What is BitShares?
BitShares is a decentralized cryptocurrency exchange that is part of the Microsoft Azure blockchain. BitShares was created in July 2014 and is the brainchild of Steem and EOS cofounder and CTO Dan Larimer, along with Ethereum and Cardano cofounder Charles Hoskinson. Along with Steem, BitShares uses a Graphene layer, and both are among the most active blockchains on the market.
Introduction to BitShares BTS
BitShares dove head on into the forefront of the battle to regulate cryptocurrencies. Ethereum and Bitcoin are being reviewed by the Securities and Exchange Commission to determine the key differences that indicate a crypto token is acting as a security. Many crypto exchanges are rushing to either submit the proper forms to become SEC-approved exchanges or pull out of the U.S. market altogether
Whether cryptos act as a security, commodity, or currency in decentralized exchanges is hotly being debated for many of the top 100 cryptos. However, even in the U.S., the entire industry isn’t being painted with broad strokes. Regulators like the SEC and DOJ are carefully researching and classifying cryptos, blockchains, ICOs, and exchanges on an individual basis.
Dan Larimer comes with an impressive resume and a clear vision that is building towards a massive slice of the global market for decentralized exchanges. Microsoft Azure is a window to the the world and if the cryptocurrency exchange is competitive then the legal issues could prove to be mere distractions.
This is a decentralized exchange with the right partners. It’s based on a delegated Proof-of-stake verification system and the blockchain technology of the BitShares network is at the cutting edge. Cryptocurrency exchanges are fighting tooth and nail for your service right now, and BitShares is well positioned to take on the likes of Binance in the long run.
It’s a part of the Microsoft Azure Blockchain as a Service Package. Before deciding if BitShares can survive government regulations and outlast cryptocurrency exchanges like Coinbase and Binance, let’s review the BTS coin and tokens.
Breakdown of BTS
BitShares has a total supply of 3,600,570,502 BTS. Its peak price was $0.907259 on January 2, 2018. It is not mineable.
BTS is considered a legacy coin as it predates most exchanges (and publications) and is responsible for the crypto trading pair concept. It’s also the first delegated Proof of Stake blockchain and uses community-elected delegates for governance.
BitShares is following PayPal’s lead by pushing for mass adoption through a referral rewards program. Currently a BitShares basic account is free (although it doesn’t qualify for the rewards program), and a Lifetime Members account is $100 and comes with several 80 percent fee discounts.
Lifetime Members can also earn $80 for every other Lifetime member they refer. This means, like with Isagenix or Herbalife, you can make a decent living just referring people, regardless of the BitShares BTS token prices, since it’ll be adjusted to equal roughly $100 at the time of referral. There is at least a reason to buy BitShares BTS.
BTS coins are more of a security than a currency, since they’re used as collateral, and they cannot be mined. Tokens can be created on the BitShares network, which are convertible to BTS, which is then convertible to BitAssets, which are tied to real-world markets.
BitUSD, bitEUR, and bitCNY are all based on the current price of the dollar, euro, and yuan, while bitGOLD and bitSILVER are based on the prices of gold and silver, respectively.
For people in volatile markets, including South American countries where hyperinflation has take hold, this kind of stable crypto option could be a safe haven when the local fiat currency is struggling.
BTS is accepted on a variety of crypto markets, including CoinEgg, ZB.COM, OpenLedger, DEX, Binance, and LBank. Over $5 million of BTS is traded on a daily basis, and trading pairs include BTC, USDT, and ETH.
The official BitShares Wallet is available on a variety of desktop OS and web verions.
Differences Between Securities, Commodities, and Currencies
Although generically labeled as “cryptocurrencies,” cryptos actually serve three different functions (not including the infinite uses of blockchains).
- Currencies – Cryptos that act as currencies aim to be a system of money or legal tender to be used in purchasing goods and services or paying debts. Examples of currency cryptos are Bitcoin, Litecoin, and Zcash.
- Commodities – Cryptos that act as commodities are a purchase of future goods sold on the bulk market. They’re technically interchangeable for goods, and examples of commodity cryptos are Hempcoin, Bananacoin, and, according to current U.S. law (although this may change) – Ethereum.
- Securities – Cryptos that act as securities are an investment in a common enterprise with the expectations of profits solely from the efforts of the promoter or a third party. The US SEC is heavily scrutinizing which cryptos act as securities, and exchanges, and BitShares, along with popular exchange Coinbase, is working with the system.
