Author Topic: Happy Birthday BitShares!  (Read 3582 times)

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Offline Stan

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Re: Happy Birthday BitShares!
« Reply #15 on: June 04, 2014, 04:03:14 am »
Maidsafe, 3d Printing of Gun parts, Solar Roadways, and of course...DPOS.

You left out perpetual motion, warp drive and the flux capacitor...
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Offline Stan

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Re: Happy Birthday BitShares!
« Reply #16 on: June 04, 2014, 08:07:31 pm »
This is just a Preliminary Rough Draft.
Don't read it yet unless you want to help us improve it.
When polished, this will be an ongoing multipart blog series on bitshares.org

If you are wondering what you may missed in the first year,
or want to ponder how we got to where we are, read on…


The History of BitShares
Part Two


November’s Innovation – BitShares PTS

BitShares PTS (formerly called ProtoShares) was developed for an entirely different reason than what its paradigm-shattering role became shortly after launch.  In fact, every one of the subsequent breathtaking innovations came about from reacting to opportunities and lessons learned from the previous month’s breakthroughs and, um, screw-ups.  Necessity is the mother of invention.  I wish we could say we had it all planned out in advance, but no business plan survives first contact with the market.  We are merely blessed opportunists.

Initially, we were just looking for a way serve people interested in our first objective, BitShares X. A way for them to start mining and trading it early.  BitShares X was first viewed as a coin backed by a built-in business that gives it more worth than the speculative value of a meme or some alternative technical implementation.  In this first case, that integral unmanned business was a decentralized bank and exchange.

Yep.  Your coins would now contain a bank, not the other way around.

Needless to say, this kind of second-generation crypto-company takes a lot longer to build and early adopters were growing impatient.  So our plan was to just offer a plain old Bitcoin clone whose coins would be a BitShares X prototype - upgradable into BitShares X “bitshares” when it was ready to launch.  We would simply initialize the first 10% of the bitshares to match all the public keys of PTS holders, giving them instant matching control of the same number of bitshares in BitShares X.   This is how the concept of a protocoin was born.

We envisioned many exciting uses for protocoins.  For example, they could be used as
  • A way to separate investing in an idea from investing in one or more implementations of the idea.
  • An incentive for competitors to cooperate on building an implementation because they could all be common stakeholders in the idea.
  • A way to vet an idea and attract venture capitalists based upon prediction market evidence that the idea has value.
  • A way for developers to invest in an idea and raise funding by generating growth from showing more and more evidence that they will successfully implement the idea in a way that benefits investors in the idea.
  • A way for someone with a good idea but lacking the ability to implement it to share it and benefit from its ultimate implementation by somebody else. 
  • A way for an entire community to participate in “pre-mining” in a way that might be deemed fair (e.g. for unmanned businesses that must start out with enough currency to operate and enough credibility to get market depth on exchanges from Day One.)
  • A more graceful “soft fork” way to upgrade to version two of a DAC by instantiating the new in parallel with the old and let the owners (shareholders) not just the employees (miners) decide when and if value transitions from the old to the new.
  • A way to build a community and get them to cooperate on the implementation because they all have a stake in the idea.
So you see, right off the bat we are talking about two assets:  PTS and BTS.  Before long, we would be talking about entire families of such assets.  Second-generation crypto-currencies that we began to call crypto-equities because the coins also seemed like “shares” in the underlying unmanned business that gave the currency value - bitshares.

Since then, we have come to prefer the inverse of this dual metaphor:

Bitcoin is a type of crypto-company that implements a coin
not
BitShares as a type of crypto-coin that implements a company.

Of course, bitshares are something very different than shares in a government-created and therefore government-regulated organization.  We are speaking metaphorically to help people understand how they work and what gives them value.   They can still be viewed as ordinary altcoins (ok, incredibly powerful ordinary altcoins) as far as their underlying technology is concerned. 

Charles Evans explored this dual metaphor in this delightful blog article:


We offered a bounty for an experienced coin designer to build the PTS protocoin for us.  A developer known as FreeTrade answered the call.  It took him about a month to clone it from the Bitcoin library. Then, while we were still evaluating his code, another independent entrepreneur known as Super3 downloaded the open-source from FreeTrade’s library and started it running.  On November 5, 2013 Super3 went down in history as the miner of the first protocoin block in crypto-equity history!

