- cypherpunks - lists.cpunks.org

Re: [Cryptography] Krugman blockchain currency skepticism
by grarpamp 05 Aug '18

05 Aug '18

On Tue, Jul 31, 2018 at 7:05 AM, William Allen Simpson <william.allen.simpson(a)gmail.com> wrote: > Krugman has a column today that's saying some things that have already > been posted here. Hopefully will gain traction. > > https://www.nytimes.com/2018/07/31/opinion/transaction-costs-and-tethers-wh… Hopefully not. "Why would you want to do [cryptocurrency]? What problem does it solve? I have yet to see a clear answer to that question. ... So that’s why I’m a crypto skeptic. Could I be wrong? Of course. But if you want to argue that I’m wrong, please answer the question, what problem does cryptocurrency solve? Don’t just try to shout down the skeptics with a mixture of technobabble and libertarian derp." Krugman article wouldn't stand a chance at any OG "libertarian" cryptocurrency conference. Because that's the very 'derp' behind cryptocurrency... the element needed to understand it. Freedom isn't derp. Anyone could tear that article apart, but you would censor it, so what's your point of even approving it here for comment? Propaganda Anti? Downplaying decentralized cryptocurrency to any cryptos here who might otherwise want to work on it? > You wrote "eight years". Could you correct that, too? Good point, nine years is closer to the ten year mark where cryptocurrrency's unstoppability and fundamental qualities begin to accelerate.global capitulation towards it. > http://www.metzdowd.com/pipermail/cryptography/2018-February/033917.html https://www.youtube.com/watch?v=tQQFA9YXCZ0 ;) https://www.youtube.com/results?search_query=bitcoin+documentary What's in your wallet? [bcc cypherpunks]

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This new Ethereum-based “assassination market” platform could cause Napster-size legal headaches MIT Technology Review Article
by jim bell 04 Aug '18

04 Aug '18

https://www.technologyreview.com/s/611757/this-new-ethereum-based-assassina… Connectivity This new Ethereum-based “assassination market” platform could cause Napster-size legal headaches Augur lets people bet on events and pays whoever gets it right—so of course they’re wagering on the deaths of Donald Trump and Jeff Bezos. * by Mike Orcutt * August 2, 2018 Augur, a new blockchain-based prediction market platform, is getting a lot of media attention because people are using it to predict the deaths of celebrities. But despite fears that the rise of “assassination markets” could inspire real killings, the more urgent problem Augur presents is something else entirely. 1. This piece first appeared in our twice-weekly newsletter Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here—it’s free! Really, people saw these sorts of “death pools” coming decades ago, and blockchains, with their decentralized networks and (potentially) anonymous transactions, serve as an ideal platform. Augur’s open-source software relies on blockchain-based computer programs called smart contracts to let users set up their own prediction markets that automatically pool cryptocurrency bets and distribute winnings without the need for participants to identify themselves. Perfect for ginning up interest in offing someone by guaranteeing a payday to whoever does the deed, at least in theory. Predictably, the protocol, which launched July 10, has already led to markets for forecasting the demise of Donald Trump, Jeff Bezos, Warren Buffett, Betty White, and others. But these markets have seen very few transactions, and the amounts wagered have been tiny, making it unlikely they’d inspire someone to engage in foul play. Nevertheless, Augur may already be facilitating illegal activity that could prove far more troublesome. In the US, prediction markets are generally not permitted. Federal and state laws prohibit online gambling, and “in many ways the line between prediction markets and gambling is not that clear,” says Aaron Wright, a professor at the Cardozo School of Law in New York City. Further, some Augur contracts allow users to bet on the future value of something, such as Ether cryptocurrency. That sounds a lot like a type of investment called a binary option, which is unlawful to list without approval from the Commodity Futures Trading Commission. In 2012, the CFTC sued Intrade, an Ireland-based prediction market, accusing it of permitting US users to trade binary options, and eventually a judge blocked Intrade from offering the contracts in the US. Sure enough, Augur already has the CFTC’s attention. But even if the agency decides that Augur is breaking the law, how will it enforce that decision? Augur’s creators claim they don’t have control over what its users choose to do with the protocol—or the ability to shut it down. This creates a problem that is “endemic” to blockchain technology, says Wright, who recently co-wrote a book on the subject: “If you do not have a very concrete intermediary—i.e., a company or group of people that are running the marketplace—how do you apply laws and prevent that activity from occurring?” When Napster, Limewire, and other peer-to-peer file-sharing networks started slinging music, movies, and other files around the internet two decades ago, they created similar law enforcement headaches. But in each case there was an entity that could be sued for copyright infringement. Software like Augur, which is open-source, freely downloadable, and run on a blockchain, presents genuinely new challenges, says Wright. That doesn’t mean laws can’t be applied—just that they’ll need to be applied in different ways. For instance, if officials were to rule that Augur was facilitating illicit activity, they might try to go after the people who developed the software, much as malware developers have been held liable for their creations, says Wright. That would be likely to set up a fight over First Amendment protections. Prosecutors could also try to target the users who keep the protocol running. Called “reporters,” they use Augur’s tradable crypto-token, REP, to report outcomes and are rewarded with more tokens if their reports are consistent with the larger consensus. There are potentially other avenues, as well, says Wright: “Just because there is no center doesn’t mean there aren’t indirect ways to attack lawless activity.” Keep up with the latest in blockchain at EmTech MIT. Discover where tech, business, and culture converge. September 11-14, 2018 MIT Media Lab

