Why We Should Only Use BitShares To Trade
Talk about being behind the curve on this one. And yet, maybe not. Yesterday I chose to spend some time and learn what BitShares was all about. The more I learned, the more I fell in love with this trading platform. For whatever reason, when I first heard about BitShares I shrugged it off as I seem to do with most things.
There is only so much time in the day to learn! Even then, it is better to learn something later than never at all. If you have never heard of BitShares, I hope this post perks your ears. If you have but don't know what all the fuss is about, then you are in for a treat.
Decentralized
One of the main advantages of cryptocurrency is that it is decentralized. No one company or person has control over the asset. Any coin or token that claims to be crypto but has some degree of centralization, I don't invest in. I'm not an investor but a nerd that loves privacy and free speech.
If the majority of tokens and coins on the market are decentralized, why are we then using centralized services to buy, sell, and trade? When we use a site like Bittrex, we hand over a lot of security and are at a big risk of losing any wealth stored there.
NEVER STORE CRYPTO ON A CENTRALIZED EXCHANGE
The reason we don't want to store much wealth there is due to the fact that we ultimately do not have control of our keys. When we send STEEM to Bittrex it is technically in their control. If they shut down without warning we lose any wealth stored there. This is exactly what happened to MT. GOX.
BitShares is completely different. It decentralized, making it impossible for governments to shut down or hackers to have one area to attack. Furthermore, we are able to store wealth there without the need to worry about BitShares being hacked and losing our funds. This is because each account is controlled by the owner.
I do not think it is a smart choice to use BitShares as the sole place to store your coins though. You personally could be hacked and then all your wealth could be wiped out. However, this is a much better solution than any centralized exchange. Just make sure you treat your password with the utmost security.
Fast
Just like Steem, the BitShares blockchain has a mere three second blocktime. This is very important when trading crypto back and forth. No one wants to set a bid and miss out because the blockchain-based exchange is too slow. These fast blocks lead us into our next point.
Undervalued
BitShares is both a decentralized exchange and a cryptocurrency, and this currency is greatly undervalued. This is for the same reason we talked about in the post Do Not Underestimate STEEM. The token is inexpensive and handles almost one million transactions per day. Which places it third only to STEEM and Ethereum.
As we did in the post about STEEM, let's see what the price of one BitShare would be based on the 'AVI' as listed on Blocktivity.info. In case you did not see the last post or have never been to Blocktivity, here is what the AVI is all about.
This index takes the Bitcoin value (market cap) and the number of transactions (Tx) per day and makes it an index set to "1." Then, it varies with the other blockchains' data. The index grows when the blockchain is very active and its market cap is low. A blockchain with the same amount of Tx as Bitcoin but with only half of its market cap would have an AVI of 2. From the investor point of view, it would be twice as valuable as Bitcoin because it would have the same level of activity with only half the market cap. - blocktivity
from blocktivity.info
On the site, Blocktivity has the BitShares 'AVI' listed at 410 as I write this. Which means it is undervalued by that much based on the number of transactions it currently handles and its price. So we can say that BitShares is worth 410 times its current price which is about $0.22 right now. In order to hit an 'AVI' price of 1, a single BitShare would be worth $90.20 USD. Not too bad for a coin many people thought was dead.
bitUSD Tether And Others
Within BitShares there is a list of several different sites that offer services on the BitShares blockchain. bitUSD is an example of such. In this case it is pegged the purchasing power of one USD. I wish I'd learned about this before the recent pullback all across crypto. I never trusted 'Tether' but bitUSD seems a better option.
Then we have bitGold and bitSilver. These are tokens that reflect the price of both gold and silver in USD. So if one troy ounce of gold would cost $1337.00 USD, one day, so would that token. The same goes for bitSilver but at a much lower cost. These are awesome alternatives to a dollar tether.
It is not just BitShares that offers these contract tokens on the network. Any site that we may use to access the BitShares blockchain can issue their own contracts backed by another asset. One such example is open.EOS, where the price of this contract is the same as the current price of one EOS.
from wallet.BlockShares.org
We can buy these contracts with the BTS we have in our account and trade them around just as if they were EOS. The upside to this comes when we factor in the speed of the blockchain and the fact that it is a blockchain. If we own 100 open.EOS, the OpenLedger site has to have that many EOS on hand.
This is for us for when we wish to hold the real coin in another wallet. With the blockchain it would be much harder to participate in fractional reserve lending of these coins unless the witnesses change via a hardfork. This same function applies to any site connected to the BitShares blockchain.
