BitShares - A Peer­ To­ Peer Polymorphic Digital Asset Exchange (P2P­PDAE)

[Liquid]

White Paper

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[RenegadeMind]

From reading the abstract, this sounds very similar to ColorCoin.

Could you post a tl;dr summary?

[jordan.dev]

White Paper

Same comment as Reddit -

I know Charles (the creator) personally. Well I don't have a long history with him, I don't believe it's a ponzi scheme) I do know that he's working very hard at what he's doing.

I have encouraged him to focus on more approachable descriptions of the problems he's trying to solve, which he said he's trying to do.

[caveden]

From reading the abstract, this sounds very similar to ColorCoin.

I'm reading it right now, but haven't gone too far. It's not like colored coins. It seems to have a coin of its own, and the network allows miners to enforce on their own some rules that mean some people will loose or earn money. For example, you short some asset, and then the price goes up to such a point that your reserves must be depleted, a miner can do that without needing you to sign any transaction. You can't do that with Bitcoin, thus you can't do that with colored coin.

It's very interesting, I'll keep reading.

By the way, just a little pedantic correction: an "axiom" is a self-evident truth, something like "the shortest path between two points is a straight line". What you outline as "axioms" for your ideal free market financial system are more like "principles", "objectives" etc, not really axioms. They're not self-evident truths, they're more like something you believe should be respected/followed. And btw, good set of principles. ;-)

EDIT: Oh, and btw, keeping the pedantic observations, you might want to rephrase the "zero-sum" principle. A free-market is not a zero-sum game. When two people trade, they create value for each other. The aggregated value in the system does increase. I do understand what you mean by zero-sum in this context: you mean something like the Lavoisier principle, that is, nothing is created nor destroyed, only transformed ("transferred" in your case )
I would avoid the "zero-sum" expression precisely because the term is used by free-market detractors, in an misguided attempt of portraying free-markets as useless to society as a whole ("for somebody to gain, somebody else has to lose!"). They're dead wrong on that, but by saying your system aims at a "zero-sum" might give them ammunition.

[p2pbucks]

BTS is only a ponzi game covered up by P2P assets & P2P EXCHANGE. But BTS assets are not created on BTC protocol.
They just wanna program a new ALT coin . 
I only trust BTC protocol based virtual assets project like coloredcoin Or mastercoin

[caveden]

BitShare will arbitrarily limit the size of the UTxO set?
That sounds a crippling limitation to me. How can you know the good size? Just look all the discussions the maximum block size limit caused. Arbitrarily limiting the UTxO size is no different. IMHO you should reconsider that.

[cunicula]

White Paper

Same comment as Reddit -

I know Charles (the creator) personally. Well I don't have a long history with him, I don't believe it's a ponzi scheme) I do know that he's working very hard at what he's doing.

I have encouraged him to focus on more approachable descriptions of the problems he's trying to solve, which he said he's trying to do.

Charles already cut his losses and bailed on this outed scam. It is definitely a ponzi scheme.

Do you know anythjng about foreign exchange markets? Didn't think so. If you did then you would agree with me.

[caveden]

While an escrow agent has unresolved disputes no new transactions may be entered into the network that reference that agent. This creates financial incentive for the agent to resolve all disputes in an honest and timely manner.

Alice is an escrow agent with good reputation but with an unresolved dispute that's taking some time. What's stopping her from creating escrow agent "Bob", sign and publish message saying "Alice == Bob", and then accept new transactions as Bob?

This restriction you want to apply there seems useless, and I don't think the platform should make such decisions in the name of its users. As long as unresolved disputes are public data, it's up to people to decide whether they want to use an escrow which is taking time to resolve its disputes.

[caveden]

You want to mimic these anti-ASIC alt currencies? Why? What's the point? This assumption that ASICs lead to centralization is false. How many thousands people are hashing right now, with ASICs?

OTOH, preventing the use of specialized hardware will give more power and profit to botnets. Even if there's never a botnet large enough to overpower the network, the simple fact that these parasites can make more profit is disgusting in itself.
Not to mention that your algo seems much more complicated (and thus, bug prone) than simply hashing with a well-known hash algo.

Anyways... your call. That's not a major problem either, I guess. I'll just keep reading.

