Fw: Fw: Augur: Blockchain-based Internet prediction market.
Razer
Rayzer at riseup.net
Sun Sep 27 09:54:27 PDT 2015
On 09/26/2015 11:15 PM, jim bell wrote:
> Copied from correspondence.
>
Riseup.net doesn't like Fw: Fw: in subject lines...
"Re: ***SPAM*** Fw: Fw: Augur: Blockchain-based Internet prediction market."
> ----- Forwarded Message -----
> *From:* Jim Epstein <jimepstein at gmail.com>
> *To:* jim bell <jdb10987 at yahoo.com>
> *Sent:* Saturday, September 26, 2015 5:23 AM
> *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market.
>
> Thanks, jim. I will read your essay and engage with this topic again
> soon, but I'm immersed in another unrelated story that's consuming my
> brain and time. I'll get back to you.
>
>
> On Sat, Sep 26, 2015 at 3:47 AM jim bell <jdb10987 at yahoo.com
> <mailto:jdb10987 at yahoo.com>> wrote:
>
> I wanted to mention that Prof Juels has responded to my inquiry.
> See his work at:
> https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&sqi=2&ved=0CCsQFjACahUKEwi9hY33mZTIAhXRpYgKHeapAhY&url=http%3A%2F%2Fwww.arijuels.com%2Fwp-content%2Fuploads%2F2013%2F09%2Fpublic_gyges.pdf&usg=AFQjCNHOBvCYwJ5Aq0CmHTOY53sGdRs5Sw&sig2=XpktiIWHc5e6slk0VsLOcQ&bvm=bv.103388427,d.cGU
>
> I should point out that the main reason for my inquiry WASN'T to
> get academic credit, but rather to point out that people who have
> read my AP essay (and who understand and agree with its goals and
> likelihood of working) would consider Juels et al objectives to be
> undesirable and, indeed, dangerous. Superficially, it sounds good
> to say that they are trying to prevent "criminal contracts", but
> for those of us who oppose (for example) laws against
> currently-illegal drugs, we might very well WANT a "criminal
> contract" to be operational, like Silk Road or such. Or my AP
> (assassination politics) idea.
>
> Prof Juels claims that he/they were not aware of my AP essay.
> Well, sorry, but I find that a little hard to believe. It's not
> that it's hard to believe that an average citizen of America (or
> the world) hadn't heard of it.THAT would be easy to believe.
> Rather, Juels, Shi, and Kosba claim to be working on the concept
> of trying to stop "criminal contracts", and do you really believe
> they haven't heard of AP?!?
>
> My understanding is that my AP essay is probably the second
> most-famous Internet essay in existence, perhaps being Ted
> Kaczynski's, and it makes far more sense. Now that Juels, Shi,
> and Kosba definitely know about AP, I think that they should
> address its implications BEFORE they purport to fight it.
> Jim Bell
> *From:* jim bell <jdb10987 at yahoo.com <mailto:jdb10987 at yahoo.com>>
> *To:* Jim Epstein <jimepstein at gmail.com
> <mailto:jimepstein at gmail.com>>
> *Sent:* Wednesday, August 26, 2015 3:39 PM
>
> *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market.
>
> You might also want to look at
> http://www.arijuels.com/wp-content/uploads/2013/09/public_gyges.pdf
> , by Juels, Shi, and Kosba.
> Jim Bell
>
>
>
> ------------------------------------------------------------------------
> *From:* Jim Epstein <jimepstein at gmail.com
> <mailto:jimepstein at gmail.com>>
> *To:* jim bell <jdb10987 at yahoo.com <mailto:jdb10987 at yahoo.com>>
> *Sent:* Wednesday, August 26, 2015 2:35 PM
> *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market.
>
> I'm not familiar with it, but I'm going to read it. I'm very
> interested. Thanks for sending this.
