What is BitShares?
BitShares (BTS) is a proof-of-stake (PoS) blockchain network that gives users access to a decentralized exchange (DEX) and a utility token — the BTS — which is used for staking in the PoS consensus and to vote on network proposals. The Bitshares DEX allows users to peg a digital asset to a real-world asset, allowing nearly any asset to trade freely over its blockchain.
The co-founder of Bisthares — Daniel Larimer — was initially working on a proof-of-work (PoW) blockchain called Protoshares when he realized proof-of-work mining was flawed. Larimer wanted to create a consensus algorithm that was less energy intensive than PoW, and that allowed any computer to participate in mining — not just computers with GPU and ASIC chips. So in December 2013, Larimer created the delegated proof-of-stake (DPoS) consensus algorithm and the following year in July 2014, BitShares launched.
In the BitShares DPOS network, users can use their BTS tokens to vote for delegates that verify transactions, create blocks, and broadcast blocks to the network. Each BTS represents one vote, anyone on the network can run to be a delegate, but only the top 101 can maintain the blockchain and receive the block reward which is set by the governance committee
The BitShares network is governed by a committee of elected individuals and businesses. The committee manages the direction of development on the BitShares network and they can change the blockchain’s parameters.
A shareholder is considered any individual who holds BTS tokens. A shareholder can use his or her BTS tokens to vote in four different elections; the election for the delegates on the network, the committee members on the network, the workers who join the network, and whether or not the worker’s proposals should receive funding from the BTS working budget.
The decentralized exchange (DEX)
The BitShares DEX gives users the ability to digitize and trade nearly any real-world asset on the blockchain. Users can create tokens pegged to real-world assets backed by BTS in an amount equivalent to that of the real world asset, and trade it freely on the DEX; there are four unique offerings accessible through the Bitshares DEX.
BitShares allows users to create a token for nearly anything they can imagine. By simply clicking a few buttons and defining the parameters of the token, a user can launch their own coin and trade it against any existing coin on the Bitshares DEX. User-issued assets can be deployed for a number of purposes; for example, an individual can create their own token with its own use case, or a company could crowdfund by creating a token and trading it on the Bitshares decentralized exchange.
Market pegged assets
A market pegged asset is a digitized asset on the BitShares blockchain that is pegged to a conventional asset in the real world. Any user can issue a market pegged asset as long as they put down another asset as collateral.
Any user can create BitAssets, which are basically any real-world assets that have been digitized on the BitShares blockchain. However, the BitAssets owned by the BitShares Committee are called SmartCoins. A Smartcoin is a market-pegged-asset that always has at least 100% of its value backed by BTS tokens and can be collateralized at any time in a collateralized loan. For example, BitUSD is a SmartCoin pegged to the dollar backed by at least 100% of its value in BTS.
Distributed autonomous companies
BitShare gives its users access to a number of financial services; through the Bitshare DEX, a business can launch a distributed autonomous companies (DAC) — a company run without human involvement governed by the protocols programmed into the network. The DAC feature of the DEX allows companies to trade their shares freely on the BitShares DEX. Users can buy shares of the DAC or choose to work for the DAC and receive shares of the DAC in return for providing their services. Owning a DAC’s shares could entitle users to a share of the DAC’s profits or give them voting rights in company decisions.
Bitshares allows any of its users to run for Delegate and earn the privilege to add blocks to the Bitshare blockchain and reap the block reward. BitShare also allows users to digitize nearly any real-world asset and freely trade it on the Bitshare decentralized exchange. This opens the door to a plethora of financial services for those who use the BitShare Platform. From giving users the ability to launch a decentralized autonomous company to giving them the ability to create assets that can be freely traded against any of the assets on the BitShares decentralized exchange, BitShares is the blockchain network that provides users with the foundation to get this done.