[caveden]

I'm not sure I follow how you intend to track the price of arbitrary assets.

I see only two ways (which are similar when you think about it) of doing such a thing:

• Contractual backing: I, the issuer of currency C, am contractually bound to give you a certain amount of asset A in exchange for a certain amount of C. C is just a substitute for A.
• "Currency board" way: I, issuer of currency C, keep large reserves of asset A, whose price I want C to track. I sell A to buy C whenever C's price goes below the price of A ('deleting' the C bought), and I issue more C and buy more A with it when the price of C goes above the price of A

The currency board isn't contractually obliged to redeem your currency, but in the end it's as if it was doing it indirectly. And for it to be speculation-proof, it has to hold 100% reserves.

Colored-coins and OpenTransactions go the first way.
Mastercoin goes the second way, with an interesting particularity: The reserve is in Mastercoin, not in the asset whose price is being tracked. That introduces extra risks, because if the price of mastercoin goes down, so does the value of the reserve. If the reserve goes below 100%, it's subject to speculative attacks. So, in order for it to be safe, the reserve must be kept much above 100%. The great advantage is that you can track arbitrary prices in a fully decentralized, pseudonymous and transparent way. The protocol can ensure the reserve won't be stolen, how much is held in reserve is a public data, the reserves can't be seized by desperate governments etc. The disadvantage is that the one holding the reserves would be paying a high opportunity cost. Why would you put so much money aside? There needs to be some gain opportunity for private individuals to voluntary issue currencies in this scheme.

Anyways.... how exactly does BitShare sub-currencies intend to track arbitrary asset prices? I was thinking it was going to follow the Mastercoin strategy, since among your principles you list 'no-trust' and 'decentralization'. But I read the part in which supposedly you explain how BitUSD tracks the price of USD and I confess I don't get it. You talk about short and long positions, but what's tracking the price? Can somebody explain me like I'm five?

[cunicula]

I'm not sure I follow how you intend to track the price of arbitrary assets.

I see only two ways (which are similar when you think about it) of doing such a thing:

• Contractual backing: I, the issuer of currency C, am contractually bound to give you a certain amount of asset A in exchange for a certain amount of C. C is just a substitute for A.
• "Currency board" way: I, issuer of currency C, keep large reserves of asset A, whose price I want C to track. I sell A to buy C whenever C's price goes below the price of A ('deleting' the C bought), and I issue more C and buy more A with it when the price of C goes above the price of A

The currency board isn't contractually obliged to redeem your currency, but in the end it's as if it was doing it indirectly. And for it to be speculation-proof, it has to hold 100% reserves.

Colored-coins and OpenTransactions go the first way.
Mastercoin goes the second way, with an interesting particularity: The reserve is in Mastercoin, not in the asset whose price is being tracked. That introduces extra risks, because if the price of mastercoin goes down, so does the value of the reserve. If the reserve goes below 100%, it's subject to speculative attacks. So, in order for it to be safe, the reserve must be kept much above 100%. The great advantage is that you can track arbitrary prices in a fully decentralized, pseudonymous and transparent way. The protocol can ensure the reserve won't be stolen, how much is held in reserve is a public data, the reserves can't be seized by desperate governments etc. The disadvantage is that the one holding the reserves would be paying a high opportunity cost. Why would you put so much money aside? There needs to be some gain opportunity for private individuals to voluntary issue currencies in this scheme.

Anyways.... how exactly does BitShare sub-currencies intend to track arbitrary asset prices? I was thinking it was going to follow the Mastercoin strategy, since among your principles you list 'no-trust' and 'decentralization'. But I read the part in which supposedly you explain how BitUSD tracks the price of USD and I confess I don't get it. You talk about short and long positions, but what's tracking the price? Can somebody explain me like I'm five?

It is a ponzi. Stop trying to find a legitimate explanation where there is none. If you are interested in a legit way of doing this, look here:
https://bitcointalk.org/index.php?topic=297147.0

The scheme used in mastercoin won't work without modification, but it is not designed as a ponzi.
Bitshares is intentionally designed to fail. You have wasted enough time reading about this piece of shit scam already.

[bytemaster]

White Paper

Same comment as Reddit -

I know Charles (the creator) personally. Well I don't have a long history with him, I don't believe it's a ponzi scheme) I do know that he's working very hard at what he's doing.

