What is BitShares?¶
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BitShares is a technology supported by next generation entrepreneurs, investors, and developers with a common interest in finding free market solutions by leveraging the power of globally decentralized consensus and decision making. Consensus technology has the power to do for economics what the internet did for information. It can harness the combined power of all humanity to coordinate the discovery and aggregation of real-time knowledge, previously unobtainable. This knowledge can be used to more effectively coordinate the allocation of resources toward their most productive and valuable use.
Bitcoin is the first fully autonomous system to utilize distributed consensus technology to create a more efficient and reliable global payment network. The core innovation of Bitcoin is the Blockchain, a cryptographically secured public ledger of all accounts on the Bitcoin network that facilitates the transfer of value from one individual directly to another. For the first time in history, financial transactions over the internet no longer require a middle man to act as a trustworthy, confidential fiduciary.
BitShares looks to extend the innovation of the blockchain to all industries that rely upon the internet to provide their services. Whether its banking, stock exchanges, lotteries, voting, music, auctions or many others, a digital public ledger allows for the creation of distributed autonomous companies (or DACs) that provide better quality services at a fraction of the cost incurred by their more traditional, centralized counterparts. The advent of DACs ushers in a new paradigm in organizational structure in which companies can run without any human management and under the control of an incorruptible set of business rules. These rules are encoded in publicly auditable open source software distributed across the computers of the companies’ shareholders, who effortlessly secure the company from arbitrary control.
BitShares does for business what bitcoin did for money by utilizing distributed consensus technology to create companies that are inherently global, transparent, trustworthy, efficient and most importantly profitable.
BitShares has went through many changes and has done its best to stay on top of blockchain technology. Towards the end of 2014 some of the DACs were merged and the X was dropped from “BitShares X” to become simply BitShares (BTS).
BitShares X was first introduced in a White Paper titled “A Peer-to-Peer Polymorphic Digital Asset Exchange” by Daniel Larimer, Charles Hoskinson, and Stan Larimer. Shortly after authoring the White Paper, the project was founded by Daniel Larimer of Invictus Innovations after receiving funding from Chinese venture capital firm BitFund.PE. Charles Hoskinson, founder of the Bitcoin Education Project, was a co-founder of the original project but has since left the team. The BitShares X project received a lot of attention in August 2013 when it was covered by CoinDesk and subsequently announced to the the BitcoinTalk forums on August 22nd 2013 as a project announcement. The project generated a good amount of buzz around the proposal, though the original scope and timelines have since modified.
Consensus is the mechanism by which organizations of people decide upon unitary rational action. While not considered technology in the traditional since, consensus “technology” is the basis of democratic governance and the coordination of free market activity first coined by Adam Smith as the “Invisible Hand.” The process of consensus decision-making allows for all participants to consent upon a resolution of action even if not the favored course of action for each individual participant. Bitcoin was the first system to integrate a fully decentralized consensus method with the modern technology of the internet and peer-to-peer networks in order to more efficiently facilitate the transfer of value through electronic communication. The proof-of-work structure that secures and maintains the Bitcoin network is one manner of organizing individuals who do not necessarily trust one another to act in the best interest of all participants of the network. The BitShares ecosystem employs Delegated Proof of Stake in order to find efficient solutions to distributed consensus decision making.
Distributed Autonomous Companies¶
Distributed Autonomous Companies (DAC) run without any human involvement under the control of an incorruptible set of business rules. (That’s why they must be distributed and autonomous.) These rules are implemented as publicly auditable open source software distributed across the computers of their stakeholders. You become a stakeholder by buying “stock” in the company or being paid in that stock to provide services for the company. This stock may entitle you to a share of its “profits”, participation in its growth, and/or a say in how it is run.
The BitShares community is a global network of people who all share the same goal of creating and participating in various Distributed Autonomous Companies. The community mainly revolves around the BitShares Team and third parties who use Graphene (the toolkit that makes BitShares possible) to create their own Distributed Autonomous Companies. The main discussions in the BitShares community takes place openly at BitSharestalk.org.