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Prediction Markets, 3D Guns, Decentralized Cryptocurrency, Anonymous Overlays...
by grarpamp 03 Aug '18

03 Aug '18

https://www.youtube.com/watch?v=6IJCFc_qkHw Damn it feels good to be a Gangsta !!!

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Inside Augur’s Assassination Prediction Market
by jim bell 03 Aug '18

03 Aug '18

https://btcmanager.com/inside-augurs-assassination-prediction-market/ Inside Augur’s Assassination Prediction Market July 28, 2018 7:00 by Priyeshu Garg Following months of background work and speculation, a decentralized prediction protocol built on the Ethereum blockchain has gone live. True to stereotypical internet culture, it is already hosting some extremely controversial content. Augur, the Ethereum-based prediction protocol which launched recently, permits users to create and bet on prediction markets for any real-world events with no censorship or centralized oversight whatsoever. The Back Story One of the significant hopes and wishes of the decentralization “movement,” which uses the Ethereum blockchain as its holy grail, has long been the ability to set up and respond to bets on any real-world activity whatsoever without the possibility of interference from a central authority. For a long time, this was merely theoretical until the non-profit, Forecast Foundation, decided to build such a decentralized protocol. The result was Augur, which launched on July 9 with a promise to completely and fundamentally change the nature of prediction markets. Now for the first time, the internet finally has what has been the subject of many a thread on Reddit and BitcoinTalk: a genuinely libertarian prediction market which has no restrictions whatsoever. Supporters claim that this is the next logical step in the ongoing decentralization of human communication and interaction. The logic goes: “If I can place a bet on the outcome of a sports game or an election, why shouldn’t I be able to place a bet on say, the identity of the next celebrity to check into drug rehab?” Mostly, if it is important enough to someone, they should be able to create a prediction market for it and stake actual money on it without any risk of interference from a central authority like a government. Augur does what it says on the tin; it genuinely has no restriction on what markets users can put up. Fancy betting on where the next major terrorist attack will take place? Where a natural disaster will occur? Whether the President of the United States will be assassinated this year? It’s all on Augur. The site says in its own words: > “Decentralized technology means decentralized control. No one person can single-handedly change Augur or shut it down.” To adopt a favorable position on a bet, users buy shares with ETH. To adopt a contrary opinion, users effectively short the bet by selling shares which will be redeemed for ETH if the user’s prediction turns out right. Assassination Markets The internet has a long and colorful history with this particular fantasy, stretching back notably to 2013 and the bizarre online marketplace set up to solicit donations in Bitcoin toward the assassination of then-US President Barack Obama and Treasury Secretary Ben Bernanke. While Augur does not actively play a role in such an endeavor, it must be noted that the platform effectively provides a way to incentivize such an act by rewarding winning bets with ETH, regardless of how subjectively tasteless or illegal the market may be. In other words, someone with the right mix of greed and sociopathy may decide to win a speculative bet on Donald Trump’s assassination by carrying out or facilitating the action in question. In such a case, the user gets their ETH profits, no questions asked. If that seems unlikely because the US President has a small army of security agents surrounding him, in addition to many other resources that the internet libertarian with a gun does not have, then consider the possibility that someone bets on say, a mass shooting prediction market on Augur. A shooter or facilitator would profit from such an event, and it would be next to impossible to trace them. This raises the very distinct possibility that Augur could well be the latest in a long line of crypto-linked crime facilitators, following in the lead of Silk Road. Indeed, the afore-mentioned Donald Trump assassination scenario is currently live and accepting bets on Augur. There exists, as of July 23, a created market on the topic, “Will Donald Trump (President of The USA) be killed at any point during 2018.” Worse still, the bet has a few people staking money for or against it. Augur insists that it can not only do nothing about it but hints that it would not even want to. An email statement from Augur provided to Mashable reads, “That market is still live,” along with a working link to the prediction market. Even worse, copycats are coming up with titles such as “Will DJT survive 2018,” also with ETH staked on an outcome. As if in anticipation of a scenario like this, the Forecast Foundation’s FAQ page reads: > “The Forecast Foundation has no power to censor, restrict, or curate markets, orders, trades, positions or resolutions on the Augur protocol contracts. The Forecast Foundation has no more control over the Augur protocol than anyone else using Ethereum.” There is currently no comment from Augur regarding what, if any, action can or will be taken to deal with markets like this that can have potentially disastrous effects. There is one bright spot in all of this, however. A “reporters” mechanism is built into Augur’s protocol which ensures that a certain class of users is given an incentive to truthfully report the outcome of an event, using the platform’s REP token. In theory, the presence of “reporters” should make it difficult or impossible to cash out a bet on Donald Trump’s assassination. Hopefully, with a bit of luck and REP tokens, we may avoid seeing the world’s first crypto-assassination.