>
> Jim
>
>
>
> On Wed, Aug 26, 2015 at 1:14 PM, jim bell <jdb10987 at yahoo.com
> <mailto:jdb10987 at yahoo.com>> wrote:
>
> Dear Mr. Epstein,
> Are you familiar with my 1995-6 essay, "Assassination
> Politics". www://cryptome.org/ap.htm
> <http://cryptome.org/ap.htm>
> Jim Bell
>
> ----- Forwarded Message -----
> *From:* jim bell <jdb10987 at yahoo.com <mailto:jdb10987 at yahoo.com>>
> *To:* Cpunks List <cypherpunks at cpunks.org
> <mailto:cypherpunks at cpunks.org>>
> *Sent:* Tuesday, August 25, 2015 7:31 PM
> *Subject:* Augur: Blockchain-based Internet prediction market.
>
> http://reason.com/blog/2015/08/11/augur-gambling-prediction-ethereum
>
>
> Augur May Become the Greatest Gambling Platform in History. Is
> There Anything the Government Can Do to Stop It?
> A blockchain-based prediction market that won’t be controlled
> or managed by anyone.
> Jim Epstein Aug. 11, 2015 12:36 pm
>
> An online gambling platform could do to the neighborhood
> bookie what electric refrigerators did to the ice delivery man.
> Coming this fall, Augur will allow participants to wager money
> on any future event of their choosing. Software will set the
> odds, collect the bets, and disperse the winnings. The price
> alone should give Nevada sportsbook operators pause; an
> estimated one percent of every pot will go to keep the system
> running. The average vig today is about 10 times that.
>
> Augur isn't a full-fledged casino. You can't play roulette or
> poker, and running lotto on the platform would be tricky. But
> it'll be great for sports betting.
>
> Here’s what’s truly novel about Augur: It won’t be controlled
> by any person or entity, nor will it operate off of any one
> computer network. All the money in the system will be in
> Bitcoin, or other types of peer-to-peer cryptocurrency, so no
> credit card companies or banks need to be involved. If the
> system runs afoul of regulators—and if it’s successful, it
> most certainly will—they'll find that there's no company to
> sue, no computer hardware to pull out of the wall, and no CEO
> to lockup in a cage
> .
> This is new legal territory. If Augur catches on as a tool for
> betting on everything from basketball games to stock prices,
> is there anything the government can do to stop it?
>
> Augur is a decentralized peer-to-peer marketplace, a new kind
> of entity made possible by recent breakthroughs in computer
> science. The purpose of these platforms is to facilitate the
> exchange of goods and services among perfect strangers on a
> platform that nobody administers or controls. Augur’s software
> will run on what’s known as a “blockchain"—a concept
> introduced in 2008 with the invention of Bitcoin—that's
> essentially a shared database for executing trades that's
> powered and maintained by its users.
>
> Bitcoin’s blockchain was designed as a banking ledger of
> sorts—kind of like a distributed Microsoft Excel file—but
> Augur will utilize a groundbreaking new project
> called Ethereum that expands on this concept. Ethereum allows
> Augur's entire system to live on the blockchain. That means
> the software and processing power that makes Augur function
> will be distributed among hundreds or thousands of computers.
> Destroying Augur would involve unplugging the computers of
> everyone in the world participating in the Ethereum blockchain.
> If Augur is destined to become the cypherpunks answer to
> gambling prohibition—the betting man’s version of the online
> drug market Silk Road if you will—you'd never know it from
> talking with its developers. They work for a San
> Francisco-based nonprofit, attend conferences, have legal
> representation, and talk openly about what they’re up to with
> reporters. Augur even commissionedone of those cheesy motion
> graphics promotional videos favored by new tech startups.
>
> About half of the roughly $600,000 raised by Augur's
> development team comes from Joe Costello, the successful tech
> entrepreneur who was once Steve Jobs' top pick to become the
> CEO of Apple.
>
> Joey Krug, a twenty-year-old Pomona college dropout and
> Augur's lead developer, never uses the world “gambling" to
> describe his venture. He and his team of five employees call
> Augur a “prediction market,” a term that emphasizes the
> information generated when a bunch of people have a financial
> incentive to feed their expertise into a sophisticated algorithm.
>
> With Augur, as bettors move money in and out of the pot, the
> odds adjust. This yields publicly available statistics that
> should carry weight because they're derived from the opinions
> of a crowd of people with a stake in the results. InTrade, for
> example, the best-known prediction market until federal
> regulators forced it to stop serving U.S. customers in 2012,
> beat the pollsters and pundits by foreseeing the outcome of
> the 2008 presidential elections in 48 out of 50 states.
