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Author Topic: BitShares and Mastercoin - a comparison  (Read 17253 times)
ripper234
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Ron Gross


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November 05, 2013, 02:09:15 PM
 #1

I just found this video explaining BitShares.
I must say the video is much more effective at explaining what BitShare does than the whitepaper!

Essentially as far as I understand, here is my TL;DR:

  • ProtoShares in a new alt currency, that will be used for the issuance of BitShares and various derived instruments. The details are here. It's uses a CPU-based hash algorithm called Momentum which is much more GPU/ASIC resistant. ProtoShares are mined over a period of a bit more than a year (from the chart I see about half are mined within three months, 90% something of the protoshares are mined within a year). This is an alternative, more decentralized / "fair" to create the protoshares than Mastercoin's 1 month issuance.
  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
  • BitShares functions like the Mastercoin CFD feature we're just discussing. It acts as a marketplace for interested parties to trade long/short positions with each other.
  • Most of Mastercoin's planned currency features revolve around the concept of Price Feeds, where the feed is provided by an trusted 3rd party. There are some thoughts about removing the need for a 3rd party, but nothing concrete has been designed yet. BitShares suppose to not need 3rd parties at all, and claim just naming something "BitUSD" will drive the market to price it accordingly. I seem to be missing something here - I don't understand how the BitShares blockchain determines who wins the result of a long/short position on a given currency. If it relies completely on the market for this currency (actually, for CFDs), it sounds like someone can manipulate this market in order to corrupt a previously closed CFD. I am curious to hear from BitShares/Invictus about this point

Overall these two features - BitShares and Mastercoin CFDs - sound a lot like each other. I know that Mastercoin has a lot more planned, and Invictus seem to have a big agenda as well ... it would be interesting to see the two projects compete and complement one another over the next year/s.

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November 05, 2013, 09:07:00 PM
 #2

The pricing works like a prediction market and the 'price' used for margin calls is when the highest unaccepted bid.  This means that the whole market agrees the price is above the bid and below the ask.  Attempts to manipulate this price by posting higher bids will be immediately accepted.   As a result I do not depend upon price feeds, but voluntary transactions every step of the way with the exception of margin calls that is.

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November 06, 2013, 01:48:42 AM
 #3

  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
This is a big plus for mastercoin. It would be hard to do large trades knowing that a 51% attack is easy to pull off. It will be interesting to see what kind of miner support they get.

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November 06, 2013, 02:02:04 AM
 #4

I just found this video explaining BitShares.
I must say the video is much more effective at explaining what BitShare does than the whitepaper!

Essentially as far as I understand, here is my TL;DR:

  • ProtoShares in a new alt currency, that will be used for the issuance of BitShares and various derived instruments. The details are here. It's uses a CPU-based hash algorithm called Momentum which is much more GPU/ASIC resistant. ProtoShares are mined over a period of a bit more than a year (from the chart I see about half are mined within three months, 90% something of the protoshares are mined within a year). This is an alternative, more decentralized / "fair" to create the protoshares than Mastercoin's 1 month issuance.
  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
  • BitShares functions like the Mastercoin CFD feature we're just discussing. It acts as a marketplace for interested parties to trade long/short positions with each other.
  • Most of Mastercoin's planned currency features revolve around the concept of Price Feeds, where the feed is provided by an trusted 3rd party. There are some thoughts about removing the need for a 3rd party, but nothing concrete has been designed yet. BitShares suppose to not need 3rd parties at all, and claim just naming something "BitUSD" will drive the market to price it accordingly. I seem to be missing something here - I don't understand how the BitShares blockchain determines who wins the result of a long/short position on a given currency. If it relies completely on the market for this currency (actually, for CFDs), it sounds like someone can manipulate this market in order to corrupt a previously closed CFD. I am curious to hear from BitShares/Invictus about this point

Overall these two features - BitShares and Mastercoin CFDs - sound a lot like each other. I know that Mastercoin has a lot more planned, and Invictus seem to have a big agenda as well ... it would be interesting to see the two projects compete and complement one another over the next year/s.
Nice summary. Have a Protoshares tip address?