I have encouraged him to focus on more approachable descriptions of the problems he's trying to solve, which he said he's trying to do.

Charles is not the creator, I am.  He helped bring in funding and bootstrap the business.    We are working with various parties to explain the concepts better.

[bytemaster]

I'm not sure I follow how you intend to track the price of arbitrary assets.

I see only two ways (which are similar when you think about it) of doing such a thing:

• Contractual backing: I, the issuer of currency C, am contractually bound to give you a certain amount of asset A in exchange for a certain amount of C. C is just a substitute for A.
• "Currency board" way: I, issuer of currency C, keep large reserves of asset A, whose price I want C to track. I sell A to buy C whenever C's price goes below the price of A ('deleting' the C bought), and I issue more C and buy more A with it when the price of C goes above the price of A

The currency board isn't contractually obliged to redeem your currency, but in the end it's as if it was doing it indirectly. And for it to be speculation-proof, it has to hold 100% reserves.

Colored-coins and OpenTransactions go the first way.
Mastercoin goes the second way, with an interesting particularity: The reserve is in Mastercoin, not in the asset whose price is being tracked. That introduces extra risks, because if the price of mastercoin goes down, so does the value of the reserve. If the reserve goes below 100%, it's subject to speculative attacks. So, in order for it to be safe, the reserve must be kept much above 100%. The great advantage is that you can track arbitrary prices in a fully decentralized, pseudonymous and transparent way. The protocol can ensure the reserve won't be stolen, how much is held in reserve is a public data, the reserves can't be seized by desperate governments etc. The disadvantage is that the one holding the reserves would be paying a high opportunity cost. Why would you put so much money aside? There needs to be some gain opportunity for private individuals to voluntary issue currencies in this scheme.

Anyways.... how exactly does BitShare sub-currencies intend to track arbitrary asset prices? I was thinking it was going to follow the Mastercoin strategy, since among your principles you list 'no-trust' and 'decentralization'. But I read the part in which supposedly you explain how BitUSD tracks the price of USD and I confess I don't get it. You talk about short and long positions, but what's tracking the price? Can somebody explain me like I'm five?

It is a ponzi. Stop trying to find a legitimate explanation where there is none. If you are interested in a legit way of doing this, look here:
https://bitcointalk.org/index.php?topic=297147.0

The scheme used in mastercoin won't work without modification, but it is not designed as a ponzi.
Bitshares is intentionally designed to fail. You have wasted enough time reading about this piece of shit scam already.

I have throughly debunked the ponzi allocations, but Cunicula has his own solutions that violate economic laws to sell.   I would be more than happy to talk with anyone on Skype about how BitShares works, where money moves, and how it is entirely balanced.   We are working with people from wall street, and credible economists such as http://www.pecuniology.com/who.php Dr. Charles W. Evans who are far more qualified than Cunicula to analyze the system.  By Cunicula's own standards, Bitcoin is a Ponzi scheme.

[bytemaster]

I'm not sure I follow how you intend to track the price of arbitrary assets.

I see only two ways (which are similar when you think about it) of doing such a thing:

• Contractual backing: I, the issuer of currency C, am contractually bound to give you a certain amount of asset A in exchange for a certain amount of C. C is just a substitute for A.
• "Currency board" way: I, issuer of currency C, keep large reserves of asset A, whose price I want C to track. I sell A to buy C whenever C's price goes below the price of A ('deleting' the C bought), and I issue more C and buy more A with it when the price of C goes above the price of A

The currency board isn't contractually obliged to redeem your currency, but in the end it's as if it was doing it indirectly. And for it to be speculation-proof, it has to hold 100% reserves.

Colored-coins and OpenTransactions go the first way.
Mastercoin goes the second way, with an interesting particularity: The reserve is in Mastercoin, not in the asset whose price is being tracked. That introduces extra risks, because if the price of mastercoin goes down, so does the value of the reserve. If the reserve goes below 100%, it's subject to speculative attacks. So, in order for it to be safe, the reserve must be kept much above 100%. The great advantage is that you can track arbitrary prices in a fully decentralized, pseudonymous and transparent way. The protocol can ensure the reserve won't be stolen, how much is held in reserve is a public data, the reserves can't be seized by desperate governments etc. The disadvantage is that the one holding the reserves would be paying a high opportunity cost. Why would you put so much money aside? There needs to be some gain opportunity for private individuals to voluntary issue currencies in this scheme.

