BitShares was launched back in 2013 uses DACs or decentralized autonomous companies. DACs are computer programs that operate to execute business plans. BitShares based itself on Bitcoin’s blockchain network to run programs that can create companies that are inherently global, transparent, trustworthy, and efficient. The BitShares network has a wide variety of tokens used, ranging from BTS to BitSilver. These can be used to transfer funds worldwide and launch DACs on the network. However, for them to be made, BitShares mining is needed.
Delegated Proof-of-Stake
BitShares mining is done via delegated Proof-of-Stake. The problem with the original Bitcoin network is that centralization is possible as mining becomes more and more difficult. The result is that only those with strong hardware would be able to mine. With DPOS, a decentralized voting process selects which nodes process the blocks. The result is that it is more democratic than comparable systems.
Though it sounds risky, the DPOS systems of BitShares has safeguards in place to ensure that those trusted with signing blocks on behalf of the network are doing so correctly. Besides that, each block signed must have a verification that the block before it was signed by a trusted node. In Proof-of-Work systems, a certain number of untrusted miners need to have verified a transaction before confirmation, which makes it longer. Because of the security features of DPOS, this is skipped, reducing confirmation time. This also allows for more transactions to be processed.
Though centralization is still possible in a DPOS environment, it can be controlled. This is because participants in the system can decide to vote to have a block processed by another person. This ensures that all processing is not concentrated in the hands of specific people.
Being in control
The result of DPOS mining is that shareholders remain in control. Voting can be flawed, but it is the most viable way to keep the system decentralized. Shareholders of the BitShares network are the only ones that can vote; however, only those who gain 1% of the votes can be part of the board.
This board is the entity that processes the blocks. Board members are paid a small token to make it worth their time ensuring uptime and an incentive to campaign. They also need to post a small bond equal to 100x the average pay they receive for producing a single block. To profit from being a miner of Bitshares, they must have greater than 99% uptime.
Bitshares mining sounds complicated, but it is still one of the fairer options for blockchain mining out there.