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The Radical Potential Of Augur
by jim bell 03 Aug '18

03 Aug '18

https://medium.com/sunrise-over-the-merkle-trees/forecasting-kanyes-preside… Just-launched Augur is clumsy, slow, ugly. . . and potentially world-changing. As Augur co-founder Joey Krug put it, > we’re trying to stream HD videos in 1995. Due to scaling woes on Ethereum, Augur will likely remain sluggish and costly for a few years. Throw in the fact that on first glance, Augur looks like little more than a place to bet on the winner of the World Cup, and it’s tempting to shrug it off as a clunky, overhyped DApp. Don’t make this mistake. Augur could transform how we forecast the future, make decisions and manage risk in everyday life, fact-check and agree on the state of reality, and even hold politicians accountable. Someday, it may even be the world’s largest financial market. ELI5: What Is This thing? Augur has been called “Uber for Knowledge.” Like unused cars sitting idly around, we all have information or insights lying dormant in our brains. Like calling an Uber, creating markets on Augur recruits this idle information into action and transforms it into a shared resource. Augur is the world’s first decentralized prediction market (DPM).² If this sounds complicated and scary, you’re in the right place. I’m going to ELI5 (Explain Like I’m 5) exactly what a prediction market is and why you’d want to decentralize it and what that even means. DPM involves 3 parts. Let’s start with “market.” A market is place where people buy and sell things. That could be goods (think Amazon), services (think Uber), or financial assets (stock markets, prediction markets etc). Its called a “prediction” market because its a place to buy and sell…predictions. You can sell your prediction at anytime, and how much buyers will pay for it depends on how likely the market thinks the prediction will come true. The more likely the market deems a prediction, the more it will pay for it. Don’t worry if this sounds abstract, I’ll give an example in a minute. Now, the last part: decentralized. This is a fancy way of saying there is no central control. There is no single party that decides what can be predicted on, who can predict, and whether a prediction is right or wrong. No single party owns everyone’s data in the network. Augur runs on Ethereum which means all its data and code is distributed on thousands of computers around the world and is open to anyone. Prediction markets are efficient at forecasting the future as they harness the “wisdom of the crowd.” Since they have skin in the game, market actors buy more or less shares depending on their confidence level. Prediction markets attract folks with the most uncommon, least accessible knowledge since they can most easily spot mispricings. This incents private, insider knowledge to flow into the public sphere. Concrete Example Let’s take a look at PredictIt, a traditional, centralized prediction market. This will help break down how a prediction market works and the limits of centralized prediction markets as compared to Augur. On PredictIt, you can buy and sell predictions on political outcomes. You make a prediction by buying one or more ‘shares’ in an outcome. A share is priced anywhere from 1 to 99 cents. If an outcome occurs, shares in it will be worth a dollar each. If an outcome does not happen, shares in it will be worth nothing. In this example, you can bet on whether Mark Cuban will run for president. You can buy YES shares at 25 cents each which means the market thinks there’s a ~25% chance he will run. Prices go up and down as the market reacts to developments. For instance, if a major scandal surfaces about Cuban next month, YES shares may plummet to 10 cents since many YES holders will sell their shares and buyers won’t be willing to pay as much as before. If Cuban ends up running, then all YES shares will be worth a dollar and NO shares will be worth nothing. If he doesn’t run, NO shares will be worth a dollar and YES shares will be worth nothing. Put differently: whenever you buy a share you are entering a contract with someone betting the opposite outcome and whoever is right will collect the combined amount of cash put into the contract by both sides (which always adds up to a dollar) and whoever is wrong gets nothing. In Augur, prices are denominated in Ether rather than USD, so if Mark Cuban has a 25% chance of running, shares in this outcome would cost .25 ether. But where the real differences kick in is the decentralized part. On centralized markets like PredictIt, only the organization that runs the site can start markets and report on prediction outcomes, traders can only bet limited amounts, and the market is prone to regulation and may be shut down at any time. You end up with a market that is too inefficient to make strong predictions and be used for interesting things. Augur changes all this. Permissionless On Augur, anyone can create a market on anything. Imagine a Chilean farmer whose livelihood depends on rainfall. He could protect his family from drought by creating a market forecasting rainfall, and betting on a low amount. If it ends up raining, great. But if it doesn’t, he still ‘makes it rain’ on Augur where he earns a payout from his hedge. Traditionally it would cost millions of dollars to start a market like this. With Augur it could be a few bucks. In today’s world, only elite gatekeepers can open and close markets. With Augur, markets become like Wikipedia pages. Anyone can start or contribute to them. In other words, there will be markets for basically everything. I think of Augur as sort of Wikipedia meets the Stock Market. It democratizes speculation. In addition to creating markets, participating