Anyways.... how exactly does BitShare sub-currencies intend to track arbitrary asset prices? I was thinking it was going to follow the Mastercoin strategy, since among your principles you list 'no-trust' and 'decentralization'. But I read the part in which supposedly you explain how BitUSD tracks the price of USD and I confess I don't get it. You talk about short and long positions, but what's tracking the price? Can somebody explain me like I'm five?

It is really very simple.  BitShares is a continuous block-chain-based prediction market where what is being predicted is the value of USD relative to BitShares.  BitUSD is the long side, BitShares is the short side.  BitShares are transferred from the winner to the loser based upon which way the market moves.  All positions are voluntary and we are not a party to any position.   

No USD needs to change hands.  In fact, you could create BitMars and estimate the value of owning Mars relative to BitShares.   

[charleshoskinson]

Charles is not the creator, I am.  He helped bring in funding and bootstrap the business.    We are working with various parties to explain the concepts better.

This is correct. Daniel Larimer created BitShares. We first started discussing it in the Project Invictus thread in June. He's doing an excellent job and I think BitShares will be a very innovative project moving forward in the future. I'm glad I could help get them started and moving in the right direction.

[LiteCoinGuy]

BTS is only a ponzi game covered up by P2P assets & P2P EXCHANGE. But BTS assets are not created on BTC protocol.
They just wanna program a new ALT coin . 
I only trust BTC protocol based virtual assets project like coloredcoin Or mastercoin

i would also prefer coloredcoin Or mastercoin system rather than a new coin 

[bytemaster]

BTS is only a ponzi game covered up by P2P assets & P2P EXCHANGE. But BTS assets are not created on BTC protocol.
They just wanna program a new ALT coin . 
I only trust BTC protocol based virtual assets project like coloredcoin Or mastercoin

i would also prefer coloredcoin Or mastercoin system rather than a new coin 

Your preferences are irrelevant when Colored Coins are nothing but illegal bearer bonds subject to default and regulation and Master Coin has yet (to my knowledge) to propose a solution to fix his 'price pegging' system since he paid me 3 BTC for pointing out the fundamental economic flaws.

Lastly, for scalability purposes you NEED parallel and independent block chains.   The bitcoin transaction volume would increase by several orders of magnitude if an exchange were integrated into the current block chain with either colored coins or master coin.   Bitcoin is not prepared to handle that transaction volume.

[caveden]

I only trust BTC protocol based virtual assets project like coloredcoin Or mastercoin

i would also prefer coloredcoin Or mastercoin system rather than a new coin  

Using the main bitcoin blockchain has its advantages, mainly being able to count with the high quality development effort/team that Bitcoin has, not to mention its strong chain security.
But it has some disadvantages too, namely the fact that you might end up having to pay more expensively for you transactions. A multi-chain approach like this BitShares also make scalability much more easier, you only need to handle the chains you wish to work with. It's an interesting approach.

Colored Coins are nothing but illegal bearer bonds subject to default and regulation

As an experienced bitcoiner, you should know that being illegal doesn't prevent some things to thrive. And you might find some jurisdictions in which it would be accepted.

and Master Coin has yet (to my knowledge) to propose a solution to fix his 'price pegging' system since he paid me 3 BTC for pointing out the fundamental economic flaws.

Currency boards do exist and do manage to keep their pegging for decades. The "only" constraint is keeping large reserves. In the case of mastercoin, these reserves would need to be quite high. But besides that, what are the "fundamental economic flaws" you see?

I was going to suggest you implement the same currency-board-like thing in your system, it would make it richer.

Lastly, for scalability purposes you NEED parallel and independent block chains.  

You don't NEED with capital letters like that. But it's a good plus to have.

It is really very simple.  BitShares is a continuous block-chain-based prediction market where what is being predicted is the value of USD relative to BitShares.  BitUSD is the long side, BitShares is the short side.  BitShares are transferred from the winner to the loser based upon which way the market moves.  All positions are voluntary and we are not a party to any position.  

