What are 'witnesses'? Care to explain or point me to a link explaining it? I'm intruiged.
Witnesses is "Bitshares 2.0" speak for what was called Delegates in "Bitshares 1.0". Instead of using PoW or PoS to include transactions in blocks (and therefore validating signatures and timestamping transactions), 101 witnesses are elected by stakeholder vote to do this job for Bitshares. In return, this provides many benefits for Bitshares stakeholders:
A. The costs to secure the blockchain are minimal compared to PoW and PoS coins that require highly inflationary methods to pay people to secure their chains.
B. It allows stakeholders to hire employees for marketing, developing, infrastructure development, user support, etc, and provides a way for them to be paid in a trust-less manner from transaction fees or inflation. The pay rate is set by the delegate and voters keep this in mind when selecting witnesses. A witness that stakeholders deem is doing something very important can set a higher pay rate that adds a small amount of inflation to the currency along with the transaction fees. Thus, allowing the blockchain to fund development of new features.
C. Witnesses publish price feeds for different assets (Bitcoin, Gold, Silver, etc.) which the decentralized market uses in its SmartAsset algorithm to make commodity/FIAT stable currencies via trust-less smart contracts.
D. Because it uses witnesses, dPoS is the most efficient consensus algorithm, which allows for more transactions per second and a quicker (while still being secure) transaction speed than any other cryptocurrency that exists today. The block time is currently set at 3 seconds, and that 3 second block time only requires one block to have a very low probability of the transaction being reversible. Most other coins require you to wait a few to a lot of minutes for multiple blocks to insure the transaction cannot be reversed with high probability. The block speed and transactions per second can further be reduced/increased to just 1 second or up to 100k transactions per second with the proper witness infrastructure (witnesses running high end servers with high bandwidth connections).
E. Witnesses can propose changes to the parameters of the blockchain, which are then reviewed by stakeholders during a 2 week review period. This allows Bitshares the flexibility to easily change transaction fees, block size, block speed, etc... whenever necessary in a democratic way.
F. Since stakeholders vote for witnesses (1 BTS = 1 vote), this allows all stakeholders (big and small) to participate in the governance of the blockchain. That is very unlike most cryptocurrencies a la Bitcoin where the centralized mining conglomerates are the ones that decide if and when changes are made.
I am probably forgetting something... I am obviously a dPoS fan boy and I think it is one of the best inventions in recent years in regards to cryptocurrency consensus algorithms.
More about dPoS and the efficiency of such here:
https://bitshares.org/technology/delegated-proof-of-stake-consensus/https://bitshares.org/technology/industrial-performance-and-scalability/https://bitshares.org/blog/2015/06/08/measuring-performance/More about all Bitshares 2.0 features here:
https://bitshares.org/technology/EDIT: I knew I was forgetting at least one thing... one very important feature of dPoS is that the rich do not inherently get richer like the other implementations of PoS. Everyone benefits equally from the destruction of transaction fees because everyone owns a larger percentage of the currency supply every time tokens are destroyed.
