BitShares: A fully decentralized platform & community

The original article can be found here. It birthed the initiative of the marketing worker and was written by Fabian aka @xeroc and me.

Could you briefly describe what the BitShares Blockchain and its core token BTS is?

The BitShares Blockchain is an industrial-grade decentralized platform built for high-performance financial smart contracts. It represents the first decentralized autonomous community that lets its core token holder decide on its future direction and products by means of on-chain voting. For more details you can go here.

Could you describe the vision for the BitShares Community and Blockchain?

Being a self governed, sustainable, and fully decentralized community empowered by a trustless platform. The BitShares Blockchain has a reserve fund that is being used for funding and refilled by collecting transaction fees for anyone that operates on the blockchain. It can be accessed in a trustless way via worker proposals, that are being voted on by all BTS holders. If approved, the proposal automatically pays out a defined amount of BTS daily. One goal is to operate the BitShares Blockchain in a way, which results in the reserve funds not being depleted but rather increased.

Being fully decentralized has the downside of not having a central authority that can represent the community in a legally sound way. This issue is tackled by voting for a Legal representative: The BitShares Blockchain Foundation (non-profit). This mandate has recently been renewed for 2019. For more details go here and here.

What value will the BitShares Blockchain bring to users?

The BitShares Blockchain has been most known for its DEX as built-in native dapp and its Stablecoins, or as they are called in BitShares Smartcoins. The value proposition of a Stablecoin is inherent in its name, it is a "price-stable" token. Some more light on this topic can e.g. be found here:

The DEX leverages the direct ownership of tokens that are native to the BitShares Blockchain (most notably BTS and its Stablecoins) through the private keys of the user. Tokens that are not native to BitShares (for example Bitcoin) are available via gateways that provide IOUs for those tokens on the BitShares Blockchain. Those IOUs are again directly owned by the user, but trust in the gateway as the middleman is required if you want to swap the IOU for the real token (sidenote: an upcoming BSIP will allow gateways to operate their IOUs trustless via atomic swaps, see Hashed Time-Locked Contracts in last question). Compared to centralized exchanges, the advantage would be a public and open order book as well as autonomous and trustless order matching which is performed by the smart contracts inherent to the BitShares Blockchain. Of course, the BitShares Blockchain has means to support KYC and AML regulations.

In general the BitShares Blockchain is an industrial scale blockchain that can sustain over 3,300 transactions per second (theoretical limits > 100,000 tps) and allows various business models on top of. This includes for example tokenization and digitization of real world assets (read more here), storing documents or legal contracts tamper-proof on the blockchain, or holding company shares directly on the blockchain with KYC and a legal framework that guarantees that the token actual represents the respective shares and many other use cases that involve any kind of token management.

Furthermore the BitShares Blockchain does not allow arbitrary smart contracts, all operations are hardcoded and any change to them require a protocol upgrade (other blockchains would call this a hard fork, but there can not be any majority forks in DPOS, the consensus protocol the BitShares Blockchain uses). This has the advantage that any change undergoes heavy review with respect to security and performance, and the disadvantage of losing the flexibility of a dynamic smart contracting platform like EOS, if you may see it as one. Since the BitShares Blockchain is also targeting the financial domain, the added security vastly outweighs the lack of flexibility.

What kind of projects do you see as competitors and how do you differentiate from them?

No other blockchain has the unique feature set of BitShares. For instance, the 0x protocol that implements decentralized exchanging on Ethereum does not allow for more sophisticated limit orders. Additionally to that, Ethereum needs an average of 12 seconds for block confirmations, while BitShares has a constant 3 seconds per block. That means you can swap your assets 4 times in BitShares while waiting for a single swap to execute on Ethereum.

Another example, WAVES, does its order matching on a centralized server and only uses the blockchain for transparent orderbook and logging of matching. In that case, the centralized entity needs to be trusted and no one could prevent front-running. The consensus scheme of BitShares, DPOS, is decentralized. All block producer and nodes on the blockchain perform order-matching independently but still come to the same conclusion.

Can you tell us about important developments yet to come and why they are important?

The BitShares Blockchain has funded worker proposals for development in total over 1 million USD for 2018 alone, and approved already over 1.5 million USD for 2019 (more pending) That budget is paid out using bitUSD or bitCNY, both stable coins that are built-in the BitShares Blockchain and peg the value to their FIAT counterpart. Many professional developer make their living through those worker proposals.

Among currently active worker proposals are:

BitShares Community Wallet

The community wallet is an open-source and fully responsive web frontend whose goal is to provide a user friendly and trader targeted experience for interaction with the DEX of the BitShares Blockchain. Read more here.