in markets opens up to anyone anywhere. In today’s world, markets are segregated by borders and capital controls. If you’re in China, for instance, it’s hard to trade American stocks. With Augur, anyone anywhere can in theory get exposure to any asset by speculating on its future value. Free (almost) In traditional betting and prediction markets, the house takes a steep cut. On Augur, there’s no rent-seeking middleman, so costs are minimal. There are still fees that serve to incent truth, but these are minimal. Censorship-Resistant Centralized speculation markets can be shut down or regulated at any time, which discourages participation. Due to regulation, Prediction markets like Predictit have low betting limits. This prevents high confidence actors from betting enough to really move the markets and thus limits the markets’ predictive powers. Augur cannot be regulated like this since it is distributed and peer-to-peer. Trustless On a market like PredictIt, you have to trust a central source to resolve whether or not a prediction came true. This makes it prone to arbitrary decisions, and if you disagree with the verdict, you’re out of luck. On Augur, participants collectively report on outcomes. The Magic Each of these perks are significant but when you fuse them together you get the magic: an open, frictionless, borderless pool of liquidity that becomes an efficient market for predicting the future and as we’ll soon see, determining present reality. Boundless Possibilities Obvious use cases like sports and political forecasting or using Augur to ‘short’ or get leverage on future cryptocurrency prices are just the tip of the iceberg. If you’re unsure whether to rent or buy an apartment, you could use Augur to predict future housing prices in your area. If you’re having a wedding, you could ‘insure’ against getting rained out by predicting a rainy day. Farmers could use Augur to hedge against the risk of natural disaster. Augur may replace polls and pundits as the go-to for political forecasting. Just like you might ask Siri what the whether will be tomorrow, in the future you might ask it who will win the presidential election, and it will say something like “according to Augur, Dwayne Johnson has a 77% chance.” Augur could also be used for accountability. As one Reddit user wrote, > One of my favorite ideas is to have conditional prediction markets on whether politicians will actually implement their own policies. In this hypothetical crypto utopia, politicians would publicly demonstrate they had bought lots of shares of the market stating they would implement X policy if elected. If they don’t, they would lose their own money. Economist Robin Hanson has floated the idea of Futarchy, a new style of governance in which citizens use prediction markets to bet on which policies will be most beneficial to national welfare. Politicians then enact the policies that win out in the markets. Whether this would devolve into plutarchy is yet to be seen, but it’s an intriguing idea. DPMs also carry dystopian prospects such as “assassination markets” where users bet on the date a given individual will die. This could incent assassination since market actors will earn a payoff if they “predict” correctly while potentially skirting criminal liability since they get paid for choosing the date correctly rather than committing the act. While this example may be far-fetched, the reality is that censorship-resistant prediction markets could be used to incent negative, as well as positive, outcomes. But while Augur is censorship-resistant, the community plays a powerful role in determining whether predictions end up true, false or ‘invalid.’ This is where Augur’s token, REP (short for reputation), comes into play. REP is used to report on the outcomes of predictions and to incent honest reporting. Reporters stake their REP on the outcome of a market. If their stated outcome matches consensus, they earn settlement fees from the market. If their staked outcome differs from consensus, they lose their REP. But if they still think they’re right, they can appeal by staking a larger amount of REP. If it gets to the point where the REP bonds hit an upper limit and the network cannot come to consensus, REP splits into multiple versions corresponding to each version of reality i.e., each prediction outcome. But since users presumably want to predict in markets that accurately reflect reality, this is an unlikely event. So Augur can also be seen as a sort of truth engine that is not only efficient at predicting the future but also at determining the present state of reality. Market actors will be incented to report the news correctly, not in a way that grabs attention, satisfies viewers’ bias, or pleases advertisers — unlike traditional news outlets. This may be a powerful antidote to a world ridden by fake news, confirmation bias, and social media bubbles. Today, Augur is hard to use, slow, and costly. Its success will ride not only on the hard work, tenacity and vision of its developers and community but on broader infrastructure improvements like sharding, stablecoins, and offchain exchange (0x). Augur is an ambitious experiment in trustless economy and its success is far from guaranteed. But its potential is staggering. While it won’t happen anytime soon, I think Augur has a real shot at someday becoming the world’s largest (financial) market. And I wouldn’t be opposed to buying some shares in this prediction... As always, comments and criticisms welcome and please tell me if I got anything wrong. For anyone interested in trading on Augur, if you want to toss around ideas about strategy feel free to contact me at bendvw at gmail. * Blockchain * Ethereum * Cryptocurrency * Dapps * Futurism

