSilver, BitOil, etc. Whereas normal banks practice the unsustainable business of fractional reserve banking, BitShares uses at least 200% reserve and is often over 300% reserve. Whereas normal banks use illiquid assets to back (collateralize) debt payable on demand, BitShares uses highly liquid BTS as collateral. Whereas normal banks are bailed out by tax payers, BitShares depositors have direct claim on the collateral.

Here in Bitshares Network there is what we called bitAssets. These assets have an equivalent value and backed at least 175% in collateral by the owner.

• 7th Layer - BitShares is a Currency

Anything can be used as money in the right circumstances. Gold, silver, giant stones, paper, debt, and cigarettes have all been used as money. The rich and powerful have often used bearer shares (paper stock certificates) as a form of money. In the case of BitShares there are many different assets that can be used as money including BTS, BitUSD, BitGold, and BitSilver. All of these assets have the property of being fungible, divisible, transportable, and impossible to counterfeit.

I have previously said that the best money is like a Flux Capacitor. It can move value though time and space as quickly as possible with minimal loss. Gold is great at moving value though time, as demonstrated by the fact that gold mined 1000 years ago is still worth something today. Fiat currencies produced by governments have a shelf life of less than 100 years, during which they slowly lose all of their value. Unfortunately, gold and paper money are not very efficient at moving value through space. Physically moving boxes of gold or hundred dollar bills long distances or across borders is very time consuming and expensive.

Bank deposits are very efficient at moving value through space via wire transfers, but they are still expensive and relatively slow (days). Bank deposits can also lose all of their value far more often than paper dollars because banks regularly go bankrupt.

With BitShares and BitGold, you get many properties of gold (such as price stability and freedom from counter-party risk), as well as the benefits of bank deposits (you can transfer millions of dollars worth of BitGold to the other side of the world in seconds).

Whether you use BitShares (BTS) as virtual bearer shares, BitGold as a 300% collateralized virtual gold deposit, or BitUSD as an alternative to fractional reserve bank deposits, BitShares provides the best money/currency in the world.

What makes bitshares as the best currency? Moving money can be difficult especially gold. Let's say you are moving tons of gold to one country to another. The expenses for moving such a huge amount will also cost you huge money. But in Bitshares sending your. Millions will cost you a mere fraction of a cent and that will be done in just a second.

• Final layer - BitShares is a Country

Countries are what communities become when they become large enough and powerful enough. Countries are sovereign and issue their own currency. Countries are run by elected governments, usually with some kind of senate or parliament like BitShares’ delegates. While we have a long way to go, it is my vision to grow BitShares to the point where the ecosystem is able to make governments irrelevant to our daily lives. This means all dispute resolution and law enforcement will be managed by the BitShares community in an entirely non-violent manner by leveraging smart contracts, bonds, insurance, and other systems on the BitShares ledger.

itShares is an Idea… …whose time has come. The specific software, network, and ledger that BitShares is today has very real limitations. But the idea behind BitShares, BitAssets, and non-violent self governance is so powerful that all the forces in the world cannot stop it. The idea will live on in one form or another. The entire concept of numbers on a ledger having value exists entirely in the collective mind of the BitShares community. It doesn’t matter what form that ledger takes, what matters is that we all share a common idea regarding who owns what. We no longer rely on governments to be the arbiter of property rights. BitShares, the software, is just a tool that enables our community to reach unambiguous consensus on property rights. In many ways, it is no different than Rai stones which are large immovable stones used as money which were valued because of community consensus.

BitShares is a small town on global scale.

Just like every community, Bitshares community is helping each and everyone even the ones who hold a small amount of Bitshares. from the Delegates that who imposed changes in our community to the small stock holders that keeps on believing that Bitshares will one day be a complete society where everyone including you will be part of a much greater community.

Together we can make Bitshares community a much more bigger and better community. Join us!

Source : http://bytemaster.github.io/update/2014/12/18/What-is-BitShares/

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_{That's me trading on Bitshares DEX}

I'm Nem Dayao,
Your Bitshares Enthusiast.

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"I am currently accepting donations for my project to spread information about Bitshares Network and it's market assets. If you want to help me considering donating some in my Bitshares wallet: doc-mac18
Thank you!"