This is an IMPORTANT LESSON for anyone who has always used centralized exchanges.
If you have ever heard of Bittrex or Poloniex, Cryptopia, or even Coinbase... you probably heard they are cryptocurrency exchanges that allow you to buy and sell cryptocoins on them.
When bloggers earn STEEM or SBD, a lot of times, they will transfer these coins to a centralized exchange to sell them on the open market for Bitcoin, or any other coin they'd like to invest in.
Centralized exchanges usually start up initially, requiring no account verification and a very high withdrawal rate. Until they get wealthy and popular enough. Then they can afford the legal fees and licensing fees to register as an MSB (Money Service Business).
OH NO! My favorite exchange just changed the rules on me! HEY!
...and....
....that's when a centralized exchange will start implementing new verification requirements for accounts. Soon they will lower the amount you can withdrawal (sometimes to ZERO) until you obey their new rules.
It seems everytime this happens, when one centralized exchange starts implementing new rules, everyone moves over to the next newly launched exchange that doesn't have them.
(..and the cycle repeats. The new exchange gets big, they too change the rules, and another new exchange opens again)
But there is a worse problem with centralized exchanges
...
When centralized exchanges get hacked, mismanaged, shutdown and disappear (like Mt. Gox, Cryptsy, or BTC-E) they take your deposited funds with them.
There is also a different problem, called "front running" that can happen on centralized exchanges. You never know if the prices you're seeing are 100% accurate. You don't know if the exchange is fibbing the numbers when you start filling out your sell bid. This isn't as common, but it can still happen. It can happen, because when was the last time you heard the exchange software and servers were audited? You never really know, do you?
Who runs Bitshares?
Dan Larimer, the same guy who started STEEM, the blockchain, had a first project named Bitshares which is a decentralized exchange. The owners and operators of the exchange are everybody, and anyone. It's like a self sufficient decentralized corporation. It has its own governance too.
To be clear, Dan Larimer isn't in control of Bitshares today. The people who use it are...
Just like steem has witnesses that earn their position. Bitshares has witnesses that earn theirs as well.
By owning Bitshares, you automatically become a stakeholder. But it's different. You DO NOT get paid dividends. So all those new rules about ICO's, and dividends, money from a 3rd party you've hearing in the news lately, does not apply to Bitshares.
Now, it is true, earning dividends and participating in an ICO "could" apply to certain tradeable tokens on Bitshares, But more often than not, people are trading SBD, STEEM, EOS, USD, BITCOIN, ETH, DASH, and many other same coins that centralized exchanges carry too...
So how is using the Bitshares Decentralized Exchange better?
There are so many great points, I'll stick to the most obvious, and most important ones:
When you deposit an order to BUY or SELL coins, you keep your account private key which signs those transactions. This means every transaction you make, your private key stays on your computer at all times! This is the only way to transfer, buy, or sell from your wallet. This means in order to hack Bitshares, you would have to hack each individual user, because there is no centralized database of accounts. There is no centralized coin wallets for all accounts either.
The rules of the way things work, do not change, unless the majority of Bitshares holders want them to... That means we all get to have a virtual seat at their board of director meetings. Everything gets proposed and either voted (or not-voted in) before something happens. This means there are no mornings you wake up, and go "what? I've been locked out of my account on the centralized exchange because of some new regulation or new policy?" -- that does not happen on Bitshares!
Bitshares currently uses the same "Graphene" technology that STEEM runs on. You can pretty feel confident about how fast that is... and how many transactions per second it can handle.
Bitshares is currently a very good buy right now. It was 0.0038 cents / USD Jan 10, 2017. It was 0.166 cents /USD Dec 10, 2017. It was 0.56 cents/USD on Jan 10, 2018
Now if Bitshares (BTS) was less than 1 cent a year ago, and it is currently 57 cents as of Jan 10th 2018.. What do you think will happen over the next year?
This isn't investment advice. It's just my predictions, your opinions may vary.
So, you're probably wondering... How can I try out Bitshares for FREE?
...
My next few posts will talk about it a bit more.... But if you're an eager person who can't wait. Obviously you can spend the next couple hours reading as much as you can about Bitshares, watch some Youtube videos, and learn what you can.
