Bitcoin Forum

I will post daily developer log of what I done for bitpredict, a bitcoin prediction market site. However, today I am too tired to work after returning home from college. I might or might not got anything done tonight. We'll see.

After realizing how late it is, I updated to rails 3 and restart from scratch the bitpredict project directory. A disappointing start, but the key is progress.

If you can move, you will eventually get to your destination no matter how long it take. So, my goal is to alway be somewhere further along at the end of the day rather than be stuck at the beginning of the day.

I got a bit further along today. Finally got the test server from the rails directory running. My goal is to make much more progress than that tommorow. I also attempted to set up my netbook for development. It was an utter fail.

More progress: figured out how to generate static pages in rails.

Yesterday, I didn't do anything. This is bad.

Today, I only modified the home template. I think I'll do something with a bit more substance tomorrow. Perhaps, a generic registration system will be in order.

Yay!  Bitcoin prediction market.  I am glad to see this coming together.  I wish you luck, let me know if there is anything I can do to help.

Ugh. I missed a day. No excuses there.

Very tired person from college. All I did today was beginning the use of an authentication framework and generating a user model.

I created a register link, fix spelling, and figure out how to do routing. Today is the most substantial progress we see.

Let see what happen tonight.

I did another session of coding tonight. I created an empty template page for new user, wrote unit testing code, and generally making sure that you can't actually have empty username.

sorry if this question was asked already:
what will the   
bitcoin prediction market
actually predict?

People put up a bet on things that they will think will happen. For example, who will get elected in 2012 US presidental election. Will the republican take over congress? The marketshare of the search engines. It will be mostly be something specific and easy to verify.

Well, I was busy the whole day with another web application, a MVP if you will. I was close to completion so I decided to pour all my effort into getting it online. With any luck, I will integrate bitcoin as a payment option.

As for this project, it will resume as soon as I fixes things that went really wrong and reveal the MVP for feedbacks.

that would be fantastic. I am ready to join!

Well, some bets will be excluded on what the site operator and me thinks it will encourage dangerous and unethical events to happen. Examples are not up for discussion.

While I generally agree that it is (and should be) the site operator's discretion as to which bets should be taken, I wonder if the rules could be very simple.  The simplest rule I can come up with is that "all bet outcomes must be exogenous with respect to participants."  I think if you simply focus on verifying that topics are truly exogenous, all the unethical or dangerous things will fall by the wayside.  If any participants have a say in the outcome, the bet is not exogenous, and therefore should be banned.

Allowing anonymity while enforcing exogenous bets is the biggest challenge IMO.

I am curious if your sites design will be open source.  Certain dangerous or possibly unethical predictions were one of the advantages I saw to bitcoin, although, obviously, you would not want to be the site admin responsible for allowing such predictions to be made.

If a user can create his own prediction, how are predictions settled?

I start a prediction "The difficulty level for generating bitcoins will be equal to or greater than 3500.00 on 12/31/2010 11:59:59pm ET"

and the predictions total on 1/1/2011:

Yes: 500 btc
no: 347 btc

the difficulty level settles at 3700, who clicks on the 'yes' button and distributes the coins?

Not wanting to step on anyone's toes here, but I like the unethical possibility. Not that I want to start any unethical event prediction, but I do want to be able to do so, if I choose to :)

So, tip-toeing to avoid hurting anyone, this is a really small project, the design is way more challenging than the actual logic, so if there's more interest in this for sociological reasons than just me and Babylon, I can prep something up.

i just registered on TAABL have tried to get a ticket and placed a bet.
then for some reason cancelled the ticket and now my 1 bitcoin is completely gone in my account.
what happened?
how can i get my BTC back.. and bet again? :-[

It is open source. I just have not decided a license yet.

For now, I am going with the normal user account. It might change in the future.

I predict great things for the prediction market  :D

I predict success for the prediction of the prediction market.

The simplest way is to let the participants confirm the outcome and have the site distribute the BTC.  Here's how it works:

Every scenario has an end date.  After that date, all participants are asked to log in to their accounts and record whether they lost or won.  As each loser confirms losing, the site divides among the winners that loser's contribution to the pool.  A proportionate amount of the winners' contribution is also paid out to the winners, ensuring the pool maintains the same ratio of bets for and against the outcome that it had when betting stopped.

But, you ask, what keeps the losers honest?

On a pseudonymous site, each user account can have an associated feedback score which helps determine honest players.

