Bitshares as a Fund Management Platform

Crypto investment funds is becoming the new trend in the financial world. Yes that's right, remember all your trader friends who used to make fun of Bitcoin and tell you they trade "real" stocks and commodities?, well those guys are now looking for ways to get their hands into cryptocurrency, and who can blame them? Bitcoin alone rose over 100% in value last year, Ethereum was worth 0.95 cents on the 1st of January of 2016 and went up an impressive 1000% to this date; those are numbers nobody can ignore.

There is of course one main issue that has to be addressed carefully with this new breed of Crypto-Funds and that is transparency. In a traditional investment fund the assets need to be audited by professional accountants and lawyers, this not only takes time but it also costs a lot of money and the level of transparency can still be questionable since the investors are not able to see movements from the fund's account in real time.

How can Bitshares help?

One of the most important assets of Blockchain technology is transparency, funds and transfers are all written in a public ledger and can be seen by everyone with a simple explorer.

Bitshares is an alternative digital currency system which can be used to create market pegged assets for various major global currencies and commodities, these assets are called "smartcoins". Take BitGOLD for example, a digital asset which works like Bitcoin, secured by a peer-to-peer ledger called a blockchain, but the value is tracked by a price feed reported by witnesses and backed by 200% collateral in BTS (the core token for Bitshares). Smartcoins work very similar to Steem Dollar, one could say that Steem Dollar is a smartcurrency of the steem ecosystem.

Bitshares has several smartcoins that could be part of a "Bitshares Investment Fund":

• BitGold
• BitSilver
• BitBTC
• BitUSD
• BitEUR
• BitTwenty (An index that follows the price of the top 20 cryptocurrencies)

So now that we have the assets we need to group them together into one token that will represent the Fund (similar to ICONOMI.INDEX token). Bitshares can also be used for personal token creation (User Issued Asset). We can create a token, lets call it BTSIF and carry out an ICO so that investors can buy, trade and transfer shares of the fund.

The Smartcoins can be kept on cold storage for safety and the token that will represent them all will be BTSIF. Investors and the general public can confirm the fund's balances by looking at its account on the explorer cryptofresh.com

So we have made this Fund as decentralized as possible but one thing remains very centralized and that is the "treasurer", the person who has all the private keys and manages the fund. Well Bitshares allows you to create multi-sig wallets and that is what the fund creator must do. He needs to keep all the funds on a multi-sig wallet with at least two more members, these other signers could be:

1. Trusted cryptocurrency members.
2. Bitshares Committe Account: The Committe Account is controlled by elected Committe members, any person that holds Bitshares can vote for Committe Members.
3. Bitshares Witnesses: Since it may be a bit tricky to convince all Committe members to support and protect the fund, you could also have two or more witnesses as signers, who are also elected by the shareholders.

It is important that 2 out of the 3 signers can broadcast a transaction, so in case something happens to one of them you can still recover the funds.

I believe is only a matter of time until big investors to take notice in Bitshares and create the most decentralized and safe Crypto Fund, what do you think?

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@chitty
vote_for_witness youraccount chitty true true
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