For now, you can create a free wallet by going to my affiliate link here:
On the screen it will present two options:
CREATE NEW ACCOUNT or LOGIN
You want to create a new account. Choose a name that has-a-dash-in-it, since it is your first account. (premium names cost BTS to create)
NOTE: I would recommend using a different username than your steem username to stay anonymous on the Bitshares DEX
- Next, you want to use the WALLET MODEL to create the account. This will allow you to create a "bin" file, which is a file like bts_default_20180112.bin which is your actual wallet protected by a passphrase that you select.
It will say that this wallet has never been backed up. Choose "BACKUP NOW" and then push "DOWNLOAD"
Now you still could use this Browser Wallet your logged into (which I don't like)
- ...but by downloading that "BIN" file you can stop using your browser in a second (keep reading)
Before you do anything next, on the browser screen, push SETTINGS, then push BACKUP
For type of backup, choose the dropdown and select "BRAIN KEY"
(You may have to re-enter the password you initially chose)
Some words will come across the screen, like:
said you forever rabbit frog dumpy pen typewriter pencil hot mouse tiger bear walk
Write these words down on a piece of paper. DO NOT SAVE THEM ON YOUR COMPUTER.
Label this piece of paper at the top:
BITSHARES BRAIN KEY WALLET RECOVERY
Bitshares username: (the username you chose)
Bitshares wallet passphrase (the password you chose)
(and all of those BRAIN KEY words, exactly written in order they are shown)
This paper now goes into your underwear drawer, your jewellery box, or your safety-deposit box at your bank.
After this, in order to open your new wallet, you go here to download the software:
https://bitshares.org/download/
- There is a client for Windows, Mac, and Linux.
Once you start your Lite wallet, you can then "restore an existing account" by loading that .bin file you saved when you created your account. Enter your passphrase, and you're in...
What should you do next? JUST LOOK AROUND. Remember, you didn't pay a single penny yet for anything, and now you have a bitshares wallet, you can see the dex. It looks complex at first, but that is only because bitshares is so powerful and has so many options and features.
If it is overwhelming at what you're looking at... don't panic. My upcoming tutorials will help you.
Note: Do not waste too much time, create a Bitshares wallet as soon as you are ready. I do not recommend you start trading with it though, until we can confirm you can fully delete the software and recover the exact same account again.
...I'll be explaining that important step on Friday Jan 19/2018
Really good info , I trade on bts once in a while , It can be a bit confusing at times ,, I think it will only get better ..
I found this too in the beginning, until I realized how it worked and then I started to get really excited.
Bittrex pulled a shady move when they changed their rules overnight without warning
What rules did they change?
You can read about it here:
https://themerkle.com/bittrex-locks-freezes-withdrawals-for-thousands/
This is exactly what I’ve been looking for!
Thank you for your information.I think it's very important for all steemians.Can I translate such a good content into Chinese and share it with our friends in the Chinese community? I will mark the original author and the source of the article in the translation article.But I have to ask your approval first.
Yes, but the affiliate link (to create an account) must stay the same.
OK,I will. Thank you
I am ready and I will create the account today. Thanks for the information and would be looking forward to new updates from you.
I like it!
I just don't understand why the BitShares DEX has sush a low daily volume...
Volume is less important when it still holds the same prices as the main exchanges. Infact there are arbitrage opportunities too. So the lower daily volume can actually help spot trends where things are going between the two. This could be an advantage instead of a disadvantage.
As far as the low volume you're talking about... it is true, there are less bots on the dex buying/selling to themselves. You have a huge number of bots using the main exchanges api which shows an inflated volume. But if 80% of all transactions are bots buying/selling to themselves on the main exchange as marketmaker bots... how does that volume help the average trader?
A: It doesn't. Those same marketmaker bots can play havok by deliberately forcing a coin down or up at will.. especially once they realize the bulk of the volume is their own bots trading and no one elses. (Which is possible to discover and a bit of artificial intelligence).
You have to put it into perspective when you consider whether or not a bit of lower volume is a problem, or a bonus in this particular case. In this case, it is a bonus to me.