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November 06, 2013, 07:03:03 AM
 #5

  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
This is a big plus for mastercoin. It would be hard to do large trades knowing that a 51% attack is easy to pull off. It will be interesting to see what kind of miner support they get.

We set the initial difficulty to require about 8 hours of solid CPU time to find a block.   Initial mining indicates that we are finding blocks on average every 30 seconds until the difficulty adjusts in a couple of hours which suggests that there are over 1000 computers mining on day one.... and I can tell you they are not mine Sad   

Initial prices are around 0.01 BTC per PTS so that means mining will increase dramatically because it is very profitable at the moment.

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November 06, 2013, 07:14:17 AM
 #6

  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
This is a big plus for mastercoin. It would be hard to do large trades knowing that a 51% attack is easy to pull off. It will be interesting to see what kind of miner support they get.

We set the initial difficulty to require about 8 hours of solid CPU time to find a block.   Initial mining indicates that we are finding blocks on average every 30 seconds until the difficulty adjusts in a couple of hours which suggests that there are over 1000 computers mining on day one.... and I can tell you they are not mine Sad   

Initial prices are around 0.01 BTC per PTS so that means mining will increase dramatically because it is very profitable at the moment.

Where can I get the mining software and a guide?
See my Digital Ocean guide on the Altcoin forum.

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November 06, 2013, 08:23:33 AM
 #7

  • BitShares use a new blockchain for time synchronization (5 minute blocks), while Mastercoin uses the same Bitcoin blockchain. Merged mining is not mentioned, not sure it's possible - so a large pool of honest miners will be needed to ensure there are no 51% attacks.
This is a big plus for mastercoin. It would be hard to do large trades knowing that a 51% attack is easy to pull off. It will be interesting to see what kind of miner support they get.

We set the initial difficulty to require about 8 hours of solid CPU time to find a block.   Initial mining indicates that we are finding blocks on average every 30 seconds until the difficulty adjusts in a couple of hours which suggests that there are over 1000 computers mining on day one.... and I can tell you they are not mine Sad    

Initial prices are around 0.01 BTC per PTS so that means mining will increase dramatically because it is very profitable at the moment.

Where can I get the mining software and a guide?
See my Digital Ocean guide on the Altcoin forum.

I read your thread. Not interested. I'd like an answer from bytemaster, thanks.
You must not have mined before have you?

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November 06, 2013, 11:02:25 AM
 #8

Nice summary. Have a Protoshares tip address?

Thanks, you can send some protos my way at PbMprTDayAYEn5scpQStCqaisQqkxTfBbM

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November 08, 2013, 03:46:02 AM
 #9

Another point of comparison - it was really easy for someone to invest in Mastercoin - just send bitcoins to 1Exodus.
With ProtoShares, it's currently rather difficult to obtain them.

If I decided I like ProtoShares and want to invest $100,000 in them ... there would be no easy way for me to do this.
Setup dedicated servers? Too technical
Try to find trustworthy people to buy their mined shares from? Too fragile.

The investment mechanism of Mastercoin (and after, Nxt) is really elegant in that is allows anyone to just convert btc into shares in the new project.

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November 08, 2013, 01:04:22 PM
 #10

I don't see having to stumble upon a thread within an extremely limited window of time in order to get to buy some Mastercoins as elegant at all, on the contrary it seemed like the kind of rush rush hurry hurry you'll miss the deal if you don't buy right now hustle that hustlers and scammers like to use to get people off balance to get them to buy quick before really thinking about it or even getting to thoroughly investigate what it even is. By the time word got out that there was a new altcoin being launched but not in the altcoin part of the forums, it was too late to buy in. Its just like people who launch an alt on some obscure forum elsewhere, but you did it right here, clever trick but maybe just as sleazy since having a username on here meant you could as easily have put also an announcement in the altcoins section.