I'm still trying to understand that. If I understand well, when you go long on an asset, it's basically as if you were using borrowed money to buy larger volumes of that asset than you'd be able to do with your money. If this asset goes up in price, you are able to pay your debt and also make a larger absolute gain. But if it goes down, your "reserve" will be burn out quite quickly. For ex. in a 10:1 leverage, a -10% oscillation would force your position to be liquidated so your debts could be payed.

Now back to BitUSD.... how is that a long position in USD? Isn't that a coin issued by someone? Anybody can issue more BitUSD as long as they deposit the necessary reserves in BitShares? So, let's say I believe the price of USD will go up in relation to BitShares, how do I proceed? I set aside, say, $1k worth of BitShares on a 10:1 long position and then I can issue myself 10k BitUSD? If the value of the USD goes near 10% down in relation to BitShares, miners would be able to confiscate my reserves of BitShares and destroy the corresponding BitUSD, I assume. But how would miners decide which is the "protocol-official" price of USD in relation to BitShares? Do you intend to create some price publishing mechanism like those in Mastercoin, and each BitWhatever issuers would decide which publish(er) to use?

[bytemaster]

It is really very simple.  BitShares is a continuous block-chain-based prediction market where what is being predicted is the value of USD relative to BitShares.  BitUSD is the long side, BitShares is the short side.  BitShares are transferred from the winner to the loser based upon which way the market moves.  All positions are voluntary and we are not a party to any position.  

I'm still trying to understand that. If I understand well, when you go long on an asset, it's basically as if you were using borrowed money to buy larger volumes of that asset than you'd be able to do with your money. If this asset goes up in price, you are able to pay your debt and also make a larger absolute gain. But if it goes down, your "reserve" will be burn out quite quickly. For ex. in a 10:1 leverage, a -10% oscillation would force your position to be liquidated so your debts could be payed.

Now back to BitUSD.... how is that a long position in USD? Isn't that a coin issued by someone? Anybody can issue more BitUSD as long as they deposit the necessary reserves in BitShares? So, let's say I believe the price of USD will go up in relation to BitShares, how do I proceed? I set aside, say, $1k worth of BitShares on a 10:1 long position and then I can issue myself 10k BitUSD? If the value of the USD goes near 10% down in relation to BitShares, miners would be able to confiscate my reserves of BitShares and destroy the corresponding BitUSD, I assume. But how would miners decide which is the "protocol-official" price of USD in relation to BitShares? Do you intend to create some price publishing mechanism like those in Mastercoin, and each BitWhatever issuers would decide which publish(er) to use?

Not anyone can issue BitUSD... the only time BitUSD can be issued is when a long and a short agree on a price.   Each posts an equal number of BitShares resulting in a short position with 200% collateral and a long position.    If the price moves against the short, the collateral will be used to repurchase the long position on the open market (all BitUSD is fungible) and the short position loses money.  If the price moves against the long position then when they sell their position they end up with less BitShares than when they started.   It would be like selling BTC for USD and then watching the price of BTC jump $30 in one week when you repurchase BTC you end up with less than you started.  

The long position maintains purchasing power equal to 1 USD, but no USD ever needs to enter the system or be held by a trusted 3rd party.

[bytemaster]

I opted to read the white paper rather than view the video.  As I read it, rather than studied it, I think I have a broad general understanding of BitShares.  There are some interesting ideas (such as the options-like operations -- puts, calls, perhaps strips and straddles) that I will need to study closely.  Given my belief that I do have a general understanding, I ask you the following:

1.  This will be CPU mining, correct?
      a.  If not, then what?
      b.  You indicated that there could be modifications/restrictions applied that would inhibit centralization, as
           in huge ASICS farms.  True?
      c.  Do you envision a throttle mechanism via the wallet or something else?
      d.  What is to prevent a bad actor from assembling many CPUs and running under different names/accounts?

That's enough for starters.  I think this idea has real potential.  It is hard to imagine what all could be done if/when BitShares comes to pass.

/Frank

See the threads on the Momentum Proof of Work for my CPU mining algorithm.

The blockchain works like Bitcoin, a bad actor with many CPUs can only attempt a double-spend of their own funds or attempt a denial of service.  Neither of these options is profitable compared to using the same hardware for mining.   

There are no 'accounts or users' in the system and nothing depends upon reputation or trust.