I coulnt agree more!
How about all these new coins (just top 100) that I cant find on the DEX, why arnt these added?
The coin developers themselves have to work to get them added. When you first create a wallet on openledger, at the bottom of the page it says "Add Coin", which allows any coin developer to fill out the information and get their coin added.
It is important for every gateway provider on the dex, to have a direct dialog with coin developers so if issues arise, they get ahold of the coin developers ASAP.
If coin developers haven't bothered with the dex, than the onus is on the coin developer themselves. But this doesn't matter, the dex still carries plenty of options. SMOKE for example, isn't even listed on coinmarketcap.com but it's a tradeable token with over 500,000 facebook users coming to EOS soon. So you could equally ask, why are there things on the DEX but not coinmarketcap.com either?
We don't live in a perfect world.. so we have to work with what we have.
Learned some new things from you today, thanks!
Bitshares will become very popular once some of the larger governments get nasty with their regulatory efforts to crack down on crypto users.
Good one but time has come for a universal decentralized exchange and universal wallet. Long Ethos :-)
I setup an account long ago, but am still trying to move all my coins over to it now. Bitshares keeps on getting better all the time. In the beginning the volume was low but finally one is able to do some trading. Thanks for the tutorial it'll help all the people I'm trying to get signed up.
Thank you for the detailed information and simplifying it for the lay person. I'm highly interested in Dan Larimer's work and bitshares is the one project of his I know the least about. I'll be learning, following, and sharing. Thank you again.
Took me a few minutes but I have it set up. Looking forward to your next tutorials!
Damnn this is a great posts. Didn't know bitshares was used for this just never looked into it. Thanks alott u got a followerr
Nice. Thanks for this explanation. I made an account last year, but I kinda feel a little lost with what I'm doing at the moment. I eagerly await the next post in this series. :)
Good post im a big fan of bitshares but i keep tearing my hair out why people fall for all these new fancy websites promising the moon and how they are going to solve the scaling problem and how there more decentralized etc. Bitshares has been round for 4 years its tested proven fast yet people dump 20 billion into Cardano. For this reason alone i think it will take a while for bitshares to really take off. I strongly believe for BTS to really take off they need to implement a solid withdraw- deposit method for fiat . and then spend a bit on promotion
Well they do have bridges and gateways that can deliver you Bitcoin or Litecoin quite easily. From there, you can move to fiat from Bitcoin through the Bitcoin ATM or localbitcoins person of your choice.
Once you hold Bitcoin, there are many ways to turn that back into dollars.
Bitshares is going to explode in 2018. Decentralized exchanges are going to be huge this year and Bitshares is ahead of the game. Also they seem to be doing a UI overhaul.. I am way too excited about this coin!
I am so lost in this cryptocurrency world, but here is a stupid question: with bitshares wallet, I can move SBD to it and exchange for USD?
I will re-steem and re-read and re-read until I have enough confident and understanding first..
I started typing this long reply about how to do it.. then I wanted to post some images to show you.
...then I realized... why am I doing this?
I fully plan to show how to move STEEM / SBD to and from the DEX along with Bitcoin, etc... in the coming tutorials, so it would be better just to say wait for it... so everyone else can benefit too. :)
Are you testing to see if we read all the way down the page ;-)
...sent to your new wallet on Tues Jan 15/2018
This is great though - we have to keep this push to get people off the centralized exchanges and over to the DEX.
No. I hate it when I miss a day on Steem as a curator, only to find out some big contest or giveaway happened the day before.
This accomplishes 3 things:
....so waiting a day is the responsible (and nice) thing to do for everyone in the end.
I agree with all the points. I meant Tuesday is the 16th, not the 15th :-p
thanx for information I never know before that this exchange do exist I will start using bitshares instead of poloneix and bittrex.
Not yet. It's too early to make that decision. I would continue to use your regular exchange until you feel confident enough on this one.
For now, use both. Some coins aren't on Bitshares that are on the centralized exchange. I use both, but I just use Bitshares more often.
