BitShares (BTS): An "Old" Blockchain with Plenty of Options
October 16, 2018
This article was originally written and published by Arnold Hubach from BlockchainStories. Click here to read the official article (Dutch language).
In this article, we take a closer look at BitShares. In the world of cryptocurrencies, BitShares Blockchain can be considered as an age-old blockchain and perhaps for that reason it also is an undervalued one. In this article you can read about the history, applications and possibilities of the BitShares Blockchain.
The History of BitShares
The origin of BitShares Blockchain lies a few years in the past. On June 2, 2013, the very first idea behind BitShares Blockchain and its core native token BTS came up. ‘Bytemaster’ Dan Larimer got the idea to create a decentralized exchange where Dollars, Euros and other currencies could be traded without the need for FIAT deposits. Larimer shared this idea on bitcointalk and soon a whitepaper followed. Many negotiations, investments and developments later, ProtoShares was born. This brings us to the second part of ‘the history of BitShares’. BitShares PTS, previously called ProtoShares, intended to get attention with BitShares X. This was a coin that was backed by a built-in business that would make it a ‘coin without a speculative basis’".* This was then an exchange and a decentralized bank. This means that with your BitShares X-coins you owned a part of a bank, instead of the other way around. You, the owner of the coin, were in theory the boss of the bank.
The Origin of Protocoin
The development of this construct took a lot of time and that is why ProtoCoin was brought forward. This was a copy of Bitcoin, which offered a temporary solution for the BitShares X. However, many new applications emerged from this ProtoCoin. The idea came to use this coin as an investment for new applications for the blockchains that were conceived. And perhaps better: As an investment for the implementation of (parts of) these new ideas. This ensured that developers (and therefore also competitors) could be rewarded for different types of applications, because suddenly there was a common interest behind the idea.
Premiums were issued to developers for the development of ProtoCoin (PTS), while in the background the work on BitShares (BTS) continued. All of a sudden there were two trump cards: BTS and PTS. On 5 November 2013, the first block of PTS was mined. This was done by Super3, an independent developer, and here was the beginning of ProtoShares. With that, ProtoShares was a coin made by the Community, for the Community. Because of the great success it was soon decided that BitShares PTS should be the basis for more. BitShares X was thus pushed to the background.
In the weeks that followed, the realization came that mining was not the optimal solution. The ‘normal citizen’ would not immediately benefit from this and the technical people could easily benefit from mining. A month after the ‘ProtoShares revolution’, Bytemaster came up with a new idea: Proof-of-Work mining had to be replaced by a variation of the Proof-of-Stake consensus mechanism: TAPOS. In other words: Transactions as Proof-of-Stake, and the later evolved Delegated Proof-of-Stake. This algorithm can work on any computer which makes mining unnecessary. With this development, BitShares Blockchain went a step further in building its ‘Community-driven’ governance system. With the Delegated Proof-of-Stake mechanism tokenholders could suddenly vote on the future of the platform.
Activity BitShares (Source: Blocktivity.info)
What can BitShares do?
There are many applications within the ecosystem. The platform is run and maintained by the BitShares Community. This Community is a group of individuals and organizations working together on the development of the Blockchain. Through the DPoS mechanism, adjustments can be made and innovations can be implemented. BitShares is perhaps best known for its exchange, but much more applications and use cases are possible. Blocktivity (see table above) also shows that BitShares Blockchain has enormous activity. The activity shows the number of operations of the past 24 hours.
Several SmartCoins have been created on the BitShares Blockchain. Some of them are pegged to the value of a FIAT currency or assets from outside the crypto world. This could be the American Dollar, the Chinese Yuan (CNY) or gold and silver. In the ecosystem, examples of these so-called StableCoins can be found such as bitUSD, bitCNY, bitGold and bitSilver. The respective value of these StableCoins is backed by the native core token, BTS. Both, StableCoins and BTS can be traded on the DEX.
Decentralized Exchange (DEX)
This brings us to another feature of BitShares. The platform places the orders within seconds and claims to be able to handle the trading volume of the NASDAQ. Furthermore, it is a decentralized exchange, which means that there is no third party that owns/controls your money.
Applications for the Industry
This platform is much more than just a few currency pairs on a blockchain, with a fast exchange to trade these pairs on. Entire platforms can be built on top of the BitShares Blockchain. A great part of this is Graphene. Under the name Cryptonomex Inc, some core developers have developed an open source toolkit from which a blockchain can be built. This open source toolkit also forms the basis of, for example, Steem. However, more great projects were built with Graphene. Steem (it), DasCoin, Scorum and so on.
"GRAPHENE IS CAPABLE OF 100,000 TPS WHEN WE PAY FOR THE NETWORK TO GO WITH IT"
BitShares Blockchain was developed to be self-sufficient. This is possible by giving the tokenholders power over the future of the blockchain. There is a Reserve Pool with a considerable amount of BTS that is collected by the transaction fees. Every day, 432,000 BTS are added to this pool, allowing a team of developers to be paid to maintain and improve the network.
Future of BitShares
This blockchain offers so much more possibilities than is known to the general public. The applications are huge and (almost) infinite, the DPoS protocol ensures that it is not a rigid blockchain. BSIPs (BitShares Improvement Proposals) are presented, which contain improvements and adjustments to the Blockchain. This can be accepted or rejected by the votes of the so-called tokenholders. The platform may be old, but is definitely not ‘outdated’. The combination of StableCoins and the entire ecosystem that is being built on them is also enormous. All in combination with the Graphene toolkit. Because BitShares is self-sustaining, new BSIPs and improvements will also be added and implemented in the future.
"WE INTEND BSIPS TO BE THE PRIMARY MECHANISMS FOR PROPOSING NEW FEATURES, FOR COLLECTING COMMUNITY INPUT ON AN ISSUE, AND FOR DOCUMENTING THE DESIGN DECISIONS THAT HAVE GONE INTO BITSHARES."
7418 AJ Deventer