POW!  The rest of the world (who had been eagerly awaiting the launch based on the several months we had been writing about it) jumped on it with everything they had.  It took just a few days before the competition became so intense that people had a hard time mining solo with their individual computers.  They started joining pools that several enterprising businessmen quickly set up and then everyone started renting cloud computers to remain competitive.  By the end of the third week, there were hundreds of thousands of mining nodes competing.  Several independent coin exchanges jumped in and listed PTS, driving it immediately into the top ten of the over 100 coins listed on coinmarketcap.com at the time.

So you see, we really don’t own PTS. 
It was launched by the industry for the industry. 
We just described what ought to exist,
and a decentralized industry of entrepreneurs produced it practically overnight.

Of course, that moon shot may have had something to do with one small suggestion we made literally at the last minute:  we decided to recommend PTS be the basis for more than just BitShares X.  PTS should also be used to initialize all of the other second-generation assets we had been writing about. Mine once for a whole family of assets.  Why should you have to keep mining over and over again to get a “fair” distribution?

In fact, we recommended that other developers do the same thing.  Suddenly BitShares PTS was backed by more than thin air.  More than just one unmanned business.  More than just one company’s product line of unmanned businesses.  It could well become backed by a good portion of the unmanned business industry!

BitShares PTS was valuable because
as a universal prototype
it was upgradable to multiple future releases like BitShares X.

Just like a good deal on Microsoft Office 1.0 might get you free upgrades on Word, Excel, PowerPoint and all the rest …for as long as you both shall live!

To a community willing to speculate on any altcoin with a cute name, that was all it took.  Now there was something tangible to speculate on.  Soon crypto-currency speculators would be demanding to know every new asset’s business case

Imagine that!  We had almost accidentally changed the crypto-currency industry forever.

It was just our opening shot.
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline Overthetop

Re: Happy Birthday BitShares!
« Reply #17 on: June 04, 2014, 11:42:47 pm »
Happy Birthday BitShares!

Thank you Stan , for giving us the whole story.

I believe the story will be more wonderful when we look back on the Next Birthday of BitShares .

 :)
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Offline ripplexiaoshan

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Re: Happy Birthday BitShares!
« Reply #18 on: June 05, 2014, 01:24:34 am »
GOOD ARTICLE AND HAPPY BIRTHDAY!
BTS committee member:jademont

Offline xeroc

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Re: Happy Birthday BitShares!
« Reply #19 on: June 05, 2014, 07:38:19 am »
@Stan
In the first post you wrote "Etherium" but it should be "Ethereum"!

Nice read!

Quote
Imagine that!  We had almost accidentally changed the crypto-currency industry forever.
+5%  ;D
« Last Edit: June 05, 2014, 07:46:51 am by xeroc »
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline Stan

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Re: Happy Birthday BitShares!
« Reply #20 on: June 06, 2014, 03:57:15 am »
This is just a Preliminary Rough Draft.
Don't read it yet unless you want to help us improve it.
When polished, this will be an ongoing multipart blog series on bitshares.org

If you are wondering what you may missed in the first year,
or want to ponder how we got to where we are, read on…


The History of BitShares
Part Three

December’s Innovation – TAPOS and the End of Mining

In the weeks that followed it became increasingly obvious that the whole paradigm of mining on which the crypto-currency industry is founded was horribly flawed.  While generally billed as a "fair" lottery for wide distribution of a new currency, it was clear that the ordinary guy was still at a disadvantage
  • Technically savvy people could use and optimize the tools - others could not install their wallet.
  • Wealthy individuals could rent computers by the thousands - others had no computer at all.
Only a very small percentage of the general population was benefitting - sucking up the lion’s share of the coins and then reselling them on the market at a profit.

Now, there’s nothing wrong with using your brains or wealth to earn a profit while contributing to society (like, say, developing a new technology), but as far as the general public was concerned, this small elite group of individuals were effectively just selling the currency into existence.  Most of the general population had to buy them from the market anyway!

And even those elite few only got to keep a small percentage of what the market was willing to pay for the currency.  They were required to destroy most of what they received from the market doing the electronic equivalent of digging holes and filling them back in.  The whole industry was ein bisschen poco loco.

"No, wait!", the Bitcoin-trained community protested, "burning the seed capital is the price we must pay for securing the network!"

Except the network was not really being secured.  Economies of scale dictate that hashing power will always migrate toward specialized capital-intensive organizations ultimately killing the very decentralization that mining was supposed to ensure.  Today, most Bitcoin mining power is concentrated in the hands of a half-dozen individuals with just two of them controlling over 51%.  And they proudly collaborate “for the good of the network.”

