This Little Known Crypto-asset Might Disrupt The Current Financial Order

What few know about bitcoin is that it does more than merely facilitate transactions. Its very existence makes possible an entire financial fabric outside the dominant paradigm. If you’ve followed bitcoin, you might have heard already about “Bitcoin 2.0.” This movement is a branch of the bitcoin tree, and it is a space where excitement has really ratcheted up recently.

What few know about bitcoin is that it does more than merely facilitate transactions. Its very existence makes possible an entire financial fabric outside the dominant paradigm. If you’ve followed bitcoin, you might have heard already about “Bitcoin 2.0.” This movement is a branch of the bitcoin tree, and it is a space where excitement has really ratcheted up recently.

First it was Ethereum which made a splash with news of their plan to transform the crypto-landscape by offering a platform for distributed contracts and DACs. Money was raised and source code has been critiqued and mulled. I was suspicious of Ethereum from the start due to their seeming theatrics and lack of any working product available to the public. If you’ve followed my writings in TDV issues, or elsewhere, then you might have noticed I have not even mentioned Ethereum in writings. Admittedly, part of this is because the ostracization I perceived I would experience. I regret not being more forthcoming but BitShares has given me the confidence, going forward, to be more open about empty press coverage of shell upstarts.

Most recently, moving out in front of Ethereum in terms of first mover advantage, is BitShares, which has somewhat of a shared history with Ethereum. BitShares does not envision bitcoin as crypto-currency, but instead of as a crypto-asset. It is from this purview that the BitShares and BitSharesX environment comes. Bitcoins, in this view, are abstract shares in bitcoin.

BitSharesX introduces the concept of “BitAssets.” BitSharesX is significant because nobody has tried to implement such a system before. This system is a high speed, easily accessible Forex/Stock/Commodities/etc market. BTSX could become one of the most exciting developments in cryptographic history.

BitShares is one of the numerous technologies claiming to be “bitcoin 2.0” or “finance 2.0.” In essence, this “Bitcoin 2.0” movement represents a movement to leverage the power of globally decentralized consensus and decision making networks as birthed by bitcoin. The notion behind “bitcoin 2.0” technologies is that the idea of bitcoin can be expanded upon and applied to various sectors of the global economy and, particularly, finance. In short, “consensus technology has the power to do for economics what the internet did for information.” Theoretically, one such network could arbitrage the combined power of all human computing power on Earth in order to harmonize real-time knowledge discovery and aggregation all done in a trustless, decentralized manner.

Bitcoin is the first autonomous system to use this technology towards a distributed consensus technology that functions as a reliable global payment network. The blockchain is at the core of bitcoin. This cryptographically secured public ledger of the bitcoin network and the associated accounts facilitates the transfer of value between accounts. For the first time in the history of the internet, financial transactions do not need a middle man.

This is what people love about bitcoin. But this technology, as many of bitcoin’s futurists point out, can be expanded. This is what BitShares looks to do with the blockchain. No industry relying on the internet will go untouched by technologies like bitcoin and BitShares. Banking, stock exchanges, lotteries, voting, music, auctions and many other industries will be forever changed by a digital public ledger that makes the creation of so-called “distributed autonomous corporations” (DACs) possible. This system, according to advocates of “bitcoin 2.0”, will provide better services at a fraction of the cost incurred by traditional and centralized corporations.


According to BitShares, the company has developed technology that “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 developers do not believe a “bitshare” (or a bitcoin) is a crypto-currency. Instead, they believe a more appropriate term for bitcoin and BitShares is “crypto-equity” as such digital assets behave more like stocks than currencies. One of BitShares most publicized products is BitSharesX, a family of DACs designed to implement the business model of a bank and exchange. These distributed autonomous credit unions feature funds that can be transferred in seconds anywhere in the world with more privacy and security than a Swiss bank account.

