20th Lecture | Blockchain project details: bit-Share BTS

In the first two articles, we talked about the topic of smart contracts, which can be said to be the hottest concept of blockchain, and in most people's eyes, the value of blockchain without smart contracts is almost compromised.

So, actually, that's not true, we're going to talk today about a blockchain project with no open smart contracts--bit shares.

The bit shares were released in 2014, although the concept of smart contracts was not introduced, but it provides a very rich set of financial instruments, all financial contracts on the bit shares are written in advance in the code, so it is itself a super smart contract collection.

What is a bit share

　　The bit shares are a publicly transparent, 7x24-hour, non-disruptive, blockchain-based, hub-and-go trading platform.

It combines the advantages of the blockchain with the first attempt to stabilize the digital currency, which currently provides a number of core financial services such as payments, matchmaking transactions, asset depository, etc.

Compared to traditional financial IT systems, its servers are maintained by trustees (delegated) scattered around the world, even if some of them are attacked and do not cause the entire system to go down.

There are 27 servers in the whole network online, because the Dpos consensus algorithm provides a good performance of the transaction throughput, theoretically the TPS of the bit shares can reach 100,000, which is the most distinguishing feature of the bit shares in the technical difference from other blockchain. The better TPS is also for its functional service.

Here, we can see the nature of the bit stock platform.

First, the Bitcoin platform is a trading platform, the significant feature of the trading platform is the whole market for time-sensitive, we all want to place a quick deal after the order, so high TPS is a basic requirement of a trading platform.

Second, bit stocks are the central trading platform. The most important problem of the current centralized digital currency trading platform is that both the money management system and the matchmaking system are controlled by the same one.

However, in the traditional securities trading field, securities registration and transaction matching is two different subjects, they are cooperative relations, jointly by the Securities Association of the jurisdiction.

So, if your digital currency has a centralized trading platform and your trading matchmaking is controlled by it, the deal here refers to the process by which both sides of a transaction can match up to the final deal by hanging out the buy and sell orders.

Since all of this is opaque, there are a lot of uncertainties here.

For example, the trading platform of the risk of running, hacking, the loss of assets, or the process of matchmaking, the counterparty is who, whether there is insider trading. These situations can pose a greater risk.

Two mechanisms of the bit shares

　　So how does the bitcoin unit design a centralized exchange to avoid these risks?

As a de-centralized exchange, bit shares have two mechanisms to avoid the above risks.

First, the financial access is supported by the acceptor, everyone can become an acceptor, that is, everyone acceptance; second, the anchoring mechanism provides a stable currency of the process of access and withdrawal, the anchoring mechanism also ensures that the access funds and transaction matchmaking is separated, avoiding the drawbacks of the central trading platform.

This process can be described as: Fiat <-> anchoring assets (System built-in currency) <->bts conversion. From the Fiat to the system built-in currency for everyone acceptance mechanism, from the system built-in currency to BTS conversion to use the anchoring mechanism.

Here BTS is the Bitcoin stock on the circulation of the platform tokens, it and Bitcoin similar to the total cap set, about 3.6 billion, the current flow of about 2.6 billion. We'll take a look at these two mechanisms next.

1. Acceptance by everyone

Everyone accepts is to provide the conversion from Fiat to the system built-in currency, the bit stock system built in a variety of currencies, it anchored the majority of Fiat.

For example, BITCNY, BITUSD, Biteur, and so on, these system built-in currencies are convertible to CNY, USD and EUR by 1:1. And the acceptance of the currency in fact is to provide the BITCNY and the real renminbi between the exchange.

Its mechanism is somewhat analogous to that of Bitcoin's off-site trading. The so-called OTC, that is, there is no central matchmaking intermediary, the transaction of the two sides negotiate their own deal.

For example, if I want to buy Bitcoins, I can find a special acceptor, pay the money directly to the dealer, and then the acceptor will pay me the bitcoin. This part of the content, when we talk about the digital currency exchange when you will explain in detail.

The acceptance of everyone is logically similar, it provides a means of conversion for the CNY Fiat and BITCNY, in effect allowing the exchange of the built-in currency of the Fiat and the bitcoin system to be carried out and trusted.

So from the point of view of fund-hosting, there is a big difference between the bit shares and the central exchange, such as you recharge on an exchange, you can only trust the exchange in custody of your money, when you want to withdraw, you can only trust the exchange willing to let you ask.

But the acceptance of everyone is not the same, everyone acceptance is you from a acceptor to obtain BITCNY, you can find B acceptor and then exchange renminbi, do not need to only in the same place.

Therefore, a person at this time has the need to recharge, over a period of time may have to withdraw the demand, so in fact everyone can become an acceptor, I can be a buyer can also be a seller, the conversion of trading role can make the market more flexible. Of course, the market also has a dedicated to provide top-up and withdrawal service "acceptor", these acceptor charge fees to profit.