But Wait! There's More!
This is only the beginning for me in my BitShares journey. As I learn more I will be more than happy to share what I come across. One of the aspects I need to understand more about is the contracted tokens. Sending OpenLedger some Ethereum in order to trade open.ETH on the BitShares blockchain seems odd to me.
I am all about holding my own keys and coins. However, if it is hard coded that these portals can not have less of a coin than contracts for said coin, I may give it the old college try. Even if I don't send coins in return for contracts but trade into them with BTS I will never use a centralized exchange again.
Thanks for reading!
Let me know in the comments if you have any questions. or found a typo!
I'm using BitShares for half a year now and it's AWESOME! Also having account on Bittrex, but I just not using it at all, having a DEX.
I just shoked how few people using DEXes now (
ANYONE who is in ctrypto must know BTS for a practical reason.
Preach it brother
xD
Yes - Bitshares is a great platform. Thanks for walking through the details.
And right now is one hell of a time to buy should one choose to do so. At 23.6 cents right now, it's a good deal. It was at almost 1 dollar just last week so right now you'd get nearly 4x the amount of BTS for your money by comparison. When a big dip like this happens, I hope people make the effort to learn about it like you did.
I know! such an awesome deal. To bad I don't have any fiat to covert to BTS :D
You can't use some SBD to buy it? That's what I do.
Yes you can move both STEEM and SBD to BitShares and that is what I will most likely do in the future
You're so nice for commenting on this post. For that, I gave you a vote!
Thank you guys. I just have a lot of faith in Dan's vision and his work ethic as well as the technology he creates. Steemit has been very good to me so as soon as I felt the time was right I started diversifying a little with my Stemit earnings :)
i wish that i dont sell bitshares when was much cheaper than now :(
Good article, thanks.
I'll certainly take a look at it. It seems dumb that we're all trading decentralised assets on a centralised server that is prone to government legislation, control and audit, or worse, shut down and run away.
I've never looked past BTS, but I'll certainly go take a look at the exchange, thanks!!
Following.
Thanks for the follow!
hahaha I know right! That is the main reason I am going to focus my trades on BitShares as much as possible from now on.
Thanks for this intro post! I think the lending and arbitrage parts of bts is even more interesting, but I´m in the same boat like you and still have to figure out how this works... The reasons, why I haven´t yet taken the time to learn more about it is, that 1. the trading volume on the DEX is extremely low, 2. the number of traded coins is marginal and 3. everyone and their grandmother seem to think, that EOS will be way better and bts is a dying project.
I am a bit sick of the EOS hype train lately. It's going to be a great project if BitShares and STEEM say anything for Dan's ability to create amazing blockchains.
I don't think EOS in going to throw off BitShares at all. It is in third place for the total number for transactions per day and it's not clogged up. Guess only time will tell how it all unfolds.
Thanks for the comment!
Me too, but I used todays cheap sale prices to get some more EOS, just in case the hype gets real proof in some months ;) I just commented on another post with a similar topic - sometimes it makes me sick that people prefer to buy into hype instead of things that simply work - but good to have common people like you, so that I don´t need to feel like a complete alien ;)
Same. I am not one to invest in speculation. So many cryptos have no product and only promises. That is why I am only bullish on STEEM, BitShares, Bitcoin Cash, and Civic at this time.
I just got into buying a small pile of bitshares a day or two ago, and setup an account there maybe a week ago. I am late to the party as well, but at least I'm there!
I don't think we need to worry. This very well could be the bottom for BTS but I'm just a nerd not a financial adviser ;)
Interesting info. I was not aware of http://blocktivity.info/
This is a measure of value.
The transactions should not be compared only in quantity, some transactions are in average more valuable (bitcoin vs steem), some are faster than others (ETH vs bitcon), some numbers of transactions are on a raising trend...
Your post had been curated by the @buildawhale & @ipromote team and mentioned here:
https://steemit.com/curation/@buildawhale/buildawhale-curation-digest-01-18-18
Keep up the good work and original content, everyone appreciates it!
Thank you so much for adding my post! I will continue to create the best original content I can each day for as long as steem is around and I'm alive. xD <3
Bitshares is intresting. The only other decentralized exchange I have used was EtherDelta. I must say bitshares is alot more user friendly than EtherDelta. Are there any decentralized exchanges that support fiat deposits?
I am not sure, some bitshares sites used to but is seems like they do not any longer.