Bytemaster recognized that Bitcoin could be viewed as an unprofitable company and its coins as stock in that company.  Stock value was generally rising because demand for its services (efficient private money transmission) exceeded supply.   But, meanwhile it was bleeding red ink.  100% of its transaction fees were going to pay its employees (the miners).  But that still wasn’t enough.  It had to print more money (up to 12% annual inflation) also to pay its employees.  So Bitcoin is a company with annual losses near 12%.  (And the employees were only getting to keep a few percent of the money being wasted on them.)

He decided that eliminating those employees was a key objective that would inevitably lead to a whole new generation of profitable crypto-businesses.  Assets based on destructive mining would go the way of the dinosaur, unable to compete with profitable business models of second generation assets that could afford to pay dividends and interest to their holders.  It was just a matter of time.

So a month after the ProtoShares revolution, around December 1, Bytemaster fired his second shot heard round the world:  all his future designs would replace Proof of Work mining with a Proof of Stake derivative.
 
Transactions as Proof of Stake (TAPOS) and the End of Mining
https://bitsharestalk.org/index.php?topic=1138.msg11955#msg11955

An algorithm that was lightweight enough to run invisibly on anyone’s computer, for free! Mining was dead.  Next generation crypto-assets would be profitable.  They would be valuable because they returned a yield, rather than for superficial speculative reasons.

There were merely a few technical wrinkles to iron out...
« Last Edit: June 06, 2014, 01:09:53 pm by Stan »
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Offline toast

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Re: Happy Birthday BitShares!
« Reply #21 on: June 06, 2014, 04:19:30 am »
Quote
all his future designs would replace Proof of Work mining with a Proof of Stake variant of Ripple’s algorithm.

TAPOS isn't a variant on Ripple. Unity was the ripple-like algorithm (not mentioned in tapos whitepaper), added as an extra layer over TAPOS to help mitigate forks.

IIRC the evolution was
Pure TAPOS -> TAPOS + Unity -> (TAPOS + Trustee, discussed in private and rejected) -> DPOS
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Offline Stan

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Re: Happy Birthday BitShares!
« Reply #22 on: June 06, 2014, 04:31:18 am »
Ripple?  Who said anything about Ripple?   8)

Thanks!
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Offline jae208

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Re: Happy Birthday BitShares!
« Reply #23 on: June 06, 2014, 06:25:32 am »
Maidsafe, 3d Printing of Gun parts, Solar Roadways, and of course...DPOS.

How funny... today I was looking for the files
To print the liberator gun for my 3d printer but I couldn't find it anywhere anymore not even TPB
:/

Can't believe it's been about a year since BitShares was conceived. Happy b-day.
« Last Edit: June 06, 2014, 06:52:26 am by jae208 »
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Offline fuzzy

Re: Happy Birthday BitShares!
« Reply #24 on: June 06, 2014, 06:57:35 am »
Maidsafe, 3d Printing of Gun parts, Solar Roadways, and of course...DPOS.

You left out perpetual motion, warp drive and the flux capacitor...

Aces in the hole my friend...held back for emergencies.
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merockstar

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Re: Happy Birthday BitShares!
« Reply #25 on: June 11, 2014, 10:53:31 pm »
This is clearing up a lot of loose ends that I didn't yet understand.

Stan, remember when I asked for something more to "wet my whistle?"

this is what I had in mind. thank you for writing it.
« Last Edit: June 12, 2014, 03:56:25 am by merockstar »

Offline Stan

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Re: Happy Birthday BitShares!
« Reply #26 on: June 12, 2014, 01:16:45 am »
This is clearing up a lot of loose ends that I didn't yet understand.

Stan, remember when I asked for something more to "whet my whistle?"

this is what I had in mind. thank you for writing it.

My pleasure.   :)
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Offline donkeypong

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Re: Happy Birthday BitShares!
« Reply #27 on: June 12, 2014, 02:50:55 am »
Grammarian's Corner




merockstar

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Re: Happy Birthday BitShares!
« Reply #28 on: June 12, 2014, 03:57:03 am »
okay okay, i fixed it jeesh :P

even though according to some dictionaries, whet works.

http://wiki.answers.com/Q/Is_it_%27wet%27_your_whistle_or_%27whet%27_your_whistle
« Last Edit: June 12, 2014, 04:05:45 am by merockstar »