If there is no exchange yet for protoshares and you want to invest in protoshares maybe investing in a project aimed at creating / running an exchange for it would be a logical starting-point

If there is an exchange it is on then what is the problem, just put an offer on the exchange? Or would you not consider that an ivnestment into the coin/ecosystem?

-MarkM-

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November 08, 2013, 03:08:43 PM
 #11

There is one important point here which bytemaster touched on, but no one else seems to have picked up:

* mastercoin relies on a *centralised* price feed for its CFDs
* bitshares do not

Centralisation is something which bitcoin was designed to avoid at all costs, so this is a bit of a backward step for mastercoin.

The big question for me is whether the proposed technique for bitassets to track the 'actual' price of the asset they reflect will actually work. The white paper is somewhat lacking descriptively.

Cheers, Paul.
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November 08, 2013, 04:04:02 PM
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I don't see having to stumble upon a thread within an extremely limited window of time in order to get to buy some Mastercoins as elegant at all
'Stumble upon' - just like in school, I was doing my homework and you were smoking your bong.  Now the man who drives the trash truck hates me because my wife is pretty and my house is big.  

clever trick but maybe just as sleazy

Calling JR sleazy for the Mastercoin launch is ridiculous.  What a freaking crybaby that you didn't participate until everyone else informed you about how important the project was.  You act as if JR concealed information in an obscure thread.  The opposite is true - he paid everyone to tweet about the project in every forum imaginable.  

Morons like you deserve to miss the boat - and miss it again is your fate.  You'll spend the rest of your life crying about how the others unfairly got ahead of you when instead you should be doing your homework.

Now wise up.  

MSC is at an insanely low price today.  Five years from now you can have 20 million dollars if you just make a modest investment in MSC today.  You are in this deal at a VERY early stage.  So get in it.  Get in it and stop crying about yesterday.  

Or, you could just sit there crying and bitching about how unfair everyone is.  And 5 years from now, you'll still be driving your trash truck telling your neighbors how you should'a-could'a bought MSC years ago.

Now crack open your piggy bank and get in there: https://docs.google.com/spreadsheet/ccc?key=0ApGPLGUd5ZCzdHFxbnhHQjBDSDVKamY5UHlWdkNMNWc&usp=sharing#gid=0

...or, just keep bitchin' and blaming JR for cheating you out of your due.  Idiot.
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November 08, 2013, 04:16:36 PM
 #13

If there is an exchange it is on then what is the problem, just put an offer on the exchange? Or would you not consider that an ivnestment into the coin/ecosystem?

-MarkM-

I'm busy over my heels working on Mastercoin. Mastercoin is poising itself to be the exchange that you could launch these kinds of projects on in the future. It's just not ready yet ... and I think we still need to refine our message ... there's a lot of good opinions about Mastercoin, but a lot of negativity as well, and it is my belief that at least some of the negativity arises from misunderstanding what Mastercoin really is about, its capabilities, or its vision. We're working on improving that Smiley

There is one important point here which bytemaster touched on, but no one else seems to have picked up:

* mastercoin relies on a *centralised* price feed for its CFDs
* bitshares do not

Centralisation is something which bitcoin was designed to avoid at all costs, so this is a bit of a backward step for mastercoin.

The big question for me is whether the proposed technique for bitassets to track the 'actual' price of the asset they reflect will actually work. The white paper is somewhat lacking descriptively.

Cheers, Paul.

Mastercoin has plenty of different compatible features. CFDs weren't even a thing 1 week ago.
We can copy and adapt whatever technology or idea used by other projects, if they are superior to what we are using.

The benefit of doing all that on Mastercoin is that very quickly we'll all have a unified platform where all these different features co-exist ... we'll let the market decide whether CFDs, Escrow-based Backed Currencies, or BitShares style assets is the better solution. Have no doubt that the BitShares model can be implemented on top of Mastercoin if needed.

