Can't Banks do Bitshares ?

[toknormal]

I was following you until you said Bitcoin is not vulnerable to copycats because there's a lot of hash power behind it already.

Hi, thanks for the reply.

I do actually see hashpower as quite significant. I realise that in theory it isn't, but in practice the difference between the Bitcoin network and any other is so colossally huge that it almost renders them non existent by comparison through sheer force of presence.

By all accounts we should not be watching video, playing games, listening to music or chatting over http protocol because back in the early nineties it was "condemned" as being wildly unsuitable for any of these media. And yet here we are. It just was "made to work" because the protocol had become too prolific  and had gathered enough network effect to make it commercially viable to work round the problems without going back to the drawing board. Now that I've watched Bitcoin see of a flotilla of 1000 competitors, many of them with vastly superior tech, I suspect it is on its way to the same destiny whatever theoretical issues people see with it.

All the same, the Bitshares concept is unique. I can see it being an essential element in a crypto-economy with its ability to address directly the need for exchange rate stability. I'm just not sure that it isn't more like a business than a crypto currency in the sense that the concept can be easily produced, owned and branded by existing corporate dominant entities.

Your remark that "BTS actually has to provide more value than its competitors" kind of endorses that perspective - i.e. that it's a question of branding and that we do not have something unique here. I actually don't think that its a question of providing more value than competitors because the value is academic and deterministic based on algorithms. I think it's a question of adoption.

The market is the commercial trading and retail world. The thing I like about this concept is that (for example) retailers could be easily convinced to accept Bit-USD and hold it since it has a guaranteed exchangeability with the dollar (as long as the peg works - lets see). The more Bit-USD (and other DACs) gets borrowed into existence, the more value the underlying collateral will have.

So it's the BitUSD adoption curve that will determine the BTS value (as I understand it), not the other way around. Traders are also not going to care much which "brand" of Bit-USD they adopt. It won't be according to "which network provides most value" it will be which provides them most exposure to their own potential customer base.

That's where I see the problem.

Visa just have to bring out a "Bit-USD" type product and those potential adopters have then got instance exposure due to Visa's vast brand recognition, thereby driving adoption through the roof overnight with appropriate implications for the underlying collateral of their brand of "Bitshares" network.

[toast]

I was following you until you said Bitcoin is not vulnerable to copycats because there's a lot of hash power behind it already. What? In any case, the competitor has to make a new chain. The mining is not what gives the BTC value. All the hash power does is protect you against modifications of history on a *particular* chain, which POS algorithms are already better than POW for.

Copycats are a threat and anybody can make bitassets backed by "better" collateral. That might make that network feel safer and be more popular, but what BTS is competing on is the "intrinsic" value of BTS as stake in *this* network of bitUSD's. In other words, BTS actually has to provide more value than its competitors! Go figure...

[toknormal]

Hi !

Newb here. I'm a seasoned crypto trader and techy for whom the penny recently dropped re. Bitshares. I've been aware of it for a while but haven't properly had the time to learn about how it works and te differences form a regular crypto.

For the last week, however I've immersed myself  in Bitshares philosophy and techology. First of all, I'd like to say that I think this is one of the most elegant and exciting inovations in crypto I've ever seen, specially from a commercial point of view. I was in the shower the other day thinking through the mechanism of how Bit-USD gets created by matching shorts with longs etc and the lightbulb suddenly went on. I got one of those shivers up my spine where you suddenly see a 1000 mile long road ahead of you.

It's great the way it's a self-balancing system where people who are looking for trading stability are matched with speculators in such a constructive way. I totally get the various aspects of it - collateralised asset vs the underlying shares etc and how that's a potentially virtuous cycle so I don't need to be sold on the concept at all and have already put a few of my BTC into this to get started.

However, I've got some questions which I'd like to ask if anyone was interested - both technical stuff and business model stuff.

First up, I've been looking for downsides to this which are very difficult to see but I do see one. That is that Bitshares biggest innovation is also its biggest weakness - the reliance on the adoption of collateralised assets and branding thereof to give value to the underlying shares. With Bitcoin we are actually trading the "physical gold" as opposed to the paper gold. That's what makes Bitcoin's blockchain have value - it's the currency and collateral rolled into one. No bank or payment processor can replicate bitcoin because they can't reproduce neither the hashpower or the network effect overnight no matter how much money they put into it.

On the other hand, I'm thinking (perhaps wrongly) that they can probably quite easily set up a Bitshares type blockchain and prime it with their own collateral to kickstart a branded collateralised asset (such as "BitVisa-USD or something). Since adopters of collateralised assets are only interested in "a" Bit-USD rather than "the" Bit-USD why would they adopt Bitshare's brand over Visa's ?

This vulnerability to concept-copying is compounded it seems to me by the POS algo. While I agree with the technical merits of this approach, POW does have one thing going for it in this respect which is that it takes time (years ?) to accumulate the hashpower that Bitcoin has. It's generally accepted that banks and big corporations cannot compete with bitcoin - it's too decentralised, to ubiquitous and too advanced (in terms of "rights of passage", confidence etc). But anyone can setup a POS network in a couple of hours and it doesn't need hashpower.

So this is where I see the problem. By being so like a bank in its operating principle it kind of plays into their hands in terms of copyability (at least I see the concept as copyable given that Banks love proxymoney).

If anyone would like to address this issue I'd love to hear what people have to say about it.

Thanks !