Legal classification of cryptos is being hotly debated throughout 2018, so these categories are based on functionality. Beyond functionality, the SEC, CFTC, IRS, and other regulators also consider whether an ICO was held. ICOs are commonly compared to IPOs, so the coin value, especially on a smart contract network, could be considered tied to the viability and expectation of future profitability of the enterprise.
However, as we previously discussed in this article on Airdrops, coin hodlers don’t receive the same rights and protections as stockholders. It’s a sticky situation that requires a strong stance, which it’s good to see BitShares talking head-on.
Formerly known as ProtoShares (PTS), BitShares is a p2p distributed equity ledger and network that uses a Delegated Proof of Stake algorithm. BTS tokens are used as collateral for decentralized financial services like bitAssets, smart contracts, etc.
It thus far processes 3,400 transactions per second but has the potential for up to 100,000 or more. The Decentralized Autonomous Company (DAC) manages the network, and BTS holders ultimately decide on the future direction of the entire network. This makes it an ideal stakeholder platform that conforms to the SEC’s expectation of registered securities.
There is also real tech at work here, and the proof of stake blockchain platform could be the driving force for the token in the end.
On the consumer side, it also uses a username for a wallet address, saving you the trouble of finding a safe place to store your sdjfkh45r43uyigfdsifuhn43kj543gfuysdbf43ki3 username. (Note: do not send ETH to this address. Seriously. We actually have to say this.) A wallet address is no big deal these days, but the BitShares platform has a solid system that is user-friendly for beginners.
Also BitShares is pleasing investors with a rainfall (the company refers to airdrops as raindrops) of BEOS tokens based on its joint project with EOS.
Bits and Pieces of BitShares Future
Speculation is all we can really about cryptos, as nobody truly knows the future value. A lot of what you read online is marketing, PR, and unsubstantiated. We don’t profess to know the BitShare Platform’s future, but we can hypothesize, based on today’s regulatory environment, how the industry may evolve over the next five to ten years.
It’s important to understand cryptocurrency is a bubble, and we haven’t even begun to see the culling, despite billions already being lost to failed projects.
Crypto is following the Dotcom Crash at a much faster pace, but that’s not to say everything created in the Dotcom era at the turn of the century is now irrelevant. Amazon, Facebook, and Google are among the largest Fortune 500 companies (a fact you can look up on Wikipedia), and all these giant websites are dotcoms.
Long-Term Winners Will Burst Crypto Bubble
Cryptos are the new dotcoms, and for every Amazon.com, there’s a Pets.com that lost a lot of people a lot of money. The same will be true in cryptos over the next decades and beyond. Crypto and blockchain technologies aren’t going anywhere. They’re the new wave of technology and will power and supplement AI, VR, IoT, and more.
BitShares has a solid network in place to avoid being a tragic failure of a crypto market crash. Its price-stable smart coin-backed network removes middle-men to optimize trading, even allowing OTC trades. Assets are paired with fiat currencies, precious metals, etc., to eliminate market volatility. It also uses the Open Ledger DEX and Gateway to increase trading possibilities.
It actually functions better than Wall Street’s current regulations, as it eliminates High-Frequency Trading and other forms of insider trading popularly used to game markets. It isn’t, however, immune to the effects of a market crash, and the BitShares platform has a long road ahead of it to prove itself worthy of its ambitions.
BitShares is ready for government regulation with a smart contract blockchain built with Wall Street in mind. Equities are backed by assets and used for streamlined financial exchanges with a distributed ledger to track trades as necessary. With the right partnerships in place and forms filed, BitShares can find itself in a very lucrative position, thanks to these key components.
- BitShares is a smart contract network that can host tokenized apps. Tokens are exchangeable for BTS, which is then exchangeable for bitAssets, which are stablecoins pegged to real-world markets.
- BitShares not only complies with regulations, but it may prove to be an improvement upon existing systems with algorithms designed to stop insider trading.
- BitShares works like Ethereum, which insists it isn’t a security, yet calls itself a security. Its structure should be studied and compared to any crypto or blockchain prior to investing.
Investing in cryptocurrency can be profitable, but with those profits come danger. Transparency is important in financial services, and while other cryptos focused on redefining banking, BitShares aimed at the heart of Wall Street. Whether it’s a kill shot, or they both must learn to live together, remains to be seen.
Keep a close eye on the financial sections, as well as the cryptocurrency news, and buy BitShares BTS at your own risk.