BitShares wallet: review

Thursday 01 October 2015

Whilst I’m not yet convinced about BitShares’ tech, I quite like their wallet. Which is a start.

I’ve recently had reason to try out BitShares’ wallet. It’s not bad from a UX point of view, though I have some concerns about other aspects of the ecosystem. I won’t go so far as to say it’s a triumph of style over substance, but it leaves me with questions.

Read also: The hidden uncertainty of Ethereum as a currency 

I was prompted to take a look at BTS when someone offered to send me a few dollars in the currency to get me started in the platform. Can’t say fairer than that, I thought. Since it was a small amount I went for the web wallet, which makes it super-easy to get set up. It’s a lot like Counterparty’s webwallet, if you’ve used that. Head on over to https://wallet.bitshares.org/ and you’ll be able to create and access a new wallet with the minimum of fuss. It works on a brainwallet system, which means you’ll be given a string of 12 randomly-generated words when you open a new wallet. This is your private key: keep it somewhere safe. If you lose it, your BTS are gone forever.

A neat secondary feature is that you can select a password to use on a trusted computer. You can set the computer to remember your passphrase/account, which you then access simply by this password - which is much more convenient and means you don’t have to type in your 12 words every time. Clear your browser cache, though, and you’ll need the passphrase again.

Another nice feature is that you’ll have to register a name for your account before you do much else. Until then, your account will be identified with your public key. Registration will take 0.5 BTS, which you can get from a faucet - though you’ll have to provide some form of social media id to prevent the faucet being drained. If you don’t like that, you can send the funds from an exchange.

BitShares turns out to be a fast system with a nice, clean interface that’s reasonably intuitive, if not perfect. I’m ignoring the tab about Delegates, which play a role in their Delegated Proof of Stake (DPoS) consensus method. That’s going to have to be for another time.

Liquidity

Liquidity. You either got it or you don't. And BitShares don't.

Now, the bits I don’t like.

One of the supposed strengths of BitShares is that it enables you to invest in ‘pegged’ assets and currencies like BITUSD, BITCNY, etc. I’ve written in the past that I’m somewhat concerned about how it will work out in practice; as I’ve stated, ‘it makes me a little uneasy that the apparent solution to crypto’s extreme volatility is vulnerable to, well, extreme volatility.’ 

It turns out there’s a bit more to the shortcomings of the pegging system. I clicked my way over to the exchange and found I could buy BITUSD and a range of other pegged currencies very easily. However, what I didn’t realise was that you have to buy these from someone in exchange for BitShares, and that buyers and sellers set the rates. Perhaps it should have been obvious, I don’t know.

Now, if I’m buying an asset pegged to $1, I want to pay $1 for it. That’s the whole point of the exercise. I don’t mind paying the spread, perhaps 1% if necessary, but when the supply is low - on BITUSD, which should be a flagship currency - and the spread is more like 7%, and that’s just on the first $5 on the orderbooks, then I’m thinking there is very little advantage over a centralised exchange that might theoretically have greater risks but a whole heck of a lot better liquidity.

Hopefully, if BitShares takes off properly, more people will trade on the platform itself and this won’t be an issue. Until then, unfortunately, it’s just not worth the trouble, which is sad given that the UX is so good.


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