On an anonymous site, the winners can offer a partial refund to losers who pay their bets.   For example: losers who confirm their loss will be refunded 5% of their bet.  As long as the money is stored in the site account (so the losers can't use it), the losers' best interest will be to confirm their loss and retrieve the refund.

This system minimizes demands on the site operator (hopefully keeping costs low) but also protects both parties from unforeseen events.  For example, imagine a bet 10 years ago on "who will win the year 2000 U.S. presidential election?"   Those losers who don't believe the reported outcome was fairly determined can refuse to pay their bets, or better yet, they can request a high refund rate.  If the winners agree about the unfairness, they will offer the high refund rate.

But, you complain, my money and my winnings will be subject to the whim of some sore loser!  This is true, but a good site will let you sell you future share of the winnings on an open market.  You'll receive money now and some entrepreneur will try to collect from the sore loser.

-Dave

I am not sure if this is fair, but I'll implement your suggestion when the time come. The best way to find out something is to actually test and see how it goes.

interesting.

How about anyone can cast their vote for who won, but must put up 0.10 btc. If you cast a vote on the wrong direction (say Gore won the election), you lose that 0.10 btc, but if you are right, you collect your 0.10 btc back plus a little extra set up by the exchange.  If there is a real discrepancy, say more than 10% disagree, the mod has the final vote (Kiba)

Well I hope we can at least agree that an assassination market (http://en.wikipedia.org/wiki/Assassination_market) would be wrong and to be avoided...

I think celebrity death pools are fairly common and not universally agreed to be wrong.

Also people bet on their own death all the time and it is considered good by most.

The simplest way to determine the outcome is to automate it completely.

The funds are frozen until one outcome is chosen by people who represent 50% or more of the betting stake. At that point, everything is paid out to those who favored the chosen outcome.

It's in no-one's interest for the funds to be tied up forever, so the participants will find a way to get 50% support for one outcome or the other.

All the organisers need to do is to run the website, not to get involved in controversies.

Automation would be basically the site gathering data and than computing the result and then paying the bettors accordingly. No humans involved other than the site operator/me coding it.

How do you prevent fraudsters from placing 90% of the bets? (50% in ribuck's example.)

Provided you do that, how do you assure me that the people betting with me are not idiots easily duped?

-Dave

Hush, that's one of those details that it is best not to discuss.

Heh, it's the wrong thread altogether, but I'm not saying I agree with that or any of the other unethical events. What I'm saying is that I believe it is a good thing that the possibility exists, as while it's true we all probably agree some things are out there, completely out of bounds, what happens when we feel very strongly about something but we just feel different things? Who is right?

My only line of reasoning is: I don't think we should be imposing moral or creating rules of what should and should not be done with this. If we don't like it, we don't use it. Stay clear of all the things you oppose to, but let others do what they like with their own lifes... so as long as they don't affect negatively the lifes of others, but that's a completely different issue.

It would be a little eerie to see "FreeMoney dead on or before Jan 1, 2011", but I'd consider it a great source of info and opportunity to profit. ;-)

Hey, it's the site operator and me's discretion to slap down any bet we like.

But, I would like to give the site users to moderate themselves by killing a bet within say, 5 hours.

Let just say I don't want bitpredict to be a source of calamity in the world.

It's ok if Obama does it....
http://www.salon.com/news/opinion/glenn_greenwald/2010/09/25/secrecy (http://www.salon.com/news/opinion/glenn_greenwald/2010/09/25/secrecy)

I predict the cia would make a good living from such a market......

At what point does it become self defence?

Bitpredict is not dead! I just had another web application to attend to, one that will accept bitcoins!

I'll report on the payment integration with my new web app since it is relevant to know how I will implement such a system for bitpredict.

Today, I worked on the development environment on my netbook at the coffeeshop/bookstore so I can develop bitpredict from there. The only problem is that the netbook take too long to do anything. By the time I leave, I have the development environment barely set up by the time I leave the shop to pick up mother.

Bitpredict will be resuming development with the project to learn how mybitcoin merchant API work for soulplaying.com

Once that is done, development of bitpredict's market system will begin in earnest.

I started working on bitpredict's user registration and user login/user sessions and the whole nine yard that come with setting up an account system.

I will come up with an accountless system for those who are too lazy to register.

I've played the Foresight Exchange play-money prediction market at ideosphere.com since 1995. It would be great to see a Bitcoin version. The way it works is you create a "claim", which is a prediction that might or might not come true. Normally these have a due date for when they'll be judged. You also name another player as the judge. The claim creator can bet on the claim but the judge can't.

