This is the second article about the evolution of digital currencies focusing on BitShares and the technological innovations produced by Daniel Larimer and his team. This post will touch on the problems BitShares was created to address and the target audience it was intended to reach.
Why BitShares?
Exactly what problems does blockchain technology and BitShares in particular solve, and who benefits? Where do I begin, there are so many problems with the financial systems of the world right now.
Look at what's happening in Greece with their economic problems or the outright theft of funds (actually referred to as a bail in) directly out of bank accounts in Cyprus. Corrupt bankers are not a new problem; we've seen them many times before in history. Most people probably shake their head in disgust when they think about banks, yet they continue to put their trust in them. Perhaps fewer people do so in Greece or Cyprus.
Why does it take days for a check to clear? Why does it cost so much to transfer funds to another location? Why aren't you paid reasonable rates for the use of your money? How does the banking system help you for the fees you pay?
Why are we facing these problems? It's because there is no incentive to prevent them. It benefits those in power that make the policies to perpetuate the system. The chief problem is the system itself, which provides the policymakers the means to maintain a monopoly of control over the economy and in turn control over people.
Some believe control over the economy is necessary to focus society to prevent chaos or massive wasting of resources. If monopolistic control of the economy is intended to avoid massive waste, it's not doing a very good job of it. Rather, we see orchestrated booms and busts, forcing people to ride the economic roller coaster to the advantage of only a few privileged at the top of the control oligarchy. Clearly we need a new system that does not suffer from control by a small minority of so-called leaders.
Centralization vs. Decentralization
How has it been possible for a small group of people to maintain control for so long over the economy and therefore over so many lives? The philosophical yet simple answer is through trust in authority. The practical answer is through centralized hierarchical institutions that implement a chain of command which defers local decision-making out of the hands of the people with the most information who are closest to the situation up the chain for others less informed and often less equipped to handle.
Isn't Centralization More Efficient?
It’s certainly true that centralization has its benefits in terms of efficiency, for example benefits arising from economies of scale. Centralized systems avoid duplication of effort which represents tremendous benefits through the division of labor. It saves everybody the burden of learning how to do everything under the sun themselves, whether that be working on your own car, mowing your own lawn, raising your own food or manufacturing parts and tools you use in everyday life using technology such as 3D printing.
Despite the benefits, centralization comes with a price, and many are beginning to realize that price may be too high. Clearly a hybrid approach is required to gain the advantages of both centralized and decentralized approaches. People are returning to produce their own food because food produced by factory farms isn't as healthy, and is often actually detrimental to good health.
How Does BitShares Address These Problems?
First and foremost BitShares addresses the problem of centralization of control. Blockchain technology, upon which BitShares is built, is inherently decentralizing. BitShares eliminates the middlemen between you and the people or companies you wish to do business with. BitShares provides the ability to transfer value to anyone in the world at minuscule fees. BitShares helps to prevent corruption by providing accountability through a public ledger. BitShares provides a true free market economy without corruption or manipulation, giving those that use it the freedom of choice of products, services and those that offer them.
Who built BitShares and don't they control all of this?
How is BitShares governed, and how does it adapt to changing conditions? These are all very important questions and are handled quite differently than they are with other crypto-currencies such as Bitcoin. The short answer is the users of BitShares, the shareholders, provide this governance. It is a worldwide membership organization, or co-op, where each member has a say in these matters proportional to the number of BTS (the original token of value traded in the BitShares ecosystem) they own. If you want a stronger voice by more BitShares, it's your choice. You may even choose not to hold any BitShares, reducing your influence to zero.
BitShares Target Audience
Technogeeks: The primary audience of this work are people who are technologically proficient and have some knowledge of digital currencies such as Bitcoin. However, technological proficiency does not require being a computer science expert or a math whiz. If you are comfortable using a modern computer, whether that be a Microsoft Windows, Apple Macintosh or even a Linux system, and are interested in learning about the exciting world of the BitShares ecosystem, you are poised to take an exciting ride in the pages ahead.
Principled Philosophers: If you are someone who values the foundations of freedom, a free market economy and non-coerced voluntary interactions and want to play a role in shaping the future, there are many ways to get involved in the BitShares revolution. You may be aware of the impact blockchain technologies are currently having on society and wish to learn more about the principles the BitShares ecosystem is based on and the far reaching implications they will have on society. Congratulations on taking tangible action to transform the dream into reality.
Economic Enthusiasts: Another demographic that stands to gain much from this work are people that are interested in economics. Investors, speculators, students of economics and academics will be exposed to the richness of the BitShares ecosystem and what it portends to the financial world. Those in this camp who are familiar with the stock market, futures trading, derivatives and the world of banking and finance will be on familiar ground. I will guide you through the technological maze and equip you with the knowledge you need to use the BitShares ecosystem to your fullest advantage.
The average Joe or JoAnne: Those readers who have heard about bitcoin and are taking their first steps to learn what all the buzz is about, or perhaps those who are dissatisfied with the economic choices available to them and are looking for a better, safer way to save their money, or people who just want to get in on the ground floor of what many are now calling bitcoin 2.0 - all of you will be encouraged and inspired from the contents of this series. It may be a mountain of information and challenging for some to absorb, but it will be well worth your time as an investment in your future financial freedom and prosperity. I promise to break it down into simple concepts like you are age 3 and not talk to you like you have a PhD. Just bear with me and be patient, as the payoff is worth your perseverance.
The Unbanked Billions: The existing financial oligarchy is extremely exclusionary. There are literally billions of people around the globe that don't have access to banking. You may be asking yourself how many of those billions have a computer or access to the Internet. You might be surprised to learn that a significant number actually do have access to the Internet through their cell phone. Not only is that a huge workforce it also represents a 700 trillion dollar market! If you are one of the un-banked shut out from participation because you weren't deemed worthy of inclusion, take heart, because your luck is about to change for the better in a rather dramatic way! You are about to learn how you can stop being excluded and start getting involved in the global economy!
Conclusion
BitShares is a highly efficient, self sustaining, decentralized ecosystem built for safety from counterparty risk and to maximize choice through consensus established with Delegated Proof of Steak shareholder voting. BitShares empowers the individual by promoting voluntary, nonviolent interactions and economic trade between people anywhere in the world. Come, take part in this exciting and truly revolutionary new system that is poised to transform the world of finance and the lives of millions like you.