
The story of Augur, an Ethereum prediction market - ilanhz
https://decryptmedia.com/2018/10/15/augur-ico-prediction-market/
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mattlondon
Genuine question, why is this called a "prediction market" and not just a
gambling exchange?

As far as I can tell, this is no different from BetFair et al who let punters
bet against each other on the outcome of the next football match? (apart from
"oooh! blockchain!" and "oooh! decentralised!")

I've read a lot of articles about this over the years and seen lots of lofty
words about how this will change X/the world forever, or enable some new
economic model Y or whatever, but as far as I can tell its just the same old
grotty gambling we've had for thousands of years already except its better
because blockchain?

What have I missed?

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repomies6999
You have missed nothing. It is just another traditional business implemented
"on blockchain", and as usual the blockchain here doesn't add value.

~~~
coralreef
Actually from what I can tell, it is a more liquid model.

In Augur you buy shares of an outcome, and the value of those shares can
change day to day, and you can sell at any time. Whereas with a bookie, you
bet on the outcome with fixed odds. Bookie lines may shift, but your bet will
be locked in and unable to appreciate in value.

I'm not sure why bookies haven't implemented this share model, maybe its
needlessly complicated.

~~~
joosters
Bookies have implemented this. Betting exchanges have existed for over a
decade now, you can lay off your bets to lock in a profit if the odds have
moved. Even 'traditional' bookies offer various forms of cashing out a bet.

~~~
coralreef
Could you name some of these exchanges? One problem is that they may not
service certain jurisdictions as well.

~~~
kluge
Betfair is the biggest one.

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blunte
I sat through some early presentations of Augur at the big monthly Bitcoin
meeting that's been running for years in Amsterdam, and my first thought upon
seeing it was, "who says what the factual outcome is?".

Sure in some cases it's black and white, but like most things in life there is
a lot of weight in the interpretation.

So it's back to the original problem with smart contracts - you still have to
trust an oracle, and I would bet ;) that if the stakes are high enough, an
oracle will be manipulated in some way.

Let's take an election for example. We've had enough madness just in the US in
the last 20 years to be skeptical of initially reported outcomes. In fact,
some elections get reversed after study and investigation. Augur isn't going
to reverse a funds exchange. And if someone has enough riding on an outcome,
they may find it worth spending extra money to at least temporarily cause the
outcome to match their bet. They just need to win briefly, even if the results
get overturned later.

~~~
darawk
> I sat through some early presentations of Augur at the big monthly Bitcoin
> meeting that's been running for years in Amsterdam, and my first thought
> upon seeing it was, "who says what the factual outcome is?".

Is that a genuine question, or are you confused about the consensus mechanism?
The answer to 'who says' is the core of what Augur is: people vote on what the
outcome was, in a way that incentivizes them to vote for the answer they
believe to be correct.

> So it's back to the original problem with smart contracts - you still have
> to trust an oracle, and I would bet ;) that if the stakes are high enough,
> an oracle will be manipulated in some way.

No, you do not have to trust an oracle. The whole mechanism is actually quite
cool, you should check it out:

[https://www.augur.net/whitepaper.pdf](https://www.augur.net/whitepaper.pdf)

> Let's take an election for example. We've had enough madness just in the US
> in the last 20 years to be skeptical of initially reported outcomes. In
> fact, some elections get reversed after study and investigation. Augur isn't
> going to reverse a funds exchange. And if someone has enough riding on an
> outcome, they may find it worth spending extra money to at least temporarily
> cause the outcome to match their bet. They just need to win briefly, even if
> the results get overturned later.

That's easy to solve. You simply define the question in a way that obviates
those kinds of issues. In Augur, people vote on the outcome they believe is
correct. The outcome of this process is _defined_ as the truth, within the
system. Since this is transparent, you place your bets with this in mind. You
aren't betting on who will win the 2020 election, you're betting on which
answer people will converge on for the winner of the 2020 election. A subtle,
but important difference.

~~~
pavel_lishin
> _You aren 't betting on who will win the 2020 election, you're betting on
> which answer people will converge on for the winner of the 2020 election. A
> subtle, but important difference._

To me, this undermines the argument that prediction markets are a source of
truth.

~~~
flyingfences
The thing with prediction markets, though, is that you're not just betting on
which answer people will converge on. You're betting on which answer people
will converge on, _weighted by their confidence in their choice_.

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wslh
If you are curious about the Augur usage metrics you can check
[http://dappboard.com/app/application/5a58431c5d7064dc7fb37cc...](http://dappboard.com/app/application/5a58431c5d7064dc7fb37cc8/users)

~~~
paulsutter
The graph shows daily users at about 150-200

The only cryptocurrency "apps" with meaningful users are the exchanges like
Coinbase or Binance with millions of users. The actual ethereum dapps have
basically zero usage.

~~~
flyingfences
How do you measure "daily users" in this context, though? Prediction markets
are often looking way out into the future. Someone may place a bet one day and
then not log in to check the next day, but that doesn't mean that he is no
longer "using" the market.

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nsomaru
Last I read, REP gave up on plans for a decentralised Oracle. That’s the
hardest part of this whole deal,unfortunately

~~~
sputknick
That's mostly true, with a caveat. By default the oracle is not decentralized,
but what is decentralized is the "backstop". If I create a market, I can also
be the one to report on the outcome of the market (versus it being
decentralized in the original plan). What they introduced is the concept of a
"dispute". So if I report on a market you can dispute it and say "Hey you are
lying" and if enough people agree that I lied, you get a portion of the market
fees. So you are correct, it's no longer decentralized, but it's also not
centralized. Not perfect, but still pretty good.

~~~
JumpCrisscross
> _if enough people agree that I lied, you get a portion of the market fees_

This creates a host of post-closing political incentives. You are no longer
betting on an event outcome, but on a consensus process.

~~~
DennisP
This is true, so it comes down to how well the consensus process reflect
reality. It's a pretty interesting process: there are multiple layers of
dispute escalation, and the ultimate backstop is that Augur splits in two. You
keep REP only on the side of the split you voted for.

The theory is that the version of REP that reports the truth will be more
valuable on the open market, and that the split is a credible threat which
keeps everyone honest, so it will seldom actually happen.

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dang
Related post:
[https://news.ycombinator.com/item?id=17799346](https://news.ycombinator.com/item?id=17799346)

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Kinnard
I can personally say that while the Bitcoin Basement was definitely packed, it
was not that dirty. And I cleaned. After myself and others. :|

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tomp
> Vitalik Buterin–the person most people consider the godfather of Ethereum

What kind of retarded reporting is this? The _godfather_ of Ethereum? What
does that even _mean_?! Why not just say, the founder/creator of Ethereum
(skipping "most people consider").

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BayesStreet
This article, like most other crypto related posts is a thinly veiled ad.
Anyone who just focuses on how the price graph for something moves isn't worth
listening to.

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granaldo
[https://www.coingecko.com/en/coins/augur](https://www.coingecko.com/en/coins/augur)

~~~
wepower_ico
My new place to look for ICO market data
[https://www.trackico.io/ico/augur/#market](https://www.trackico.io/ico/augur/#market)

