Here is my edit. Sorry the formatting is very sloppy, also it is sprinkled with TODOs for citations.
I will make an account on wikipedia and incorporate these changes when I get home.
Bitshares was conceived and initially bootstrapped by Invictus Innovations Incorporated, a C-corp founded in 2013 and located in Blacksburg, Virginia. Today Bitshares consists of many partnerships between c-corps, investors, developers and entrepreneurs all co-operating or competing to build the DAC industry.
The concept of a DAC was made theoretically possible through the disruptive innovation of the blockchain. The blockchain was first used in the creation of the crypto-currency called Bitcoin. Since the creation of Bitcoin numerous other crypto-currencies have been developed. While crypto-currencies have had a great impact on the finance industry, the Bitshares community sees them as being only one of the many ways in which the blockchain technology can be used. Utilization of blockchains to build DACs for other industries (such as music, gaming, charity, insurance and more) may hold the potential to have a great impact those industries as well.
Decentralized Autonomous Companies (DACs)
The concept of a Decentralized Autonomous Company (DAC) was first conceptualized by Daniel Larimer. DACs are not legal entities and instead serve as a metaphor for describing how transparent, irreversible ledger systems such as Bitcoin operate.
DACs run without the use of human involvement because they are governed by a set of rules that are hard coded into the Software. The software is distributed globally and is audited by everyone running the software. DACs can then be used as a tool for people to do business with.
You can pay for the services the DAC provides using shares in that DAC, the shares in the DAC have value because they are needed to make use of the services the DAC provides. Just like with flesh and blood companies, you can obtain shares in the company through purchasing them or working for them.
The Bitshares community forms a critical part of the industry. The community works together and competes on ideas, philosophies, development, feedback and discussion.
The Bitshares industry is built largely on volunteer work. However some funding has been used to accelerate the growth of the industry. The BitShares-AGS public donation fund allows investors to claim BitShares-AGS. Venture capital has been obtained by Invictus Innovations, a C-corp which initially conceived and bootstrapped the Bitshares industry - this money was largely invested in AGS [TODO CITE].
AGS (Angel Shares) are shares in an angel fund that supports the research, development and creation of the bitshares technology. Those who support the fund are given public credit as 10,000 AGS shares are acknowledged each day, proportional to the amount donated. AGS donations started on January 1, 2014 and run for 199 days.
The Bitshares-AGS explorer website can be used to view statistics on Bitshares-AGS donations and view details on how Bitshares-AGS funding is being spent.
Bitshares-PTS is a minable crypto-currency which is earned via momentum proof of work. The crypto-currency has a total possible supply of 4 million coins and is traded on various crypto-currency exchanges.
Any DAC developer can preallocate any fraction of shares in the DAC to holders of Bitshares-PTS. The social consensus [TODO] states that DAC developers utilizing the bitshares_toolkit software suite should allocate at least 10% of each DAC's shares to holders of BitShares-PTS. Bitshares-PTS thus represents a potential stake in future DACs. In this way Bitshares-PTS has functioned as an important tool in developing a community of Bitshares stake holders.
## DACs Under Development:
Bitshares Bank and Exchange
Bitshares Bank and Exchange (BitsharesX) is a DAC currently being build by the Bitshares community. BitsharesX provides the services of storing value (like a traditional bank), a Derivative market and CFD markets) . The derivatives will exist in the form of bitUSD, bitGold, bitOil etc.
Users will be able to hold derivative assets such as bitUSD in the BitsharesX bank and thus use the bank as a savings vehicle. Users will also be able to trade derivative assets and can thus use the DAC as an exchange.
Bitshares Decentralized Namespace Services
The Bitshares-DNS project aims at building a family of DACs that provide namespace resolution services. The first DAC in this family is .p2p[TODO cite], which aims to be used to resolve the .p2p top-level domain. There are a number of advantages over the traditional DNS system.
• With traditional DNS, the registrars lease your name and can take back your ownership at any time. With .p2p, nobody can update your DNS record unless you share your private keys.
• The use of blockchain technology removes the need for certificate authorities.
• and removes the incentive for domain name squatting by providing a mechanism to speculate on the value of the namespace without having to buy names in masses.
• By utilizing a mechanic similar to an auction, .p2p domains are sold for their perceived market price instead of a fixed price.
This project is similar to Namecoin and the .bit project. [TODO cite this whole section]
Bitshares-Music provides a different mechanism for artists to earn revenue in the music industry while allowing for free distribution of content. The concept revolves around the artists selling shares in their songs rather than copies of their songs. The artists would also own a certain number of shares in their own song.