While acting as a bank, BitSharesX also function as an exchange where currencies, commodities, and stock derivatives can be traded with most of the features used by professional traders including shorts and options. Unlike modern banks, you will be able to hold your balance as denominated in gold, silver, oil, or other commodities in addition to the national currencies. BitSharesX charges per transactions and these “transaction fees” are paid to delegates and then to shareholders via a built in “Burn Rate.” The main innovation of bitcoin – an “irrevocable decentralized automated consensus forming” – makes this possible. The BitSharesX White Paper was written by Daniel Larimer, Charles Hoskinson and Stan Larimer.

The paper was called “A Peer-to-Peer Polymorphic Digitral Asset Exchange.” The project has changed quite a bit since that original paper and received much attention in August 2013 when CoinDesk ran a piece on it and the project was announced on the BitcoinTalk forums. BitShares X is an experiment in prediction markets. The decentralized bank and exchange is powered by the decentralized transaction ledger, which is secured not by SHA-256 but by DPOS in order to create digital assets much like bitcoin. BitSharesX has shares that can be transferred between user accounts just like bitcoin. BitShares X does something bitcoin currently does not – implements a business model similar to existing banks or brokerages. BitSharesX creates BitUSD by lending it into existence backed by collateral, similar to modern banking.


  • BitSharesX utilizes Transfer Invisibly To Any Name (TITAN) and Delegated Proof of Stake (DPOS).
  • Represents a new blockchain based consensus algorithm that has sound block creation economics, fast confirm times, zero money supply inflation, all while Delegated
  • Proof of Stake (DPOS)maintaining centralization in a consensus based way to give back value to stake holders.
  • Transfer Invisibly To Any Name (TITAN) – The new blockchain based gold standard in security and privacy. For further explanation please refer below.
  • Market pegged assets – Now collateralized assets will be created by a mechanism similar to a prediction market. This will allow participants to keep their deposit denominated in foreign currencies and commodities.
  • A secure login mechanism for internet services. Now use your registered BTSX name anywhere that supports the stand
    Order Matching Algorithm

BitSharesX utilizes a non-traditional order matching algorithm. The algorithm will always present the buyer exactly what they ask for instead of traditional order matching which gives the buyer at least what they ask for and sometimes more than they asked for.

Delegated Proof of Stake (DPOS)

DPOS is a method of securing a crypto-currency network. DPOS uses a layer of technological democracy to offset the negative effects of centralization. What’s useful about the Delegated proof of stake process nullifies possible negative impacts of centralization through the use of delegates. 101 delegates sign off on the block and are voted on by everyone using the network via each transaction made.

DPOS utilizes a decentralized voting process designed to be more democratic than comparable systems. Instead of eliminating a need for trust, like bitcoin attempts, DPOS puts safeguards in place in order to ensure that those trusted with signing blocks on behalf of the network are doing so correctly and without bias. DPOS also gets rid of the need to wait until a certain number of untrusted nodes have verified a transaction before it can be confirmed. This means increased transaction times. DPOS allows BitShares to transact as fast as Visa and Mastercard, with added security of cryptology.

BitShares does not depend on decentralization but instead on “controlled centralization.” This differs than other methods of securing crypto-assets.

In a delegated proof of stake system centralization still occurs, but it is controlled. Unlike other methods of securing crypto-currency networks, every client in a DPOS system has the ability to decide who is trusted rather than trust concentrating in the hands of those with the most resources. DPOS allows the network to reap some of the major advantages of centralization, while still maintaining some calculated measure of decentralization. This system is enforced by a fair election process where anyone could potentially become a delegated representative of the majority of users.

Precedent is looking to get into the bitcoin 2.0 space, as that corporation plans to create the sort of corporate stock platform based on bitcoin described above in the BitShares platform. The plan of such bitcoin 2.0 platforms is to dethrone the stock market. Overstock recently unveiled that the firm is looking to issue “cryptosecurity” to potential investors. It is like the NASDAQ or New York Stock Exchange but decentralized, just like BitShares.

In the last week, BitShares has doubled. The technology can be downloaded at and shares can be purchased at for bitcoin.