Launched by a US-based cryptocurrency entrepreneur and a software programmer Daniel Larrimer in 2014, BitShares represents a decentralized platform based on blockchain technology. The platform allows its users to switch cryptocurrencies between their own wallets without having to upload them to any centralized party. The project was developed in response to the crisis of trust in centralized exchanges after ill-famous Mt. Gox was hacked and thousands of users lost their bitcoins.
Apart from the crypto exchange features, Bitshares offers a whole set of financial tools for businesses and all these tools are fueled by a native cryptocurrency BTS. Known in the past as Protoshares, the platform merged several products into a single platform and received a new name Bitshares in November 2014.
The key problem with all centralized cryptocurrency exchanges is that users have to entrust their digital funds to a third-party for safekeeping. This brings down the whole point of using cryptocurrencies that were initially created with the purpose to provide users with an alternative means of payment that would be independent of centralized financial institutions. With centralized exchanges, you have no control over your money and this puts your funds at risk. Regardless of how old and reputable a platform is and what measures it claims to take in order to ensure funds’ security, it may still fall under hackers’ attack or simply go bankrupt.
Things are different with Bitshares. The platform has no access to users’ funds, it simply provides them with a mechanism to exchange cryptocurrencies between their own wallets at a given rate. With Bitshares, you are the only one responsible for the security of your assets and the only one governing the access to them.
The possibility to exchange cryptocurrencies is not the only feature provided by Bitshares. Larrimer has invented a platform that can serve as a single entry point for any business or individual in the world of cryptocurrencies. A network, a bank, a ledger, an exchange, a company, community, software, and currency - all this is combined under one hood of Bitshares. In fact, the project outpaces its own time as the demand for such a platform is yet to come.
In addition to this robust functionality, Bitshares has practically unlimited scalability as it allows processing up to 100,000 transactions per second. This has become possible thanks to the Delegated-Proof-of-Stake consensus mechanism and Graphene blockchain that BTS is based upon. Compared to Bitcoin’s 7 TPS and Ethereum’s 19 TPS, Bitshares has proved to be much better prepared for the influx of users and capable of handling an even higher level of demand than the one experienced in 2017.
Unlike Bitcoin, Ethereum and the majority of other digital assets that can only be stored on illegible an unmemorable wallet addresses, Bitshares offers its users named accounts. This reduces the risk of making a mistake when sending funds to someone else as users don’t have to fear making a typo in addresses where they send the money to.
BTS use cases
The cryptocurrency BTS plays an important role in the Bitshares ecosystem. It is not a simple cryptocurrency as it comes with a much broader set of use cases.
First, BTS can be used in deposit receipts. While banks and other similar payment systems such as PayPal issue deposit receipts on users’ balances in a centralized manner, Bitshares moves all these databases to a decentralized blockchain.
Next, BTS can be used as a basis for issuing customized assets. Any company or an individual can issue own securities on Bitshares and distribute them among investors. Also, it’s possible to issue BTS-based stable coins with bitUSD and bitEUR as the most popular examples. In order to issue such a stable coin, BTS should be locked up in a smart contract as collateral.
BTS can be used as reward points by merchants to stimulate their customers. Event organizers accept BTS when selling tickets and then allow users to cryptographically check-in. Other use cases of BTS include crowdfunding, asset seizing, Know-Your-Custome procedures and many more.
Bitshares conducted private IPO in 2014 and there’s no information available on how much money was raised for the product’s development and who the investors were.
BTS can be stored on a web wallet and a desktop wallet which is available for download on the project’s website and is compatible with all popular operating systems.
The key person standing behind Bitshares is Daniel Larrimer. This is quite a notable persona in the world of cryptocurrencies as he is the only one to invent a blockchain-based system that would resolve the scalability issue and remain decentralized at the same time. The idea of a decentralized cryptocurrency exchange was born in 2013. Larrimer shared his invention with Ethereum’s co-founder Charles Hoskinson who helped him develop it further.
Apart from Bitshares, Larrimer has two other successful projects behind his shoulders, Steemit and EOS. Steemit is a decentralized blogging platform letting its users make money for the content they create and get rewards directly to their own wallets without having to share their earnings with any third party. EOS is a blockchain-based platform for dApps creation with ultra-high throughput indices. At the time of writing, it’s one of the most active blockchains according to blocktivity.info.