Mastercoin is a platform, it is not one feature or another.

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November 08, 2013, 10:22:25 PM
 #14


Thanks for actually indicating an exchange. I posted in some thread or other some time ago asking what exchange it is on when someone posted about it having some certain price or other, but so far I had not stumbled upon any response.

Personally I did stumble upon it a day or few before the deadline, decided it sounded worth checking out so I started the process of reading up on it but by the time the deadline hit what it was that was to be created still did not seem to have even been decided. Even reading the last few days it seems the process of working out what it is that Mastercoin is going to be still seems to not be quite figured out yet though various prototypes do at least seem now to be able to read each other's messages once they have seen them not figured them out quite right and been tweaked again, and I read today that what one person has been using for a protocol or standard or syntax or somesuch he does expect will actually end up in the specs when next the specs are released.

So It does seem much closer now to actually being a particular protocol or set of protocols one could by this point maybe dig into enough to try to figure out whether they seem well thought out.

But not only are the centralised data feeds a concern but also it now seems that possibly the whole pegged currencies based on data feeds might be going on the back burner? Whereas that was what I thought we were deciding whether to buy into during those days I did have before the deadline in which to decide whether they did sound like they would work. So if I had bought in I would now be having to worry that that stuff is maybe no longer what the project is even about?

So yeah it still seems too early yet to even know where this project is even heading. Contracts for difference now possibly, maybe?

-MarkM-

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November 08, 2013, 10:50:16 PM
 #15

markm, I invite you to skype with me a bit, I'll be happy to explain more.
It's a deep project and there's a lot to discuss, and I just don't have the time to explain it all / do this detailed ping pong on this thread.

We are working on improving our documentation and phrasing, working on our FAQ all the time, and just pushing things forward.

Please email me at ron.gross@gmail.com if you want to setup a skype call.

You can also keep asking questions here of course, just trying to save us both some time and I value you enough to want to dedicate some 1-on-1 time to answer your questions personally.

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November 08, 2013, 11:01:41 PM
 #16

No need for one on one info for me, work on what all the public gets to read.

I'll mine some protoshares and if bitshares or protoshares takes off maybe they will make me enough spare funds to make me think about buying some Mastercoins.

If I do buy in I'll be better off with the public reading stuff that is understandable than any personal explanations just for me would make me.

-MarkM-

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November 09, 2013, 04:50:20 AM
 #17

After spend pretty much time for online information digging.... i will step in like markm's way. Participating in BitShare first, and touch the Mastercoin later when feel it well.

I like bitcoin, feel the future. Test the address now: 1C3dsz8qHWwVmwrGQYkMduN6eqqDbpvNAm
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Ron Gross


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November 09, 2013, 06:49:32 AM
 #18

No need for one on one info for me, work on what all the public gets to read.

I'll mine some protoshares and if bitshares or protoshares takes off maybe they will make me enough spare funds to make me think about buying some Mastercoins.

If I do buy in I'll be better off with the public reading stuff that is understandable than any personal explanations just for me would make me.

-MarkM-

Good approach.

FYI we started discussing about producing a better video for our  homepage.

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November 09, 2013, 09:52:25 PM
 #19

This is interesting.
Who will win?

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November 10, 2013, 02:34:44 AM
 #20

There is one important point here which bytemaster touched on, but no one else seems to have picked up:

* mastercoin relies on a *centralised* price feed for its CFDs
* bitshares do not

Centralisation is something which bitcoin was designed to avoid at all costs, so this is a bit of a backward step for mastercoin.

The big question for me is whether the proposed technique for bitassets to track the 'actual' price of the asset they reflect will actually work. The white paper is somewhat lacking descriptively.

Cheers, Paul.

Trusted, not necessarily centralized. Having to trust the price feed is an issue, but having to trust the market which can be manipulated is the issue Bitshares will have.

I don't really see an easy answer. I don't have complete faith in the market or in its participants.
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