> Augur’s developers hope that their platform will make it
> possible to do a Google search to look up the likelihood of
> some future event. This could usher in a better world, with
> more informed policy decisions and less malinvestment.
>
> But Augur also serves the less high-minded—though no less
> noble—purpose of providing cost savings and convenience to
> gamblers. Restrictions on gambling serve to protect government
> revenue at the betting man's expense. State-sanctioned casino
> operators pay high taxes, and state-run lotteries fleece their
> customers. But there's no logical or moral case for government
> restrictions on gambling, since no third party is harmed when
> consenting adults wager money on the future. Augur actually
> has the potential to make the world safer by taking away
> market share in the gambling industry from criminals.
>
> And yet sports betting is illegal in most states, and
> prediction markets are tightly regulated by the Commodity
> Futures Trading Commission (CTFC). The agency sued
> Ireland-based InTrade in 2012 to prevent it from accepting
> bets from U.S. customers. (The company folded shortly after.)
> In 2013, the CFTC and the Securities and Exchange Commission
> (SEC) jointly sued the prediction market Banc de Binary for
> allowing U.S. customers to make bets on commodity prices.
> The CFTC has approved other prediction markets, such as the
> New Zealand-based PredictIt, but only after it agreed to abide
> by the agency's restrictions.
> Krug says the Augur team is planning to meet with CFTC staff
> go over how their system works before it’s launched, but says
> he's not overly concerned. “Our friends in Washington, D.C.
> say the CFTC will probably just dismiss Augur and say it’s not
> a big deal,” Krug told me in a phone interview.
>
> That doesn’t sound like much of a legal strategy, but how do
> you have a legal strategy when you're building something
> unlike anything that's ever existed? Federal anti-gambling
> laws, such as the 2006 Unlawful Internet Gambling Enforcement
> Act, target the companies that facilitate online betting—
> website operators, credit card companies, banks—not individual
> gamblers.
>
> Augur’s biggest legal vulnerability is the community of human
> “reporters” who are needed to settle bets on the platform,
> says Cardozo Law School's Aaron Wright, who is writing a book
> about the legal implications of blockchain technology. Let’s
> say a group of people wager money on Augur over the outcome of
> a boxing match. Once the bout is over, human participants (who
> receive a portion of the trading fees as compensation) must
> report the outcome to the system before Augur’s software will
> disperse the money to the winners. "There’s at least an
> argument that the people doing that reporting are aiding or
> abetting unlicensed options and could be prosecuted," says Wright.
> But Augur doesn't collect personal information on any of its
> users, so identifying these people could be difficult. And
> Augur is a borderless technology, so U.S. gamblers could
> simply rely on foreigners to report on the outcomes of their bets.
>
> One attorney I spoke with suggested that the team that’s
> building Augur could be brought up on charges for aiding and
> abetting a criminal conspiracy. Nate Cardozo, a staff attorney
> with the Electronic Frontier Foundation, thinks that's
> far-fetched but says he can't rule it out. Cardozo emphasizes
> that writing open source software doesn’t necessarily protect
> the team from prosecution.
> “We’ve taken the steps that we need to take in order to
> bracket the individual's risk and the organization’s risk,”
> says Augur’s attorney, Marco Santori, who declined to comment
> further on exactly what those steps might entail.
>
> Even if Krug and his colleagues were to face criminal
> prosecution, the technology would live on. After Augur is born
> into the world, the development team could release a software
> update that would cripple the system. But in that case,
> Augur's users could band together to block any changes to the
> underlying code, or another developer could copy the open
> source code and simply re-launch the platform.
> The big question with Augur—and with blockchain platforms more
> generally—is whether they can outrun our regulatory state long
> enough to grow so large and popular that they're truly
> unstoppable. My money’s on Augur in that race.
>
> For more on the promises and pitfalls of decentralized
> peer-to-peer marketplaces, read my recentReason magazine
> feature story on the topic.
>
>
>
>
>
>
>
>
>
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