FAQ

What is BitShares?
BitShares are shares in purely digital, profitable companies traded over the internet. Purely digital companies are different in that they have no offices, no employees, and run the computers of their customers. The advantage is that they provide higher quality services than traditional businesses and the profits are passed on to the customers.

Invictus Innovations views Bitcoin as a cryptoequity where the Bitcoins are the shares, the miners are the employees, and the revenues are from the transaction fees. In the case of Bitcoin, the salaries paid to miners are greater than the revenue. To make up the difference the shareholders have to be diluted by 12% per year, every year.

What if this were a real business?

If Bitcoin were a regular business it would go out of business because it is not making a profit.

How do you explain the stock price?

Bitcoin price is going up because new money is coming in. Take for example, Twitter (as of the date this was written), who still has not turned a profit. Unlike Twitter, we know Bitcoin can't turn a profit because it can't change it's business model. Twitter can.

How do you make Bitcoin profitable?
Do what any good CEO would do. Minimize expenses and maximize profits. If we can end mining we can make it profitable.

How can you end mining?
If you are going to end mining you have to replace it with something. We are going to end mining by using consensus and proof of stake. It is commonly thought that mining the blockchain gives us security and decentralization.

How do you achieve consensus?
BitShares determines who gets to produce the next block by using a Ripple-style consensus algorithm.
 * Mining is centralized one block at a time. Ripple style consensus is not even centralized on a single block.
 * You could look at Bitcoin mining and once you see that 5 people control 85% of the hash power, you are ultimately trusting those 5 people. Why not replace the hashing power of those 5 people with the digital (cryptographic) signature of those 5 individuals? It would be better if you increase is to 100 individuals or more and save $1,000,000,000 per year in mining costs.

How do you make the blockchain immutable so not even those 5 individuals can change it?


 * Proof of stake: At any time someone makes a transaction on the network, they are securing the network and certifying the state of the chain. The only way to change the transaction history is to hold 51% of the shares as well as have the majority of the digital signatures.
 * You can attack the network of Bitcoin with just 5% of the market cap (money supply). With 5% of the money supply you can buy the hash power to amount to over 51% of the hash power on the network.
 * Bitcoin has the potential of a doublespend and getting away with it because all that is required is 51% of the hash power. You have to be anonymous and produce a blockchain in secret. With BitShares it is impossible to create an alternative chain (transaction history) anonymously because a digital signature will be on every block of transactions.

What are the benefits of ending mining cryptocurrency?

 * 1) More security than Bitcoin
 * 2) As fast (or faster) than Ripple consensus

How are BitShares different than stocks?
BitShares are traded person to person with no broker's fees and no middlemen instead of on a stock exchange. Again, savings are passed on to the customers.

What can a BitShares company do?
Anything! From banking, to insurance, to gaming!

What is the ultimate form of decentralization?
The free market.

What is the cornerstone of the free market?
Competition.

What limits competition?
Barriers to entry. If barriers to entry limit competition it means they are the cause of centralization.

How do we maximize decentralization?
Removing barriers to entry. Mining is a barrier to entry. Hashpower is now consolidated among those with the most resources to compute hashes. Once you control a majority of the hash power you can no longer fork (create) competitors off of the same proof of work. Once someone has the hardware resources to control a (blockchain on a proof of work that can be mined with a) CPU coin, no competitors can enter. It is like a democracy, you trade one tyrant for a thousand.

What is Invictus?
Invictus Innovations Inc. is an open source software development company based in Blacksburg, VA specializing in decentralized solutions to centralized problems.