Estimated reading time: 2 minutes, 2 seconds
This episode of Blockchain – What is it? covers Bitshares! In this series, we will cover the different types of blockchain platforms and cryptocurrencies on the market right now. We’ll give you a quick description of each /token, its function, who is their competition and where you can learn more.
Bitshares is a decentralized autonomous organization, or a DAO for short, that serves as a decentralized exchange and fintech solution. This means that there is no head leading the project, and it is self funded. They have some different system components and features, and offers a solution to the scalability problems of other blockchain networks.
In order for a decentralized exchange to function properly it must be able to process several transactions every second. BitShares offers this needed scalability, allowing for trading to occur in high volumes with short clearing times.
There are a few components to the BitShares decentralized exchange, which includes Smartcoin, a stable asset and digitized assets issued by the users, meaning anyone can create their own asset. Smartcoin allows users to use blockchain technology without worrying about volatility. A stable coin like Smartcoin will hold the same monetary value over time.
Bitshares has pointed out certain issues with a Proof-of-Work mining system, and has instead chosen to use a delegated mining algorithm. A major problem with maintaining a decentralized exchange is keeping fees down, otherwise users will head to other exchanges. Delegated Proof-of-Stake allows for fees to be limited while maintaining the necessary trading volume.
Their main competition are centralized exchanges, such as . They have pointed out that there is a great risk for information-theft, corruption, and fraud.
There are three parts to the BitShares ecosystem. Witnesses are paid to process transactions and secure the network. Delegates are permitted to propose updates to the network. Workers can propose any project and if they are voted in they can get paid to work on their project, it’s a similar system to Dash.
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