BitShares Rebranding Signals New Communication Strategy
Pioneering crypto 2.0 project BitShares is rebranding its website in a bid to encourage merchants and consumers to use its decentralized exchange.
One of the earliest and most ambitious projects in the digital currency ecosystem, BitShares has sometimes struggled to communicate its message even to bitcoin’s relatively niche community of enthusiasts.
Take for example the introduction needed for the project itself and what it hopes will become its signature product, the BitShares decentralized exchange.
Formerly operated by Invictus Innovations, the BitShares exchange is a product of BitShares X, a decentralised autonomous company (DAC) that specializes in the creation of BitAssets like BitUSD and BitCNY that are pegged to the BitShares blockchain. Both are digital assets and are backed by enough shares of the company (BTSX) to equal $1 or ¥1, or say the price of gold.
Given this explanation it may be no surprise that the BitShares Wiki’s ‘Explain Like I’m Five’ section scores about a 56 on the Flesch-Kincaid Reading Ease score, putting it on about a 12-year-old’s reading level.
If its message sounds a bit complicated, project leader Daniel Larimer is at least aware of this. That’s why at the start of 2015, he’s seeking to reintroduce his brand to the community and wider public through a newly launched website that positions its combined solutions as ones that can offer real savings to businesses and consumers.
The goal of BitShares, he explained, is to become a full e-commerce platform that allows merchants and customers to trade within a larger ecosystem, one that today brings added costs every time consumers perform a key service with a different provider.
Larimer told CoinDesk:
Larimer is confident the company can send out a new message, especially as he believes the market is now waking up to the limitations bitcoin may face seeking to achieve its full potential.
“If you want to trade bitcoin, our exchange is where it’s at,” Larimer said. “A merchant will be able to accept payment in 10 seconds without having to have a Coinbase or a BitPay, and they’ll earn interest in BitUSD until they decide to cash out."
Eliminating counterparty risk
The key difference between BitShares and more well-touted alternatives, according to Larimer, is that BitShares uses collateral, the shares of its own DAC, to back the assets on its exchange. He argues this means that this value can be reclaimed under a wider range of conditions.
Larimer said that the BTSX shares operate in a different way to Ripple’s native tokens, XRP, comparing them to IOUs or promises that Ripple or its competitors will deliver the value when a redemption is requested.
By removing this risk, Larimer contends that this adds up to a system that perhaps shares more in common with bitcoin’s original vision than other alternatives, which he argues serve as unnecessary third parties.
“If the company dies or the people running it disappears, the token is worthless,” Larmier said. “With BitUSD, the collateral behind is not controlled by any one person, it cannot be seized, there is no private key that can be compromised, no bank account that can be robbed.”
Further, Larimer said, those who hold a BitAsset like BitUSD receive interest for doing so, a benefit for holding BTSX and exposing oneself to that market risk.
Of course, should a company like Ripple cease to operate, its token is still an open-source digital currency, meaning the token would need to be continued by the market, which may no longer have an incentive to do so.
Message sinking in
In this light, Larimer considers BitShares most in line with the original goals of bitcoin, to create a self-propagating network, though he argues BitShares is built to be self-funding and self-governing.
By design, BitShares is a DAC, a term coined by Larimer that means a set of business rules that govern the company running on a blockchain. The shareholders are, in turn, those who own BTSX shares.
Still, while Larimer believes in bitcoin’s underlying ethos, he’s been an outspoken critic of the network, critiquing its proof-of-work mining network and likening it to an unprofitable company.
Larimer suggests that recent news has provided validation for his views.
“It seems like it’s finally sunk in with the bitcoin price decline, and the miners turning off. People are realizing, ‘Hey, mining is actually an expense,’” Larimer said.
Larimer’s remarks also hinted at the growing public enthusiasm for blockchain technologies, and the simultaneous rise in complaints about bitcoin’s mining network in the media.
Market interest on the way
As for why BitShares technology hasn’t translated into partnerships with businesses in the ecosystem, Larimer argued that alternatives haven’t been widely adopted either, and that supporting any crypto 2.0 protocol is a tall development task for startups.
“We’ve talked to everyone from Coinbase to Bitstamp to BitPay, half a dozen others, and they all want to integrate with us, it’s just a schedule priority issue,” Larimer said.
As for whether BitShares has succeeded where he believes bitcoin is failing, Larimer said that BitShares is right now generating enough revenue to pay for development via inflation.
“If you actually look at our share supply, it’s gone down from it’s all-time high, so we are profitable in that sense,” he said.
Looking at the year ahead, BitShares plans to focus on launching products like BitGold and BitSilver while releasing a light wallet that Larimer believes is a game-changer for 2.0 that will help his project succeed on its vision.
Still, he believes 2015 will be a turbulent year, one that separates strong ideas from the weak.
“I suspect that by the end of 2015, there’s going to be three major players, bitcoin, Ripple and us, as far as blockchain technologies go,” he said.
Schoolroom image via Shutterstock
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