Crypto Tag: BitShares

SmartCoins are a unique feature of the BitShares blockchain, designed to provide stability and utility within the decentralized financial ecosystem. Here’s how they work:

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The BitShares platform offers a unique decentralized exchange (DEX) that allows users to trade various assets, including BitUSD and BTS. Understanding the difference between shorting BitUSD and buying BTS is crucial for navigating this platform effectively. Here’s a breakdown of each concept:

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Smartcoins can be purchased on the market and held as an asset. Additionally, users who hold BTS (BitShares) can deposit their BTS as collateral on the blockchain and have Smartcoins issued to them by the blockchain. In this case, selling the Smartcoins issued by the blockchain in the BTS market allows users to effectively short the Smartcoins.

After shorting Smartcoins in the BTS market, if the price of BTS rises, users can buy back Smartcoins at a lower price using BTS. After repaying the Smartcoins to the blockchain, they will still have some Smartcoins left over. Alternatively, if they sell these excess Smartcoins, they can increase their holdings of BTS.

Conversely, if the price of BTS falls after shorting Smartcoins, users will have to buy back Smartcoins at a higher price, resulting in a loss. This explanation outlines how users can interact with Smartcoins and BTS in a blockchain context, including strategies for shorting and the potential outcomes based on market movements.

Holding smartcoins physically is equivalent to electronically holding the underlying asset of the smartcoin. For example, owning 10,000 bitJPY is equivalent to holding 10,000 yen in value.

If you possess 10,000 bitJPY, you have the right to exchange it for 10,000 yen worth of BTS (BitShares) at any time. This process of exchanging bitJPY for an equivalent value in BTS is called “settlement.” When you settle, you pay 10,000 bitJPY to the blockchain, and after 24 hours, the blockchain sends 10,000 yen worth of BTS to your BitShares account at the market value on the following day.

It was shocking when Dan Larimer created BitShares, a ‘complete DAO,’ but it seems that when the developer disappears, the community loses momentum. As a result, the community is now full of bots. At the time, it was amazing to have a DAO that operated without human intervention. Dan could have continued developing it to enable NFT creation, but that would have turned it into more of a project than a DAO, so he probably didn’t want to do that. Well, it can’t be helped.

Compared to BitShares, Steemit, which Dan also created around the same time, seems to have more activity. Maybe it’s because it’s a blogging platform. However, after various events, Steemit underwent a hard fork, leading to the creation of Hive.blog, but it doesn’t seem to be doing very well either.

By introducing users to BitShares through you, you become the referrer for those users, and a portion of the transaction fees they pay in the future will be returned to you.

BTS is a cryptocurrency that provides value within the BitShares blockchain. By depositing BTS into the blockchain, users can generate smartcoins. Smartcoins are a type of cryptocurrency that are pegged to real-world assets or currencies, such as the US dollar or gold, offering stability and reliability. This process allows users to leverage their BTS holdings to create stable digital assets on the BitShares platform.

Smartcoins are cryptocurrencies whose prices are pegged to currencies like the dollar, yen, or bitcoin. For example, bitUSD is pegged to USD, bitJPY is pegged to JPY, and bitBTC is pegged to BTC.

Both fully decentralized DAOs and centralized organizations have critical flaws. Using BitShares as an example, let’s explore why extreme decentralization failed, why centralization is also problematic, and why a strong community is essential.

The Problems with Pure DAOs

• Slow and Inflexible Decision-Making
  DAOs rely on token-holder voting for governance. This can make it difficult to respond quickly to emergencies or fast-changing situations, such as technical issues or security breaches.
• Lack of Developers and Leadership
  When a DAO pushes for total decentralization, it can lose its core developers and leaders. This happened with BitShares: as the project became more decentralized, it lost the people who could drive innovation and solve problems, leading to stagnation.
• Legal and Social Uncertainty
  DAOs operate in a gray area legally, with unclear accountability and regulatory risks.

The Problems with Centralization

• Lack of Transparency and Power Concentration
  Centralized organizations concentrate decision-making in the hands of a few, making it harder to ensure transparency and increasing the risk of abuse or corruption.
• Lack of Flexibility and Diversity
  Top-down decision-making often ignores diverse perspectives from the community and can be slow to adapt to change.

What Went Wrong with BitShares

BitShares was a pioneering decentralized exchange with a unique Delegated Proof of Stake (DPoS) system. However, its push for total decentralization led to several issues:

• Weak Development and Operations
  As BitShares aimed to become a “pure DAO,” it lost its core developers and leadership, making ongoing development and updates difficult. The project lost momentum and competitiveness.
• Community Weakness
  Without active core members, technical and operational challenges went unaddressed, and the project stagnated.
• Historical Context
  While decentralization was a reaction to repeated hacks and scandals at centralized exchanges, BitShares showed that extreme decentralization can undermine a project’s sustainability.

The Importance of Community

• DAO Success Depends on Community Engagement
  For a DAO to thrive, it needs more than just decentralized mechanics; it needs an active, engaged community. Open communication, collaborative decision-making, and shared leadership are essential for flexibility and resilience.
• Balanced Governance is Key
  The ideal structure is neither fully decentralized nor fully centralized. Instead, a balance between community autonomy and some degree of leadership or specialization is crucial for long-term success.

Conclusion

• Pure DAOs risk stagnation due to slow decisions and lack of leadership.
• Centralized organizations risk corruption, lack of transparency, and inflexibility.
• BitShares showed that extreme decentralization can weaken a project’s development and operations.
• Sustainable organizations need strong communities and a balanced approach to governance.

Neither pure DAOs nor centralization is the answer. The future belongs to organizations that put community at their core and find the right balance between decentralization and leadership.

You need to become a lifetime member of BitShares.

After that, simply post your unique affiliate link on your blog or social media accounts. When someone registers with BitShares through your affiliate link, you will receive a portion of the transaction fees they pay in the future. Affiliate rewards are paid in BTS.Basically, you can claim the full amount after a 90-day “vesting period” has passed. To claim, go to “Vesting Balances” from the menu in the top right corner of BitShares, and click the “Claim Now” button to immediately withdraw the amount listed as “claimable.