Once the claim is created people can offer to buy "yes" or "no" shares at prices ranging from 0.00 to 1.00, which can be thought of as the probability that the claim will come true. When a pair of yes and no offering prices match, a pair of shares are created and given to the bidders, while their accounts of FX$ play money are decreased.

At the due date the claim is judged. If it is true, owners of YES shares are payed off at FX$1.00 per share, and if false, owners of NO shares receive similar payoffs.

It's pretty impressive that the game has gone on so long. Many of the claims will not come due for decades into the future. I think this game could be a good model for a real money version based on Bitcoin.

Sounds like intrade.com with the addition of user created claims. This is exactly what I want to see. Add the possibility of multiple judges and it sounds perfect.

It isn't really possible to forbid judges from betting unless you are going to ID people and background check and worse since you'll need to make sure people's brother in laws don't bet for them by proxy etc...

Multiple judges with small penalties for voting in the minority is the best way to go imo.

THIS IS WORKING DRAFT:

How it will work:

Each claim have a stock of 1000. People will seed price estimation by deciding how much each of the stock is worth. Each stock can be sold and brought on the market. Each have an end date.

Traders who don't invest in a claim will judge. There can only be 3 of them, they must be elected by majority rule on each side. If possible, bots will judge. Bot don't have feeling, emotions and their code as well data they collect is open to the public for inspection.

The losers' pool get divided up into the winners.

1% of winner pool get divided into the losers.

Meanwhile, the site operator and me get 0.002 for each trade. 0.001 of which will go to the judges.

UPDATE

Still working on old boring registration and session system.

Me too. Foresight exchange is great (despite its clunky interface), and if there was a similar Bitcoin-based service I'd use it.

Foresight Exchange works well with unlimited stock. Whenever there's a matching bid and offer, a new betting pair is created for that claim.

Picking an arbitrary number is not necessary. Every amount bet on the YES side needs to be matched with an amount bet on NO. If nobody will take the NO side you can't have 1000 units of yes. But if there are plenty of units of NO you might have 2000 or 10000 or whatever.

I am please to announce that I am able to access bitpredict's VPS again thanks to aceat64.

I created a rudimentary registration system. Not sure sessions work.

So I am working on prediction stuff.

Update:

I created two models; prediction and bid.

Prediction data: title, description, and by date.

Bid: PredictId, UserId, txn.

I also added a funds attribute to users.

Once the rudimentary detail is done, I'll work on a script to upload site to aceat64's server so that I can test it with a few people.

A little update:

Worked on making sure you can't get a negative balance in your funds in your user account.

Barely got started on bid spec test.

Quickie update for today:

I got some of the bid data model set up. Mainly, it hold data relating to the prediction data, and the user data.

I am having trouble with bid and user.funds checking. However, there's still a bunch of work elsewhere such as creating a CSS file for the site, so I did that in absence of progress.

Doh. It's my bid spec that's causing problem. Still, the easiest route to progress as well necessary anyway is to work on the site layout. Now it have a blue background.

Latest update...I am getting close to a proof of concept. User funds are getting subtracted; bids are linked to prediction and user...

Next step is to work on all the forms so people can submit predictions, and people can buy bids...

Today's Update: I find myself creating a lot of missing pages after working the model for quite a bit.

I also realize at this moment that I forgot the crucial details on how to manage and rate judges.

I was working on the ability to make predictions.

Today, I worked on something non-essential called...the footer. Should be focusing my effort on getting a proof of concept working rather than..ya know...wasting time on footer.

I made it my goal to work on and fix up prediction creations. Then I got distracted by the fact that I didn't have a logout mechanism. So I fix that.

Would it be enough to allow bitcoin to include conditional transaction to create a prediction market? The conditional transactions then would consist of a normal transaction with a condition attached to it. The condition could be a prediction, like "silver will hit XX/ounce on AA/BB/CCCC". The nodes would have to verify the outcome of the condition, to know whether the coins are transfered or not. So if someone spends the conditionally received coins, he may have to add a large fee to motivate nodes to verify the outcome of the condition.

Such is a complicated thing for the proof of concept.

Yes, but you know that governments are fiercely opposed to unregulated prediction markets, even more than just private currencies I suspect. So, don't you think, a prediction market must be P2P to avoid being shut down.

The site itself is open source. Shutting down my site doesn't mean much of anything if people can set up their own exchange.