However, not all of the centrality of risk can be solved by technology, people and People's trust problem is not a one-to-one solution, even if you are in the face of the transaction may encounter the other side of the fraudulent behavior.

We can only say that the CNY Fiat and BITCNY anchor after the recharge and withdrawal is relatively more secure, everyone acceptance provides an effective mechanism to shorten the gold deposit period, improve the security, if the funds within the system, the entire use of the whole period of time and no one can threaten your assets.

2. Anchoring mechanism

Anchoring mechanism is a kind of centralized mortgage mechanism. We just mentioned that the Bitcoin system has multiple currencies built into it, and it anchors most fiat, such as BITCNY, BITUSD, Biteur, and so on, which can be exchanged for CNY, USD, EUR in 1:1.

The issuer of the system's built-in currency is the system itself, issued to the user who mortgaged the BTS, and the number of releases is determined by the number of tokens in the mortgage. You take the BTS mortgage and then exchange for BITCNY.

In other words, anyone with a BTS can use it to mortgage the built-in currency of the production system, such as BITCNY, whose mortgage rules require twice times the value of the BTS to be mortgaged, with twice times the value of the BTS as a guarantee, so the risk of defining 1 BITCNY = 1 Yuan is lower.

The bit stock system itself provides BTS and BITCNY trading pairs, for example, now that the BTS price is 0.5 yuan, I can generate 1 bitcny, or twice times the price collateral, with 4 BTS mortgages worth 2 yuan.

The mortgage guarantee mechanism guarantees the value of BITCNY, and technically speaking, the consensus mechanism of the bit shares is not feasible to make a malicious modification to the number of BITCNY.

If the BTS price falls, the system will automatically sell my mortgage-generated BTS because it is twice times the value of the BTS, so if it does not plummet by more than 50%, the system can sell the BTS that I have secured on the market and gain bitcny in the market.

If the plunge is more than 50%, the system will sell the mortgaged BTS at a price of 10% (forced closing) until it sells enough collateral to produce the BITCNY.

On the operational level, the payment BITCNY actually consumes the BTS, but how much it takes to buy the BTS at real-time prices.

Buy operation is instantaneous, in the bit shares have a special token pool to provide, real-time prices determined by the system, so users do not have to bear any Bitcoin price fluctuations brought about by the risk.

At this point, the stable bitcny currency is produced, which combines the advantages of the blockchain and is a stable currency.

In addition to mortgages, there are also forced liquidation, the mechanism of forced clearing to ensure that the value and the actual anchoring of the currency equivalent. The content is deep and left to your own digging.

Technical overview of the bit stocks

　　The core code of the BITS is the evolution of the Cryptonomex company's open source graphene (graphene) framework, its main code is written in C + +, which uses a lot of boost library components, if you are interested in graphene technology, and familiar with C + +, you can study carefully.

In addition to the Bitcoin core, there is a set of JavaScript-written UI products, called Bitshares-ui,bitshares-ui, which is actually a lightweight browser-based wallet: a Bitcoin wallet that stores the user key in a local browser. And the key is encrypted by the user password and stored in the browser database.

When the transaction is sent, the transaction is signed locally, then transferred to the proxy server, broadcast by the server to the whole network of bits, this server you can also build yourself.

The consensus algorithm used by the bit shares we have already talked about, is dpos, so the bit shares also have the witness node, there are currently 101 witnesses node, from 101 nodes, the community elected 11 representatives, we call the Council. The Council accepts the community vote and then exercises the right to govern on the bit shares.

Bit stocks are also ECC elliptic curve asymmetric encryption algorithm, it is worth mentioning that the bit shares are not similar to the concept of Bitcoin address, in the bit shares are replaced by a readable account system, these accounts with the private key one by one, the readable account is the address of the Bitcoin system.

For example, my account is "Chenhao", then on the bit shares, you pay me Bitcny, the recipient of a column directly fill "Chenhao" can be.

Summarize

　　Today I give you a detailed introduction to the bit stock system, bit shares is also a great experiment, it broke the blockchain application of digital currency limitations, so that blockchain technology has rich financial characteristics.

The advantages of the bit stock technology are embodied in the DPOS algorithm, so this article focuses on the product characteristics of the bit stocks.

The Bitcoin community is also a clear stream in the blockchain industry, because holding a bit stock often requires learning a lot of financial knowledge.

Investors want to invest in bits, it is clear that the anchoring mechanism is enough to allow speculators to spend a lot of time, so once locked up by the bit shares, it seems only to learn the self-improvement of bits, which also makes the average financial knowledge reserve of the bitcoin community higher than other blockchain projects.

Appendix:

http://bitshares.org/

Https://github.com/bitshares/how.bitshares.works/tree/master/developers#bitshares-documentation-for-developpers

20th Lecture | Blockchain project details: bit-Share BTS