Guides to Decentralized Cryptocurrency Exchanges
4. BitShares Trading Platform
Bitshares is a blockchain-based decentralized cryptocurrency real-time exchange and was developed using Graphene, an open source blockchain technology written in C++ language, and Delegated Proof of Stake (DPoS) consensus mechanism. It operates with cryptocurrency stablecoins, bitUSD (pegged to US dollars) and bitCNY (pegged to Chinese Yuan), designed to track prices of real-world assets.
On June 2013, Daniel Larimer found a way to create a bitcoin and fiat currency exchange without the need of fiat deposits, this was achieved by launching a cryptocurrency token that is backed by another cryptocurrency token on the same blockchain. Larimer shared his new idea to Charles Hoskinson, the co-founder of Ethereum and few months later, they presented the BitShares concept together at the Atlanta Bitcoin Conference.
BitShares PTS (ProtoShares) tokens were created for early backers to get involved either by mining or trading. PTS token was a bitcoin clone, planned to be upgraded eventually to Bitshares. Its first block was mined on November 2013. Only 5 weeks later, Daniel Larimer realized that the mining concept was flawed and that it will lead to centralization in countries with cheap electricity. On around 1st of December 2013, he announced that all his projects will use the Proof of Stake protocol instead of Proof of Work mining but changed his mind again 1 week later to invent and introduce a new consensus mechanism for BitShares platform, the Delegated Proof of Stake (DPoS) protocol.
As a decentralized cryptocurrency exchange, BitShares is better protected than other centralized cryptocurrency exchanges. When a centralized cryptocurrency exchange is compromised or encountered outages, thousands of users and cryptocurrency balances worth many millions will all be impacted at once. But a decentralized exchange with redundancies everywhere in the world will have minimal disruption. A successful attack will probably affect only a single user and fund.