What are Bitshares?
Bitshares is a decentralised, peer-to-peer, crypto equity network and ledger that uses a Delegated Proof of Stake algorithm (DPoS). It was made in 2014 by Dan Larimer, co-founder of Cryptonmex, EOS, and Steemit.
Bitshare’s platform uses Graphene, a C++ blockchain language that is open source. It plays the role of a consensus mechanism. Graphene is used by other projects such as PeerPlays.com (Token Name = PPY and gaming site) and Steemit (a decentralised Reddit blogging platform).
Also, Bitshares acts like an equity instead of a crypto token. Users use Bitshares as a way to conduct financial services such as decentralised exchanges, smart contracts, currency rails, derivative creations, and banking.
Technical aspects:
- Maximum Coin Supply: 3,600,570,502
- Maximum Transactions per Second: 100,000
- Block Reward: 1 BTS
- Coins in Reserve: 1,000,668,097 BTS
- Coins not in Reserve: 2,599,900,000 BTS
How to Exchange BTS to USD?
Bitshares does this through collateralising stable and market-pegged BitAssets (smart coins). This means that Bitshares has crypto assets that track fiat money and real-world assets such as BitUSD. The USD is tracked due to a combination of data sources that are created by the Bitshares community.
BitUSD is a smart token that has about 200 per cent of its value backed by Bitshare’s main currency. It can be converted whenever the user desires. Users can go from BTS to USD at any time as a form of collateral by creating a smart contract loan that’s managed by blockchain technology.
The goal of stable price BitAssets (Smart Coins)
- To create a stable price that has reduced volatility.
- A reliable way to predict token value.
- A unit that’s different than assets that have capital losses and gains.
- Hedging against volatile price action and cryptomarkets.
Problems and risks
While all of these features sound great, what are the potential risks?
The risk of a sudden drop in value
Cryptocurrency is an interesting mix of a stock option and a technical asset. But, due to constant market fluctuations, the value of any cryptocurrency can drop in an instant.
Since it’s still a cryptocurrency in essence, Bitshares it not immune to drops in value, and a large market crash could potentially increase the chances of this happening. Knowing this allows you to be realistic about Bitshares and make intelligent decisions once the market drops or raises in value.
Exchange de-listing
An Exchange delisting occurs when a popular crypto exchange decides to remove a crypto pair from its list. As a result, this can lead to Fear, Uncertainty, and Doubt (FUD). When a FUD occurs, crypto investors have a negative outlook on the pair and starts to reflect in its value.
For example, Bittrex, one of the largest crypto exchanges, Bittrex planned to delist Bitshares from its exchange. This is because Bitshares acts like a decentralized exchange and is in direct competition with Bittrex. Despite being delisted, Bitshares still receives support and buying activity.
Concluding Thoughts?
Bitshares offers a lot of opportunity to the crypto world once used correctly. In conclusion, Bitshares is to be viewed as a decentralised exchange where users can analyse smart coins and use this knowledge to make better decisions.
Disclaimer: We are not responsible for your investments. Our content is produced only to educate and inform our readers. If you do plan on buying any cryptocurrency, do so at your own risk.
