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In 2013, the decentralized exchange BitShares was built, and in 2014 BitShares was launched. Created by Dan Larimer, it used delegated proof-of-stake giving 3 second confirmation times with very predictable, reliable block production. The first version of Bitshares was built off of some of the same ideas as Bitcoin and shared some technology, but still didn't meet the performance requirements of an exchange.

Dan Larimer explains: “At its most inner layer, BitShares is software. To be more specific, BitShares is a distributed multi-user database with update permissions managed by a defined set of rules and public key cryptography. At this level it isn’t very interesting to most people, but is still very important. Software is open source, easily copied and modified, and most importantly protected by free speech. This means that almost nothing can stop BitShares at this layer short of a global event that destroys almost all digital data. Governments once attempted to regulate cryptographic software as a weapon and impose export controls. Governments lost that battle long ago and no longer attempt to regulate or control the spread of free software. In the case of BitShares the software is in the Public Domain”.[1]

In April 2016 a TechCrunch article written by Neil Haran classified that Bitshares used a setup and switch method to attract mass adoption. Similar to the central app strategy, this method establishes a user base first, and then introduces the currency. Bitshares and its array of associated startups is a good example of this. Several networks with varying currencies - Steemit and their STEEM Tokens, Peerplays and their tokens, for instance — slowly built their user base and value exchange system, and now they plan to adopt a central currency with Bitshares. This allows them to create a stable base first before pooling their resources.[2]

In June 2016 Dan Larimer in his Steemit blog told that over the past three years he have worked with the BitShares community to implement the worlds first Decentralized Autonomous Organization (DAO) based upon many of the same principles as Ethereum's The DAO. Money was raised, tokens were allocated, and token holders were given the ability to vote on how to spend community money and set blockchain parameters.[3]

The beggining

In June 2nd, 2013, Dan Larimer published the first idea of Bit-USD in Bitcoin Forum – Creating a Fiat/Bitcoin Exchange without Fiat Deposits (see BitShares:Proposal post) – including a BitShares white Paper. Over the next five weeks, Dan engaged in a series of vigorous forum discussions defending and refining the concept. There he met Charles Hoskinson who helped to vet the idea and develop a business plan. Charles presented the plan to Li Xiaolai in China who agreed to fund the development. On American Independence Day, the Fourth of July 2013, Invictus Innovations was incorporated in the state of Virginia. Invictus introduced the BitShares Vision to the world via presentations by Hoskinson and Larimer at the Atlanta Bitcoin Conference in October 2013. It is here that the plans for Keyhotee were first introduced – an integrated multi-wallet, communication, and Decentralized autonomous corporation (DAC) interface application intended to defend privacy and help spread knowledge of BitShares technologies outside the crypto-currency community.[4]


In 2015 Graphene was created, and Bitshares was completely rewritten. This was able to achieve 100,000 transaction per second on a single machine, and decentralized global stress testing achieved 18,000 transactions per second on a distributed network. Account names were also introduced with Bitshares (advanced hierarchical dynamic threshold multisig), which separated accounts from keys, allowing organizations to be structured and permissions to be delegated to other users.

From BitShares to Steem

In 2016 Steem was launched which had new conceptual issues. Social media users don't want to have to pay for every vote, they need account recovery options, etc... Steem also took the block rewards which are wasted in mining and redistributes them to people who are posting on the blockchain, enabling thousands of people to become active participants through massive decentralization allocation of funds. Steem went from concept in January to working blockchain in March to working website in July. At this point, Steem and Bitshares have more real world transactions occurring every day than the rest of the major blockchains combined. Steem also has a higher female-to-male ratio of users than any other blockchain. However, both Steem and Bitshares are application-specific blockchains. If you want to run multiple apps on the same blockchain, there are significant scalability issues that need to be solved.[5]

BitShares Blockchain Foundation

The (Stichting) BitShares Blockchain Foundation is a non-profit organization registered in Deventer, Netherlands. It is operational since June 2016 and has been preparing industries behind the scenes ever since. In July 11th. 2017, after the block production incidente explained below, the website was lauched: The Foundation’s mission is to promote, advocate and grow the BitShares ecosystem to its full potential.[6] In October 18th, 2017, they announced being elected as official spokesperson for BitShares Decentralized autonomous corporation (DAC).[7]

Block Production Incident

On Monday, July 10th 2017 at 9:00am UTC, an incident occurred on the BitShares network that caused an unplanned interruption of block production. All block producers have been affected by a memory corruption that was caused by an automatic resize of a flat_index container that resulted in an unrecoverable stale state. This has happened for the first time in over two years of blockchain operations. This halting of the network was a first for Bitshares 2.0. The witness team came together and even Dan Larimer showed up to write a patch, in order to pull together and recover from this issue.[8] After several core developers debugging the code, the cause was identified and a patch was quickly delivered to the block producers. Shortly after that, the blockchain recovered and new blocks have been generated. All transaction that made it into the blockchain prior to this incident are unaltered.[9]


  1. What is Bitshares? Written by Dan Larimer and published in Bytemaster's Blog in December 12th, 2014
  2. What’s keeping cryptocurrencies from mass adoption? Written by Neil Haran, published in TechCrunch in 4/20/2017
  3. Is The DAO going to be DOA? Written by Dan Larimer (@dan) in Steemit in June 2016
  4. The History of BitShares, retrieved in 7/25/2017
  5. Introduction to EOS: the Epic (blockchain) Operating System, Written by @trogdor in May 29th, 2017
  6. BitShares Blockchain Foundation website, retrieved in July 19th, 2017
  7. BitShares Blockchain Foundation elected as official Spokesperson for its Decentralized Autonomous Company Written by unsigned on @bitshares.fdn in October 18th, 2017
  8. GIVEAWAY - Bitshares polo and t-shirt up for grabs to celebrate smashing bugs Written by @robrigo in July 11th, 2017
  9. BitShares Block Production Incident Report Wriitten by @xeroc in July 11th, 2017


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