How BitShares Works

A Currency, A Bank, An Exchange, A Community

BitAssets are helping businesses and shoppers avoid the hassle of having to constantly transfer their holdings back and forth between crypto and cash to evade costly price fluctuations. For traders, BitAssets are providing the opportunity to trade in the value of their favorite currency or commodity without leaving the privacy and convenience of the blockchain. And for all users, bitAssets pay a daily interest rate that rivals or surpasses most savings banks.

BitAssets pay interest because of the BitShares market-pegged assets are lent into circulation at interest. Traders seeking leverage post bitshares as collateral equal to 3 times the value of the loan and compete to offer the highest interest rates. Borrowing an asset so you can sell it on the market is known as shorting. These trades happen inside the trust-free exchange that is hardwired into the BitShares blockchain. The end result of these shorts is the creation of 300% collateralized bitAsset tokens that each pay a proportional dividend to the combined interest paid by the open short positions. Because of this, BitAsset holders have the unique privilege of earning interest on commodities such as gold, silver, and oil, as well as commonly interest bearing instruments like dollars and euro. A detailed explanation of how this works can be found in the BitShares market-pegged asset whitepaper.

The BitShares Decentralized Exchange also contains a class of tokens called User Issued Assets or UIA for short. Each UIA can be fully customized to fit the requirements of its issuer. For example, companies can issue shares of stock directly onto the bitshares blockchain, and BitShares UIA can be programmed to fully comply with existing regulatory and legal guidelines. UIA can also be issued by established crypto-currency exchanges and money transmitters who want to become gateways into and out of BitShares. Other uses for UIA may include rewards vouchers, coupons, third party currencies, credits, product receipts, crowdfunding tokens, warranty vouchers, private securities, and many more.

BitShares Decentralized Exchange is putting freedom and security back into the hands of the people by eliminating dangerous and unfair practices like fractional reserve lending and order front running. The flexibility of BitShares UIA is bringing a diverse group of interests to the table, and interest earning bitAssets are providing opportunity for those living in volatile regions to be safe and secure in their savings. No matter your age, race, creed or occupation, the BitShares’ community is passionately committed to bringing you decentralized, free-market solutions for securing your life, liberty, and property.

The endgame for the BTS token (lowercase-b “bitshares”) is to trade as equity in this profitable, decentralized network that can out-compete existing centralized solutions for basic financial services with nothing but free software and free speech.

BitAssets, the currency of BitShares, are digital asset tokens that have eliminated the burden of price volatility.

This means that bitUSD, bitEuro, bitCNY and bitGold track their respective assets like dollar, euro, yuan and gold on crypto-currency exchanges worldwide, and can all be freely traded against each other for a small fixed fee.

BitAssets are helping businesses and shoppers avoid the hassle of having to constantly transfer their holdings back and forth between crypto and cash to evade costly price fluctuations. For traders, BitAssets are providing the opportunity to trade in the value of their favorite currency or commodity without leaving the privacy and convenience of the blockchain. And for all users, bitAssets pay a daily interest rate that rivals or even surpasses many savings banks.

BitAssets are not issued by any central authority. Instead, they are created as a side-effect of trades which happen inside the trust-free exchange that is hardwired into the BitShares blockchain. The end result of these swaps is the creation of 300% collateralized bitAsset tokens that each pay a proportional dividend of the combined interest paid by the open short positions. Because of this, BitAsset holders have the unique privilege of earning interest on commodities such as gold, silver, and oil, as well as commonly interest bearing instruments like dollars and euro. A detailed explanation of how this works can be found in the BitShares market-pegged asset whitepaper.

The BitShares Decentralized Exchange also trades a class of tokens called User-Issued Assets or UIAs, and each UIA is can be fully customized fit the requirements of its issuer.

Gateway assets be issued by established crypto-currency exchanges and money transmitters who want to become gateways into and out of BitShares. Read more on the Intro for Gateways.

Companies can issue company stock directly onto the bitshares blockchain, and BitShares UIA can be programmed to fully comply with existing regulatory and legal guidelines. Read the blog post on crypto-stocks.

Other uses for UIA may include rewards vouchers, coupons, third party currencies, credits, product receipts, crowdfunding tokens, warranty vouchers, and many more.

All assets on bitshares come with a variety of tools to help facilitate free commerce like escrow transactions, multisig, stealth addresses, and more. Delegates are effectively first-class oracles, meaning technologies like Codius or Hyperledger could be added relatively painlessly as demand for even more flexibility arises.

A more elegant consensus algorithm for a more civilized age.

BitShares is secured by the Delegated Proof of Stake consensus protocol, with the BTS token (lowercase-b “bitshares”) as the consensus metric. The design of this protocol seeks to maximize speed and efficiency while keeping bitshares holders in control of the block producers. DPOS as implemented in BitShares allows for 10 second blocks with an extremely low orphan block rate and can potentially scale to thousands of transactions per second.

Delegates can also campaign to have a higher pay rate than what is necessary to run a block-producing node. Shareholders typically use this functionality to fund the development of the BitShares ecosystem. Learn more about delegates.

How BitShares Works