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latest NSA offering?
by juan 03 Aug '18

03 Aug '18

https://protonvpn.com/support/linux-vpn-setup/

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Newsweek: WELCOME TO AUGUR, THE CRYPTOCURRENCY DEATH MARKET WHERE YOU CAN BET ON A DONALD TRUMP ASSASSINATION
by jim bell 03 Aug '18

03 Aug '18

https://www.newsweek.com/welcome-augur-cryptocurrency-death-market-where-yo… In one niche corner of the cryptocurrency world, an ethical debate is raging. The topic of contention is not exchange rates or squabbles over which virtual money is king, but so-called “assassination markets” where users can place bets on the likelihood of celebrity deaths. So far, U.S. president Donald Trump, Amazon CEO Jeff Bezos, actor Betty White and senator John McCain have been the subject of death predictions on a new platform called Augur. Launched this month by a non-profit called the Forecast Foundation, the service is powered on the Ethereum blockchain and designed to place wagers on the chance of events coming true. “Predict the next election, short a cryptocurrency, or hedge against disaster,” the pitch reads. Augur is a free, open source software for users to create their own prediction markets. Contracts use the Ethereum blockchain, which is a form of distributed leger technology that records all transactions. The controversy over its “assassination markets”—not a totally new phenomenon—has been fueled by the platform developers' claims that they do not have the ability to “censor, restrict, control, modify, change, revoke, terminate or make any changes to markets.” So, who enforces the rules? Indeed, are there any rules? On Reddit, lengthy threads are now emerging about potential criminality and how the platform can effectively be policed. “There doesn't appear to be a way to tag these markets as unethical right now,” one person complained. “Maybe I'm confused but isn't that the point of a decentralized system?” blasted one response. On Augur, trading is based around the listed events; everything from weather to eSports. Bets can be placed to “go long” on an outcome or people can short (bet against) the likely outcome. The platform has its own cryptocurrency called Reputation (REP)—used to settle disputes. Holders of this currency are the guardian angels; the ecosystem's policing team by default. They get a cut of the settlement fee, but will be punished financially if they misreport outcomes. In terms of the assassination markets, the worst-case scenario would be a user gaming the system to make money on the outcome of an event. One extreme example is murder. One Augur market is titled: “Will Donald Trump (President of the USA) be killed at any point during 2018.” Another is headed: “Will Donald Trump be assassinated or die in July 2018.” Of course, the Augur protocol was not designed with this purpose in mind—it is essentially a crypto-prediction tool—and experts told Newsweek the markets are likely the work of trolls. Reached via Twitter, Augur provided a link to its FAQ. A brief statement read: “The Forecast Foundation does encourage users to follow their respective local jurisdictional laws, rules and regulations, even though it can’t and doesn’t control their use of the Augur protocol.” In response to a follow up question about moderation, it told Newsweek: “The only way to really moderate anything on the Augur protocol would be if ethereum miners censored transactions.” Several Augur markets are clearly tongue in cheek. Some include: “Will Kylie Jenner have a sex tape released/leaked before end of 2019?,” “Does God Exist?,” “Will Jon Snow ride Drogon in season 8 of Game of Thrones?,” and “Will Stormy Daniels be arrested again this year?” Others appear to be more serious, discussing potential terror attacks and mass shootings in the U.S. “In [one] way the trolls have done us all a service, these types of markets are inevitable, we should have this discourse now rather than later,” he explained on Wednesday afternoon. “If an Augur type system is successful, you'd be able to include real world events in smart contracts, without having to rely on a third party,” he added. “Right now, there is no way to trustlessly connect a smart contract to real world events. For instance, let’s say you wanted to set up an insurance smart contract that only pays out if a flood happens in your town. With Augur, the smart contract would be able to have cryptographically robust proof that a flood occurred.” The researcher admitted that the platform “can't be moderated traditionally” but noted: “That's the point. Anyone can create a market and there's no central authority that can close a market.” The internet has always had a dark side. Special anonymity software—again never designed for nefarious purposes—has led to the creation of marketplaces like the infamous Silk Road. On this so-called dark web, websites flog everything from hacked credit card details to hitmen. In comparison, Augur is not trying to hide, and the ethical debate remains totally theoretical. “None of the markets have ended yet so it is yet to be seen if [they will be resolved],” Odell told Newsweek. “Since ethereum can be tracked relatively easily if no precautions are taken then law enforcement can always go after the individual market creators if a market breaks the law. “I think, if successful, a decentralized prediction market would be a benefit for society,” he added. “Sure, there will be bad actors, but that's the case for most new tools or innovations.”