Hack the DEX - a BitShares Bug Bounty Program

The bug bounty program gives incentive to security researchers and penetration testers to disclose vulnerabilities, enhances the security of the blockchain. Read more here.

ROSSUL - Bitshares Exchange UX/UI Redesign Project

The BitShares UI has been designed in 2014 and was driven by functionality. This worker will provide a redesign that is focused on user experience. Read more here.

The BitShares UI Maintenance Team

The BitShares UI is constantly being developed, bugs removed and new features and use cases added. Read more here.

BitShares Core Development Team

The BitShares Core (backend) contains all operations that represent the possible interactions with the BitShares Blockchain. The consensus mechanism used is delegated proof of stake. The backend is continuously developed, including bug fixing and consensus unrelated plugin (e.g. Elastic Search database plugin to facilitate access to blockchain operation data while reducing requirements on the server). Once every half year a consensus changing release is done, a so called protocol upgrade (in contrast to a hard fork). Due to the consensus mechanism there can only be one chain after the protocol upgrade. All consensus changes requires the approval of the BTS holders by means of voting. Current consensus changes are listed below. Read more here.

Market Fee Sharing

The BitShares Blockchain employs a fixed network fee for its users for every interaction with the blockchain. Those fees are shared with the referrer that onboarded the interacting account. In order to create more incentive for webmasters to refer to the BitShares Blockchain, market fees that are collected through trading on the DEX of the BitShares Blockchain. This is an important step to enhance adoption. Read more here.

Hashed Time-Locked Contracts (HTLC)

The ability to securely hold tokenized assets within a hashed time-locked contract on the BitShares blockchain is a desirable feature that could be used by many persons, services, and businesses to mitigate risks between participants during asset transfer. HTLC implement conditional transfers, whereby a designated party (the "recipient") will reveal the preimage of a hash in order to execute the asset transfers from a second party (the "depositor"), else after time lock expiry "depositor" may retrieve their assets. No third-party escrow agent is required, rather the HTLC operation enforces conditions, evaluations and transfers through the BitShares consensus protocol.

This is the first step towards cross-chain atomic swaps, which are essential for a decentralized exchange to allow trading of assets in a true trustless setting. Read more here.

Custom Active Authorities

Every account interacts with the BitShares Blockchain by means of signed transactions indicating the desired action of the user. This has the benefit that there is no central authority that needs to be trusted, and brings the downside that the user needs to secure the private key to create the signatures. A compromised private key likely results in permanent loss of the contained funds.

Custom active authorities allow to create additional keys with specific purpose (everything else is prohibited), for example for users of the DEX a so called Trading Key, which only allows trading on predefined markets. The implementation is flexible and allows full customization of the restrictions what the key can do. This also enhances security for businesses that are running automated software for interaction with the blockchain by creating keys that only allow the intended use case. Read more here.

Beet - the blockchain companion

Interacting with the BitShares Blockchain can be cumbersome if you are not familiar with the importance of key security. In general, every action on the BitShares Blockchain requires the private keys of the involved accounts, and when you are using third party tools (especially closed source ones), the question about trust quickly arises. Being closed source can be a business model, but should not hinder adoption. Beet aims to solve that by providing an open source, audited and fully transparent key management and signing tool that can be locally installed (inspired by Scatter for EOS) and supports multiple blockchains (BitShares & forks, EOS & forks, Steem & forks). In combination with the Hashed Time-Locked Contracts (HTLC), Beet will allow to realize easy-to-use atomic cross chain swaps of tokens. Read more here.

BitShares Mobile App

native support for Android and iOS (pending).Mobile phones have become an indispensable part of people's lives, and people are used to handling various things through mobile phones. BitShares is a 24/7 decentralized exchange where people can log in to their accounts at any time to view markets, or trade, or transfer money. Therefore, a mobile wallet with good experience and complete functions is urgently needed in the market. This work [https://github.com/btspp/bitshares-mobile-app]implements an open source mobile wallet]() with

DEXBot

Liquidity - the ability to easily buy and sell an asset at a fair price - is an important marker for any exchange. By the adding of liquidity on various trading pairs, customers can more easily trade, get a better price, and find more stable markets. While primarily a software development project, DEX liquidity greatly benefits from cultivating relationships and encouraging DEXBot use from prominent individuals in the wider market making community.

The DEXBot software builds liquidity on markets, is open for all to use, increases the number of transactions on the blockchain, and helps pay for itself through increased trading fees. Better spreads, increased liquidity, and communication with potential power-users of DEXBot will help the BitShares DEX attract more tokens and users.