Fans and speculators are then able to speculate on the future value/popularity of the songs. The advantage of selling shares in a song is that share value is attached to song popularity. Fans have incentive to buy shares and then share the song to increase its popularity. This mechanism also allows for artists to crowd fund their careers.
Bitshares-ME is a DAC which will allow individuals to issue their own individual shares. These shares can be used to represent their own IOUs that can then circulate. This can be seen as a form of peer-to-peer lending in which the individual holding the IOU is extending credit to the issuer.
Bitshares-Gaming and Bitshares-Charity
Blockchain technology allows for peer-to-peer games to be played without the use of trusted hosts. Bitshares-Lotto is a game currently in development.
The Bitshares community is experimenting with ideas on how to use DACs to provide aid to charities in a sustainable way. It is likely that Bitshares-charity will be integrated with Bitshares-Games such as raffles, lotteries and bingo tickets. Users paying to use Bitshares-Games would have the opportunity to specify a qualified charity to receive part of the proceeds.
Ideas have been proposed for developing a DAC which can provide an insurance like service. DAC ideas for insurance attempt to remove the conflicts of interest which exist in the current insurance industry where the insurers have financial incentive not to pay out claims and insurers price the risk of events.
Users will be able to take out different amounts of insurance by purchasing different amounts of shares in a share pool. Because the income of the DAC is divided by the number of claims on a cash flow basis. The user will then be able to make a fractional claim proportional to their amount of insurance, this will determine the amount of time it takes for the user to be paid out.
In order to discriminate between false and real claims by users, claims adjusters are used. The claims adjuster is a third party who evaluates claims for a fee paid by users. To remove the claims adjusters ability to pay out false claims a prediction market is utilized where speculators determine the amount of funds a particular adjuster is allowed to pay out.
This DAC focuses on creating a transparently honest voting system where voters are cryptographically verified. DAC voting would be designed to be anonymous and also let voters change their vote at any time without any ability to manipulate the count.
DAC voting systems could have multiple applications. They can compete with/complement scientific polling to provide the public with voting scores. DAC voting systems can also compete with third-party election companies which are often hired to run private elections for organizations and be used as a voting system for listed companies.
There are a number of existing cryptoequity systems that behave like DACs.
Ripple is the first system that has entered the scene that allows individuals to extend credit to one other on a decentralized ledger system. This ledger system facilitates the settlement of debt among many parties, some of whom may not know each other directly.
Namecoin is a cryptocurrency which allows users to register names. It is similar to the Bitshares DNS project and the use of its "d/" namespace to resolve the .bit TLD is similar to the .p2p DAC. Namecoin services a number of other namespaces as well.
stashing these for now - let's revisit them more carefully later
The Nxt network has built in support for registering aliases that can be used in commerce and communication.
Lending is one of the more difficult systems to create a DAC version of because it generally involves matters of trust and credit worthiness. These things typically require individual judgment and ultimately accountability.
Keyhotee is a software product being developed by the Bitshares community and is focused entirely on registering usernames. It attempts to combine three cryptology based services into one; internet wallet management, identity management and communication.
The concept revolves around storing your communications, your money and your identity information on your local computer in an encrypted form. When engaging or transacting value with others you do so directly (peer-to-peer) thus theoretically avoiding man-in-the-middle attracts, third party spying and many forms of identity theft as they are known today.
The 10 Natural Laws of the Crypto-asset Universe
The concept of 10 natural economic laws which apply to the crypto-asset universe was first proposed by Stan Larimer, a prominent member of the Bitshares community. These laws are based on new thinking in the Bitshares industry where donating the shares of a new DAC to potential users is seen as an efficient method of distributing shares. This method contrasts with the more traditional thinking where developers would let shares be mined into circulation. Furthermore these laws place an emphasis on the importance of community support and involvement for the successful development and use of a DAC.
Developers of DACs have the option of allocating varying portions of shares in the DAC whom ever they choose. However it is easy for others to fork/clone the software used to create the DAC and launch a similar DAC with a different allocation of shares. It therefore become essential that developers find the right mix of allocations for their shares in order to win the favor of the community while being able to pay for the development of the DAC.
Below are the 10 natural laws:
1. All software must be open source to be trusted.
2. It is ethically acceptable to clone alt-coins from anybody else’s open source.
3. If you demonstrate a good idea, others will clone it – without market objection.
4. They will clone it if just to give it a better name.
5. They will clone it to slightly modify one of its parameters.
6. They will clone it to better appeal to another group of stakeholders.
7. They will clone it to make it more profitable (and therefore more appealing).
8. These clones will compete in the free market.
9. The clone that appeals to the biggest and most influential crowd wins.
10. The clone that achieves the Network Effect first may ultimately get to ignore the first 9 rules.