All criticism is welcome.
This is more directed at people that already know about Bitcoin. It is bullish on BTSX but with a touch of realism that respects Bitcoin, yet it still highlights the fact that Bitcoin is not perfect.
BitShares is a family of DACs (Distributed Autonomous Corporations) that analyzes, designs, develops, and operates cryptocurrencies as businesses. The Bitcoin "business" is ran at a huge loss every year due to the amount of coins minted to pay for the security of the network and all the electricity burned in the process. Due to the number of coins minted to pay for the security of the network, it dilutes Bitcoin's value by inflating the cryptocurrency and requires the influx of new money to the tune of millions of dollars a year to retain its value. Even when all Bitcoins will have been mined (around the year 2140), we can only speculate as to whether the transaction fees will be incentive enough for Bitcoin miners to continue to secure the network as the amount of electricity burned makes it expensive. The value will need to go way up and be widely adopted, or the transaction fees raised (which is unfortunately one of the selling points of Bitcoin.)
Whereas Bitshares DACs are profitable for its share holders, or in other words people that own the Cryptocurrency. It makes the Cryptocurrency model profitable by adding features that generate revenue in the form of fees which are subsequently destroyed which creates a truly deflationary money supply, by eliminating the wasteful use of electricity required to keep a PoW network secure by implementing a new PoS variant named Delegated Proof of Stake, and by not printing more Cryptocurrency to pay for others to secure the Blockchain as they are also paid with a percentage of the fees that are generated by use of the Cryptocurrency and its profitable features. The BitShares DAC business model is one of the only truly deflationary Cryptocurrencies and that is how it turns its profit, as no new Cryptocurrency is ever printed and the fees generated from transactions, features and services on the block chain are destroyed.
The first DAC of the Bitshares DAC family is BitsharesX. It has a decentralized exchange allowing the trade of market pegged assets that resemble the value of their real life counterparts which are named Bitassets (read: derivatives.) This allows someone to store their Cryptocurrency without the volatility that goes along with them by storing them in FIAT derivatives, and also allows them to diversify their Cryptocurrency portfolio into commodity and stock derivatives such as Gold, Silver, Oil, Apple stock, and Google stock. Allowing users to store Cryptocurrencies in more stable assets is a good way to hedge against bubbles, and that can help support the price of the Cryptocurrency as no money exits the ecosystem when purchasing Bitassets.
Along with providing stabile assets and allowing diversification, Bitassets allow someone to gain more leverage by going “short” on any of the Bitassets if they are bullish on the short term value of a certain Bitasset. By getting more leverage, you are taking a risk that the value of a certain asset will go up in regards to the collateral you provide. Bitassets also accumulate interest by being granted a portion of the trading fees that are collected by trading each Bitasset. The interest is currently around 1.5% APY, with the ability to grow if BitsharesX and Bitassets are more widely adopted. The Bitassets are backed by 200% of the value of each particular Bitasset in the BitsharesX Cryptocurrency, so there is no fractional reserve banking or printing of Bitassets without collateral. The Bitassets and the BitsharesX cryptocurrency can all be used (sent, received, spent, or traded) in the same way Bitcoin can but with several advantages.
BitsharesX uses as free of a free market approach to keep the Bitassets close to the value of their real life counterparts. It is basically a free market with “training wheels” to protect users from possible market attack vector dynamics and to keep the market pegs as close as possible to their real values. You will also be able to use any Bitshares Bitasset or Cryptocurrency as payment for features and services in other DACs as all Bitshares DACs will be interconnected. There are DACs currently planned for decentralized voting (makes voting fair, open, and honest), domain name services (not subject to domain seizure and domain name squatting deterrent), music (invest in artists you like and own royalties on their music by funding recording and other expenses), and gambling (provably fair gaming and removal of counter-party risk via trusted third parties.)
The base Cryptocurrencies that the DACs operate off of are inherently better currencies than Bitcoin and most other Cryptocurrencies. One of these advantages is that it has 10 second block times, which is much better than Bitcoin's 10 minute block times. Even with it being much faster, it has been redesigned from the ground up for that 10 second confirmation to be more secure than 1 Bitcoin confirmation which takes 10 minutes, as one confirmation means it has been confirmed by 60% of the network by its Delegates. This allows them to scale better by being more efficient, and makes transactions faster. The wallet makes users to use "Bitcoin's best privacy practices" by generating a new address for every transaction using deterministic public and private keys, which greatly increases financial privacy whether someone is privy to the best financial privacy practices or not. There is also an optional alias system that allows users to register account names, so the long nonsensical addresses are never seen or used if someone doesn't want to use them. You can send the base currency or any Bitasset to "Coinhoarder", and the network automatically generates a new spending and receiving address for both parties behind the scenes.
In my opinion although Bitshares DACs are revolutionary, at this point in time the features and improvements thus far will likely not be enough to overtake Bitcoin’s network effect, infrastructure, community, and thus its value. I believe that it will still grow to be very large serving niche markets and it is even possible for them to overcome Bitcoin with an expanded feature set more DACs will provide, a fully developed infrastructure, more development on the base currency and features of the DACs, and a larger community and user base. Bitshares DACs are developing at a fast rate with extremely talented and dedicated developers, and a supportive community. If Bitcoin sits back and does nothing to improve upon itself, I think it will likely see its market share slowly dwindle down to the point that it is no longer the Cryptocurrency to beat. I see innovative cryptocurrencies, and the DAC model, as potential Bitcoin killers at some point down the road. That is unless Bitcoin starts improving itself at a quicker rate, and stops criticizing all block chain innovations and features as unneeded gimmicks. Projects like Bitshares DACs are potentially Bitcoin killers, and it may make Bitcoin zealots feel better to call them “scam coins” but they are truly revolutionary. They are certainly a leap in the right direction for Cryptocurrency as a technology, and many would argue that it is a much better solution than Bitcoin already.
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, have funds stuck in Bitsharesland that they can't access right now. I have faith they will be able to get it fixed soon, although I haven't tried restoring my wallet with the latest release yet.
