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byInvictus Innovations, Inc.Soon, the first round of BitShares (BTS) will be issued to holders of BitShares PTS (originally known as ProtoShares). For those who may not be familiar, BitShares PTS was first launched by Invictus Innovations on November 5th, 2013 with the promise of providing the PTS holders at least 10% of every future Decentralized Autonomous Company (DAC) created by Invictus Innovations. This March, Invictus will be releasing our much anticipated first DAC, a decentralized Bank and Exchange we call BitShares X . BitShares X offers the first crypto-currencies that are market-pegged to the Dollar, gold, silver, or Bitcoin and facilitates a peer-to-peer exchange among families of such assets on a single block chain. On the last block found in February 2014, Invictus will take a snapshot of everyone's balance of PTS and award them about 1.33 BTS per PTS they hold at that time. These BTS will be made available to their new owners in March by importing their Bitcoin and PTS wallets into a new BitShares X wallet they can download. This snapshot date was first announced at the North American Bitcoin Conference in Miami, FL in late January. Since that announcement, the price of PTS has doubled; however, this rapid increase prior to the snapshot will likely be followed by a corresponding selloff after the snapshot as PTS will no longer be good for a cut in future BitShares X chains. Holders of BitShares will assume that privilege. The effect on the price of PTS should be very similar to a corporate spinoff. One moment holders will have only PTS, and the next moment they will havePTS and BTS. Since value does not simply emerge from the ether, the value of the combination of PTS and BTS should be about the same as the value of the PTS alone before the BTS were issued. This means that the price of PTS could be about to drop like a bowl of petunias in midair. Or not. Either way...Think of dividends. One minute you have a share worth $100, and the next minute you have a $5 dividend and a share worth $95. Sure, the share price dropped, but you have $5 to make up for it. Then the share value starts to climb toward the next dividend date. Although PTS prices often get quoted with the prices of altcoins, a PTS is a claim onBitShares of numerous DACs planned by Invictus Innovations, rather than an empty token backed by speculation alone. When calculating the performance of your PTS investment, you have to include the value of all the spun-off DACs that you now also own. Think of PTS as shares of a distributed autonomous company (DAC) that is in the business of incubating new DACs. The PTS have value, because people expect the future DACs to have value. This is the same as why shares of Apple, Google, or Microsoft have value. People expect that future products from these companies will have value and generate profits. These profits can be paid out as dividends, or they can be rolled back into the company to fuel future growth. Either way, the shareholders have claims on the wealth created. (The same applies to a spinoff. If Google executives set up a new company to take over one of Google's internal product lines, and then distributed the shares to Google shareholders, Google shares would lose some value, but shareholders would have shares in the new company to make up for it.) Invictus has many future DACs on ourroadmap that we believe also represent billion dollar ideas. For example:BitShares DNS is a new approach to Namecoin that has many significant advantages. For starters it is based upon Proof-of-Stake and eliminates the price fixing of domain names. Instead all domain names are sold at auction with the proceeds being paid to those who hold a stake in BitShares DNS. By eliminating price fixing and paying the profits from the sale of names to the shareholders, BitShares DNS should eliminate the vast majority of domain squatting by making it more profitable to hold Domain Shares and get a cut of all domains than to give up your Domain Shares hoping to sell the one name you have purchased. BitShares DNS will eventually be integrated with Keyhotee to provide seamless access to websites based upon the naming system. Access that cannot be shut down by decree.BitShares Music hopes to transform the music industry by changing the paradigm from selling copies of songs to selling shares of songs. Music fans can then profit by buying a stake in songs prior to them becoming popular and then sharing the song with everyone they know. This block chain would be paired with a decentralized radio powered by a jukebox style system where music fans can control what song plays next by spending money on the song and potentially making a dedication. The proceeds from the jukebox are paid to the shareholders of the song. Invictus is partnering with others to provide a seamless web interface that includes a streaming radio station powered by the jukebox.Leveraging the power of Keyhotee ID and Zerocoin, Invictus has designs for a next generation voting system that is entirely transparent, secure, and anonymous yet allows users to change their vote at any time. Such a system will enable parallel elections in countries where the official votes cannot be trusted and completely replace the ‘scientific’ polls used to bias public opinion.Imagine the potential of using the robotic integrity of unmanned companies to implement incorruptibly honest internet gaming venues. The rules and odds would be open for inspection just like the open source software behind Bitcoin. There would no longer be a need for government supervision, so such companies might operate many places where they are now strictly regulated or forbidden. Think of how many such companies might be launched and the total profits they might earn. PTS owners could wind up with shares in every such company that honors the BitShares Social Consensus Some of these systems may take a while to develop and mature, but they all have one thing in common that sets them apart from every other crypto-system out there:

They earn a profit.

It is hoped that eventually so many DAC projects are in the pipeline that each represents a small fraction of the total, and the steps down are negligible. Meanwhile, each saw-tooth ramp in the value of PTS reflects the market's growing understanding and confidence as the next DAC on the horizon is developed (and critiqued) in full public view at bitsharestalk.org. This provides a full spectrum of entry points to suit the risk vs. reward preferences of all investors.

Caution: Withdraw your PTS from exchanges and mining pools prior to February 28th because you must control the private keys to claim your shares in BitShares X. If you leave your PTS in the exchanges on the 28th then the Exchange will get to keep your stake in BitShares X and most exchanges are not willing to give you the dividend your account earned.

As the expectation of future value grows, the value of PTS should grow. When the value is paid out as shares of the expected DAC, it no longer is expected, and the PTS value should take a step down that is close to the value of the DAC that was just issued. PTS is like a capacitor that stores up the market's percieved value of all future DACs until some of that value is spun off with each DAC that is released. Thus, the best time to capture PTS is at the beginning of each recharge cycle - just after a big DAC has been launched. BitShares X is a very big family of DACs which should create such an opportunity for investors when it spins off on February 28th.How far the expected PTS price drop will be remains to be seen. It depends on what PTS holders believe about the future prospects of the BitShares system. If the price drops a lot, then that means that they believe that the BitShares X is pretty much all there is to Invictus right now. If the price drops only a little, then that means that they believe that Invictus still has a lot of tricks up its sleeve. Our best guess is that the new price should fall somewhere between 0% and 100%. Of course, there are some who are expected to sell their PTS as soon as they've captured their new DAC shares with a plan to buy them back just before another DAC is ready for release. This popular investment strategy is known as selling low and buying high.

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