"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?”
   This is, as they say in marketing, not a problem but a feature.

   On Thu, Aug 2, 2018, 3:55 PM jim bell <[1]jdb10987@yahoo.com> wrote:

     [2]https://www.technologyreview.com/s/611757/this-new-ethereum-based
     -assassination-market-platform-could-cause-napster-size-legal/\×
     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

References

   1. mailto:jdb10987@yahoo.com
   2. https://www.technologyreview.com/s/611757/this-new-ethereum-based-assassination-market-platform-could-cause-napster-size-legal/\