I have not seen your site. Is it ready jet?
Anyway, if large sums are bet on a prediction, then your site will store those sums until the outcome is clear. There are a few problems:
1. The government can confiscate the sums of bitcoins that you temporarily store.
2. The outcome of the prediction is determined by your website. After that the bitcoins are payed-out, and this cannot be reversed, even if the outcome turns out to be the other way around. For example, there may be a bet called "Bin Laden brought down the twin towers". If bets are put in a block chain, and the truth on the prediction turns out the be different then the transaction will be reversed by consensus of the nodes.

No. If it was...then I would already announce it.


My site is essentially a bank. I don't store balances for outcomes. This is to facilitate a liquid market. Store at your own risk.


My site is just an intermediary. Outcome are decided by judges elected by people on each side.

Thats because of assassination politics.

 ;)

The beauracrats are mortally scared of there being ramifications to their actions. For instance if one shot a child or a pet while raiding a non violent person's house which resulted in a million bitcoins predicting their death.....

Assassination politics is rather a dangerous game to play...Death by majority.

It would be one of those things excluded as a prediction in bitpredict.

So it would not be a good idea of embedding a prediction market into bitcoin right now, because that would result in a fierce reaction against it by politicians.
But I wonder whether assassination markets are really a problem. first of all nodes can block predictions they think are immoral.

On the other hand, some assassination bets could be quite just from a libertarian stand point. It would be similar to paying a DRO for protection. Paying a DRO for immoral actions would just result in another state, and would not be in the interest of the individual. But then again we do not live in a rational society which is required for this.

Anyway, the decentralized P2P prediction market will come to being, sooner or later... bitcoin is the first step.

Death is a dangerous weapon that should only really be used as self-defense.(How would you like it to be AIMED at you because of a person's grudge or a bloodthirsty mob?)

Otherwise, I do not trust human beings' judgement on the use of the death.

I do agree with that. But the bloodthirsty mob is what we have right now. It is also called democracy. The very fact that we have this system and people are actively supporting it tells you that you cannot trust the judgment of the people.

 I merely state that the childs parents would be justified in placing a prediction  :)

Just because it fit libertarian ethical theory doesn't mean it's a good idea to put up a prediction.

Assassination politics open up a whole can of worm. It's not going to be used against just evildoers, but people who are rich, people who made several individuals mad, or just being successful.

Placing such a prediction after the fact is not the best thing to do. Better is it to buy the following prediction to protect the child:
"The parent will receive X bitcoin when the child is killed". Of course the seller of this prediction would want to know who the buyer is :-) Typically an insurance/protection company will want to sell this type of predictions.

I don't like assassination politics either, although I must reluctantly accept that such markets may arise in a libertarian society, as they are permitted by libertarian ethics.  However, I do not condone their use.  I will ostracize people who use assassination markets in an unjustified manner to go against people that I feel do not deserve to be assassinated.

I like to think of libertarianism as a legal theory.  Not necessarily a moral theory, since I do not necessarily believe that all actions that are permitted by the NAP are "ok".

Conditionally paying someone if a death happens, is not violence a priori. Since it could be an insurance company that is selling this contract. On the other hand, if the person you sold this contract to makes the kill to fulfill the condition, you can argue that he loses the status of a moral agent, since he violated the NAP. In this case the you may argue the responsibility for the kill forwards to the one that sold the contract.

Oh dear, how my motivation lose with no deadline to meet.

I begun working on it again after some hiatus.

Yay!

I really wanna bet on interesting things, and bitcoinsportsbook hasn't opened any wagers on the value of bitcoins again yet.

What? How would it take a majority. I bet $2000 that Councilman Joe will not die on May 15th. Someone takes the other side, maybe they make it happen. Sure people can pool bets, 10 or 100 or 1000 people could get a rather bet together, but this has nothing to do with majority. The reverse is true too, 200 million people who won't put up one cent can't affect a thing on a prediction market.

The unsolved problem I see for this kind of market is the who determines time or fact of death? Dexter would have trouble getting paid since he knows how to get rid of the bodies.

Interestingly, intrade.com can already be used like this. How creepy would it be to be an absolute lock to win and see your intrade odds drop hard on large volume? Haha, not that dying always persuades sheeple not to vote for you. But if they phrased it "So and so to be sworn into such and such office on DATE" that would do it. Maybe they do, I haven't read them all.

I'm pretty mixed on the whole thing, if it was widely used it would be a game changer though. Or maybe not, we probably don't even know the names and faces of the people who really should be removed.

I pretty up one of the error display thing.

Next time, I will work on the bitcoin accounting for bitpredict. I need a strong foundation to work with, after all.

I begun analysis the codebase of Davout's currency exchange market to learn about how he accomplish bitcoin related tasks. The code output from my analysis is very minimal as I only figured out how to get started.