BitShares is mainly an open source and blockchain-based software that shields its users via cryptography with the aim of sustaining a ledger of transactions. This platform allows for a decentralized asset exchange that is very much alike to New York Stock Exchange (but this time, it is for cryptocurrencies and it is devoid of the need to put any trust in a central authority to oversee the handling of funds). This decentralized asset exchange improves trading by making use of computers that are internationally networked.
BitShares is modeled with Graphene, a C++ open-source blockchain implementation that is utilized as a consensus mechanism. Several other projects like PeerPlays.com and Steemit.com make use of Graphene which certainly shows real-world usage.
BitShares also provides for an altcoin called “BTS”. This cryptocurrency token can be exchanged between accounts and can also be used to acquire fees for network operations and as a collateral for loans. One major feature of BTS is its sturdiness which can’t be boasted of by other first-generation digital currencies – even Bitcoins. As a result of making copies of the BTS database, BitShares can sustain a record on the blockchain that adheres to an established set of rules with no likelihood of it ever being tampered with.
Due to the fact that BTS tokens are utilized as collateral for different decentralized financial services (e.g. smart contracts, banking, currency rails, etc), BitShares should be seen as an equity – not a purist currency. The platform makes use of a Delegated Proof-of-Stake consensus mechanism (DPoS) which means that stakeholders can democratically vote on consensus issues. 101 delegates are elected to the BitShares network and they receive transaction fees as rewards for securing the network. This network is one of the fastest in the industry because its DPoS allows for a total of ten transactions per second.
In the Proof-of-Work (PoW) system, confirmation won’t be given until all the untrusted miners have verified various transactions. Meanwhile, the DPoS mechanism reduces the total confirmation time for each of the nodes.
Fresh BitShares are produced in each block, and the greatest amount of these shares per block reduces in the long run (similar to Bitcoin). These new shares are sometimes handed to workers of BitShares that have been voted by the shareholders to run the company. Established on an open-source software, BitShares is programmed on a solid blockchain technology that is akin to the technology leveraged by Bitcoins. Forked from Bitcoin, the maximum limit for the production of BTS is 3,500,000,000.
- High Performance and Scalability
According to developers of the platform, it is able to process 100,000 transactions per second (tps) and it can do even better with minimal optimization. In comparison, VISA handles 2,000 tps averagely with a maximum capacity of 24,000 tps.
- Decentralized Asset Exchange
BitShares provides its users with the ability to trade on the embedded and fully decentralized exchange (DEX). Conventional cryptocurrency exchanges may be able to use their own private servers to store, handle and control all the funds, but they also have the problem of theft (like Mt. Gox), vulnerability to hacking (e.g. Bitfinex), or being shut down (as was the case with lBTC-e ). The goal behind DEX is to be unable to protect its users’ private keys which are cryptographically synonymous with a strong password of any normal internet account. With this, traders can maintain full access to their money as well as the trading platform is more resistant to attacks.
- Dynamism in Account Permissions
With this platform, multiple accounts can control a specific account and this mirrors the positioning of permissions in real life organizations where several people are able to control funds. This will ensure an environment where hacking and theft is significantly reduced.
- Referral Rewards Program
This blockchain has established a referral program that gives incentives to users that introduce new people to the platform. The reason is that more users will strengthen the security of the network as well as increasing its market value.
- Assets Created with User’s Discretion
The users on this platform have the ability to make their own custom tokens. They can use these tokens to either advertise and improve their businesses or facilitate crowdfunding for a startup. Issuers of the token can choose its name, description, initial distribution, trading fees, etc.
Smartcoins’ value on this platform is established to be perpetually protected by BTS, its main currency. These tokens can also be converted to BTS at any time without the requirement of using an exchange.
- Project Funding Approved by Stakeholders
This platform possesses its own reserve pool where it collects and stores transaction fees. The funds from this reserve can be utilized for the enhancement and maintenance of the network. Users can propose a project while seeking to fund. The other users will then vote to conclude if the proposal is viable enough to be approved. This method will ensure that the platform is self-sustaining and relies less on outside funding.
- Delegated Proof of Stake
This is a very instrumental feature of the platform. Users can be able to “delegate their stake” thereby allowing the election of Witnesses who will collect transactions and bundle them into a block while also broadcasting the network. These witnesses are paid for their services using the reserves pool.
- BitShares serves as an exchange, like the New York Stock exchange. It doesn’t only control a ledger of its own currency, it also follows the ownership of stock and debt circulated by other companies. This means that users can make use of the BitShares network to trade stock or debt on the network’s distributed ledger.
- Bitcoin intends to decentralize currency while BitShares is aiming to decentralize exchange networks instead. BitShares’ currency is supplementary to its exchange network. A network that aspires to transform traditional cryptocurrency transactions.
- The BitShares platform ensures that its users can change their cryptocurrencies to stable assets by turning those coins into a different cryptocurrency whose value is attached to a real-life asset (for instance, BitUSD is attached to the value of USD).
- BitShares has the ability to represent a plethora of assets. As well as being able to act as a stand-alone virtual currency, it can also be utilized as a representation of the US Dollar or gold.
- BitShares’ affordability puts it in good stead with users looking to delve into the cryptocurrency world.
- BitShares’ value is still volatile and it will likely continue to be that way until the market finds and comes to terms with a fixed inherent value.
- A sudden crash in value will immensely create doubts about the system and it will disrupt the ability to carry out safe transactions (e.g. a loan), particularly on a large-scale.