What is Bitcoin United? Why should we care?

If you follow @stan, you'll have seen his recent series of posts on something they're calling "Bitcoin United," or BTC-U. At face value, BTC-U is a radical "upgrade" to the Bitcoin protocol. It moves Bitcoin away from its power-intensive and increasingly-centralized mining roots to a completely different type of blockchain, namely the Bitshares blockchain. I'll include the following cheesy graphic that I had no part in creating:

On Bitshares, it's possible to create a sub-token and distribute it in an automatic way to various Bitcoin addresses. This is actually how all of the first 2 billion Bitshares were distributed originally, as a "sharedrop" to people who owned PTS altcoins and to those who had contributed Bitcoin to the Bitshares development process. The BTC-U team is proposing to take a snapshot of all the BTC balances on the main bitcoin chain, and give each of them a proportional number of a brand-new BTC-U token on the Bitshares chain.

What this means if you hold BTC in a private wallet at the time of the snapshot: You'll be able to import your BTC private keys into the Bitshares wallet, and poof you'll have as many BTC-U as you have BTC. This won't affect your original BTC in any way, but now every single Bitcoin address will also have access to these new BTC-U tokens. The BTC-U tokens won't have any "smarts" about them; they're not governed by a smart contract like bitUSD or bitCNY, but their distribution will exactly match that of Bitcoin at the time of the sharedrop. This means they'll be exactly as scarce as regular Bitcoin. You decide for yourself how valuable that is.

What's the point? Well, here's where you have to read between the lines. Ostensibly, BTC-U is being advertised as a simple upgrade to Bitcoin. The reality may well be a bit more subtle. One thing is for sure: if BTC-U were to be adopted as a true heir to Bitcoin Classic, it would be the greatest thing ever to happen to Bitshares. You might even expect that market power would shift inexorably to BTC-U's parent chain, namely Bitshares. Every BTC-U transaction would mean another couple fractions of Bitshares would be spent on transaction fees, which is the main source of revenue for Bitshares.

Even if BTC-U never is adopted as a true successor to Bitcoin, anybody who wants to claim theirs will need to interact with Bitshares in some way and they'll learn that it is so much better than bitcoin in so many ways. On Bitshares, transactions are confirmed almost instantaneously! Amazing. Free marketing, in some sense. Let's hope the Bitshares network is actually up to the added traffic!

Will it work? Well, this will probably depend on what you mean by "work." Bitshares is quite unlike many other cryptos, and I suspect that it's viewed with disdain by the usual Bitcoin maximalists who seem to think that mining is the most important part of a cryptocurrency. As such, the sharedrop will likely not even be claimed by many people who hold Bitcoin. Also, a huge amount of Bitcoin is held on exchanges; if the exchanges don't allow their customers to claim their BTC-U, that won't help anybody.

But it will probably be a big marketing boost for Bitshares, and it will bring many people to the platform who may not otherwise have discovered it.

If you want to claim your BTC-U when (or if) the sharedrop happens, you'll need a Bitshares account. You can get one by clicking this link!.