Thanks so much for the great information @intelliguy ! i have no experience in crypto at all and still find it complicated just selling on bittrex and then sending to Quadriga to sell and send to my bank lol!! i just started learning the internet form my sons when I joined steemit 18 months ago ! But im upvoting and resteeming for those that have the experience and savvy / know how about these things , its just way to complicated for me , but it sounds great !! Keep up the great work , and sharing awesome information here on Steemit !!😀👍👍👍✌👌💲💲💲
Thanks @karenmckersie !! I appreciate the re-steem for sure. :)
Bitshares dex is so powerful.
Oh my God, I didn't know this information about centralized exchanges... Now you put me on alert my friend @intelliguy. I've been using bittrex since I joined Steemit, about 7 months ago....
Thank you so much for this information, really. Keep up the good work you've been doing, buddy. A hug and greeting from Venezuela :)
I was very happy with the way Bittrex worked too. It's a nice exchange. Until one day I logged in and my funds were locked and they had a new policy. I sent a support request and said, can I stop trading but at least get my funds out? They said "NO! You must do what we say by the new policy otherwise your coins will stay locked and you cannot withdrawal them"
That isn't right. I won't trust them again.
Just made a bitshares acct. I am interested in learning about and performing margin trades- eos:)
Looking forward to the next part. Thanks for the post.
So this is bitshares. I am currently using bittrex. And I am planning now to move to bitshares. Thanks for this @intelliguy.
As I mentioned to someone else... get familiar with Bitshares and get confident using it first before moving a lot of coins with it. It takes a bit to get use to it in the beginning.
(ie: do some small tests and get use to it first)
The more you use it, the easier it gets... so spend some time and you will learn to really love it.
Thank you for the help, will surely do testing..
Bitshares is great, I use it a lot and will keep on using it until the EOS DEX is ready for use.
When EOS gets its DEX ready, Bitshares will probably start to fade. What do you think?
What makes you think that BTS won't be ported to EOS or at least fully compatible with any dex running on EOS? Remember, Dan created both systems.
Dan would have to be a complete idiot to ignore Bitshares and let it fade. I don't think he's a complete idiot. BTS can help EOS and I think Dan knows that. (and EOS can help BTS too)
As long as my BTS get converted to EOS in that case everything is smooth sailing. Im Holding BTS too - I'm a Larimer triad supporter.
thank you for sharing this new.you just helped a novice.God bless.
Obviously, I still have a lot to learn one this platform.
Thanks @intelliguy for sharing this info.
Does it also allow fiat trading?
very good article, I am also a big fan of bitshares and have even paid for a lifetime membership but I would like to see that you at least tell people what goes on with the affiliate link (just for complete transparency)
@intelliguy, I have not fully understood what bitshares is all about. It looks too complex
It looks complex. Like everything new does (including steemit). You only learn by taking baby steps. This article is the first baby steps to create an account and look at it.
Then put it away for a day... and come back Tuesday to find out more.
I will really be interested in pertispating to this have been hereing off bitshares ,it like Bitcoin right , will i have to open bitshares wallet account,before some one can pertispating to this offer?
Yes
Thank you for your information. i will pay attention
You found great news and to share with us
Thanks for the info. This was really helpful
Thanks for that... managed to get it all set up
Hey, sorry if it has been asked before, but how do I deposit Gridcoin on Bitshares. Seems gateway from Openledger is the only way, but it is always down. Is there another way?
Quick question, I got wallet doing different order, I downloaded Lite wallet file to Linux computer and continue from there (I think) installed it first and then set up password. Actually to be honest, can't recall, senior moments... hence a question:
How can I now, afterward, figure out if I have local wallet/account or online? I don't mind creating new one following your steps, and I just may, but i'm still curious. ;-)
Ahh, and thanks for your tutorials, I'm looking forward for the ones still coming. And I will probably have a question or two in the future :-)
very useful, maybe this is an opportunity for us and to start it
oh this sounds much better than bittrex. Why do people not do this as on coinmarketcap I see there is barely any SBD being traded while bittrex although not at the top is still in the $10+ millions?
This is a very good read
I will have to g back one of these days to check this post in detail. I have an account with Bitshares but I find it very difficult to maneuver.
one of the firstwallet things I did when I foundmade crypto was get a openledger. nice post! bts-krokus