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Plenty of Ethereum/Augur Death-prediction articles.
by jim bell 03 Aug '18

03 Aug '18

https://news.google.com/stories/CAAqmgEICiKTAUNCSVNhRG9KYzNSdmNua3RNell3U2x…

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Crypto Gambling Leaves Regulators In The Dark As Blockchain Bets Are Placed On Trump's Murder
by jim bell 03 Aug '18

03 Aug '18

https://www.forbes.com/sites/oliversmith/2018/07/31/crypto-gambling-leaves-… Right now people are placing bets on the assassinations of Donald Trump, Jeff Bezos and Warren Buffett. The financial size of these bets is tiny and the chance of their payout is even smaller—the only thing big about them are the shockwaves that these unregulated, illegal crypto wagers are causing among regulators powerless to act. It’s an example of a wave of crypto-disruption that could soon wash over the $500 billion global gambling market. The “Silk Road” of gambling After two years in development Augur launched earlier this month, initially to little fanfare. A “prediction market protocol” built on the ethereum blockchain, which has been in development since 2015, where anyone can create a market to bet on anything—including the murder of the president and several other prominent business leaders. Around $1.53 million has already been staked across over 800 bets in the first month and, while assassinations have made the headlines, it’s been the World Cup results and predictions on the future price of bitcoin and ethereum that have garnered the most financial action. So far the Trump assassination markets have only received around $23,500 worth of bets, with similar markets for Bezos, Buffett and American actor Warren Beatty attracting little to no wagers, versus the $684,506 which has been bet on the price of ethereum at the end of 2018. While this might sound akin to gambling, CoinDesk Director of Research Nolan Bauerle says prediction markets have the potential to be much more than that. And what makes Augur’s role as a prediction market unique is its entirely decentralized nature.“It is believed that the true potential of the wisdom of the crowd remains untapped and misunderstood. But if prediction markets grow to a global scale, the data points created from the wisdom of the crowd could have a dramatic effect in several industries, insurance principal among them.” A decentralized market By using so-called “smart contracts” Augur has been built as a decentralized protocol that runs entirely on the blockchain and could, in theory, scale infinitely. It’s creators, the not-for-profit Forecast Foundation, also therefore have no control over what markets are made and what bets are being placed. “Centralized prediction markets have many risks and limitations,” Joey Krug, cofounder of the Forecast Foundation told Forbes. “They do not allow global participation, they limit what types of markets can be created or traded, and they require traders to trust the market operator to not steal funds and to resolve markets correctly.” “Augur aims to resolve markets in a fully decentralized way.” Since raising $5.5 million in 2015 during one of the first ICOs, Krug and his team at the Forecast Foundation have grown and are today advised by some of the biggest names in crypto, including ethereum founder Vitalik Buterin and Lightning founder Elizabeth Stark. One of the key factors of building a decentralized prediction market was removing the Foundation’s ability to ever interfere in the activity taking place on Augur, a so-called “stop-gap” that was removed by the Foundation just after Augur launched. According to its website the Foundation now: “Has no power to censor, restrict, or curate markets, orders, trades, positions or resolutions on the Augur protocol contracts.” Regarding the growth of assassination markets and other nefarious uses of his protocol, Krug today insists: “The Augur protocol is nothing more than open source software, and individual users of the Augur protocol are the ones that create prediction markets using the Augur protocol.” Beyond the questionable legality of assassination markets, the Foundation faces another huge regulatory hurdle. Many of the markets on Augur share similarities with gambling or financial options.CREDIT: AUGUR. Regulatory hurdles While the activity taking place on the Augur prediction market is clearly novel and unique, it also shares stark similarities with traditional gambling exchanges, that match punters on either side of a bet, and also with the kinds of options and derivatives traded on financial markets. Because of this Augur poses a huge challenge for regulators. The U.K. Gambling Commission (UKGC) has been progressive when it comes to green-lighting digital currencies as a payment method for its licensees. But when asked about Augur, a UKGC spokesperson directed Forbes to its advice note on remote betting and betting intermediaries written in 2013, which states: “If the operator is not a party to the bet ... but is providing a service to allow two other parties to make and accept a bet, then the operator is acting as a betting intermediary and the appropriate licence is a betting intermediary operating licence.” By that definition Augur, and the Forecast Foundation specifically, could be considered a regulated entity. However that’s far from certain given how far the technology has evolved since the UKGC’s rules were first written. Krug, on the other hand, directs responsibility to those trading on Augur, saying the Foundation: “Encourages Augur users to follow their respective local jurisdictional laws, rules and regulations, even though it can’t and doesn’t control their use of the Augur protocol.” According to Bloomberg the U.S. Commodity Futures Trading Commission also has raised concerns over Augur’s activities and is reportedly investigating whether its activities fall under their jurisdiction. Don’t believe all the hype While the disruption to the gambling sector could be vast, as could Augur’s challenge to regulators, it’s clear that today the project is still very much a work-in-progress. For one, of the 800 markets on Augur, around half have received zero bets. At the same time the two biggest markets (Will price of Ethereum exceed $500 at the end of 2018?and Will REP token trade above $32 at the end of 2018?) have received a combined 75% of the total volume of money bet on Augur so far. The current lack of betting activity across Augur’s markets means most markets, outside of the biggest two, are largely illiquid. Augur’s REP token meanwhile, used by the market to verify the outcome of predictions, has fallen to become the 70th-most-traded crypto token, with a capitalization today of $335 million, down from over $1.1 billion in January. “It’s just quite difficult at this stage to know how do you know how reliable the technology will be going forward, whether there will be issues with it, or whether it will actually pan out,” says Adi Ben-Ari, founder and CEO of blockchain consultancy Applied Blockchain. But if you do predict a brighter future for Augur, the technology now exists for anyone to place that bet. Got a tip? DM me on Twitter @OliverSmithEU or email oliver.smith(a)forbes.com. I cover fintech, crypto and the sharing economy as a senior reporter for Forbes Europe. I've also written about European policy, property tech, cybersecurity and EU startup hubs. Prior to Forbes I was on the founding team of The Memo, London's fastest-growing business and te... MORE

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Blockchain-Based Betting Platform Augur Now Features ‘Assassination Markets’
by jim bell 03 Aug '18

03 Aug '18

https://cointelegraph.com/news/blockchain-based-betting-platform-augur-now-… By Helen Partz So-called “assassination markets” have now popped up on blockchain event betting platform Augur, Mashable media outlet reported July 24. Users are now betting on when certain public figures will die. Created by the non-profit Forecast Foundation, Augur launched its Ethereum (ETH) mainnet-powered predictions platform on July 9, according to Fortune. On the platform, users can make a prediction about the outcome of any event. If a user believes the outcome will happen, they buy shares with ETH. If a user believes the event will not occur, they can short the bet by selling shares. In either case, should a user’s prediction come true, they can profit from the result. Users have recently posted bets on Augur regarding the deaths of a number of public figures, such as the U.S. president Donald Trump and CEO at Berkshire Hathaway Warren Buffett. The bet "Will Donald Trump (President of The USA) be killed at any point during 2018," has acquired 50.3 shares as of July 23. This is not the first example of an assassination market. Back in 2013, an online market was created where users set out to fund the assassinations of Ben Bernanke and American president Barack Obama. While the current markets on Augur merely place a bet on whether such an event will happen, should the wager be high enough it could still create an incentive for someone to carry out the crime. Users on the Augur subreddit have suggested that something be done about assassination markets, but given the decentralized nature of the platform, "no one person can single-handedly change Augur or shut it down," according to the Augur website. To ensure that a bet is settled properly, Augur has created a system of “reporters” who state the truthful outcome of a posited event. Reporters are essentially holders of Augur’s own REP token. In order to report an event, users must stake REP on an event’s correct outcome to receive any of the settlement fees. If REP holders incorrectly report a result, they lose their tokens. If they do not participate in a ‘fork,’ or a highly disputed outcome to an event, they lose five percent of their REP. Passive holders of REP who do not participate in the bet settlement process are also penalized. REP is trading at $30.16 at press time, having hit its peak of over $107 in January 2018 according to Coinmarketcap.

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