Here is an argument I found against Protoshares, which has a unsupported method of a prediction market.  


BitShares is not a prediction market, nor could it support one, as it has numerous practical and theoretical problems.

BitShares is a possible future cryptocurrency which allows users to create collateralized debt- instruments called BitAssets. These BitAssets are automatically re-priced (and even liquidated via margin call) based on their mark-to-market value, as determined solely by the price implied by the most-recent BitAsset-creation. The author claims that arbitrageurs will take advantage of differences between the BitPrice and the True Price and therefore price the asset correctly, and supports this claim by arguing that users are trading in a prediction market, and prediction markets are accurate sources of prices.
The claim that users are trading in a prediction market is false, as is the claim that there are ‘arbitrageurs’ at all. In an ‘index prediction market’, shares are repurchased at the price of an index, for example one share of “Hillary2016ElectoralCollege” may be ultimately repurchased for $255/share, if Hillary Clinton managed 255 Electoral College votes in the 2016 election. The magic of prediction markets is that the Future Payout = Future Repurchase – Today’s Market Price, meaning that traders who perceive a positive expected future payout (ie an incorrect price) can profit by trading on and revealing that information (changing the price). In contrast, on November 9th, 2016, after the votes are counted, the world of BitShares will experience no change in state, no payout at all (!) and the “Hillary2016ElectoralCollege” shares will lack even speculative value. They may go up, down, or sideways without bound.
In fact, although the author claims to be a “self-taught Austrian Economist”, the entire microeconomic foundation of BitShares is incorrect. Fundamentally, BitShares assumes that prices are driven by arbitrageurs, when in fact they are driven by users. Arbitrageurs merely perform the simple service of aggregating and cancelling different price offerings, which prevents users from being ripped off. Speculators absorb and transfer risk, brokers call in the order, and janitors cleans the trading floor to prevent slippage. It is not the employees, but the users, who set prices by expressing supply and demand preferences (While short episodes of speculator-control exist, they are defined by their terminal insanity and a subsequent correction to the user-controlled price level). If the market offers a price which is “too low”, such as a car for $5, people will
buy them to use: to drive, to enjoy the latest car tech, to avoid breakdowns, for their children, or simply because $5 is less than gasoline or oil changes. The homeless could even live in a $5 car. If the market set the price of cars to $5,000,000, people would sell them to use that money to buy other things to use. In BitShares, there is no use, only speculation, and so prices can move without bound.
Even if the BitShares idea were partially valid, the scourge of risk, and well-known effects of Asymmetric Information would iteratively drag the price of all BitAssets to zero, in a phenomenon called ‘The Market for Lemons’. The margin call system only increases the fragility of this mysterious experiment, such that the richest or craziest agents could create and profit from immensely volatile price swings.

Incorrect.  The new mining rate after 2040 is pretty much close to zero.  We reach 20million around 2033.  


chart in this article
http://makeeasymoneyfaster.com/make-money-from-home-as-bitcoin-miner.html

What happens when all bitcoins are mined and competition for bitcoin mining decreases because there are only transaction fees?  What then?  Bitcoin may run into serious complications 40 years down the line from now.  This means the longevity of bitcoin network is at stake.  Once the hashing rate decreases then, any government/ corporation can jump in and perform a 51% attack. 

We all know bitcoins are so hard to purchase.  You either have to use a website and link your bank account and get verified.  I think Soon trezor will come out with their wallets which will essentially be a hardware wallet.  I know people on mastercoin forums are creating a cheaper alternative-- eventually the price of hardware wallets will drop quickly, considering the hardware is inexpensive and the software is open sourced.  

What if trezor or some other company began preloading the wallets with different units of bitcoins (1btc, 2 btc, 4 btc).  Of course the price would fluctuate from day to day depending on the exchange rate.  But I'm sure there could be some workable system.  Think of the possilbities.  Retail stores, websites, pawn shops.  Even gas station owners could sell bitcoin wallets and they are already use to fluctuating prices.  

What do you think of this idea?  

I love this idea.  Someone should set up a site with the Jan 1 2014 countdown to new millbit year. 

This is a bullish case for Bitcoin.

I think many on these forums are paranoid skeptics that the United States Federal Reserve would allow its monopoly to be threatened in any form.  Yes I fit within that circle too.  I think that case is true.  But in light of recent years, we've seen from the Tea Party, Ron Paul supports and some more fiscal conservatives, a larger conversation encompassing the enumerated powers in this country.  The conversation around the distrust of the Federal Reserve has been growing.  Its out in the open.  States are aware of it.  The Conservative states have been fighting for more state control and power.  Remember back in May when Arizona was the second state after Utah to legislate gold as legal tender?

http://www.zerohedge.com/news/2013-05-01/arizona-becomes-2nd-state-make-gold-silver-legal-tender


It wouldn't be hard for us to imagine, if the economy of bitcoin grows, some states may move to legislate bitcoin as legal tender -- or at least make laws that are more friendly to creating bitcoin businesses.  It brings jobs and taxes to the country.  China does this through Special Economic Zones.  Some day, states will take this idea and run with it.  Their goals would be to become special economic zones for bitcoin.  Remember at a local level, states work for their constituents.  They are more sensitive to their votership than those in DC.  They have to hear and work to benefit their state. 

We've seen this story previously.  In the beginning of Credit Cards, credit card companies were finding it very hard to establish themselves because of rules and regulations.  Then what happened?  South Dakota removed their restrictions, and Citibank moved their offices to the state and suddenly there was a boom in Credit Cards business within the state.  Soon, within a decade, other states saw the tremendous grow and soon followed suit in their laws.  I say this.  We as a community should be pushing the conversation in this direction.  To have these states dream.  To picture big that one day a global bitcoin tech company could spring its roots on their grounds.  We should be supportive of the states (and be less concerned about the federal government) to enact sensible AML/KNY laws, while at the same time positioning themselves to benefit from the new digital economy. 

In some ways or another, the United State's enumerated powers may be bitcoin's best friend.  Unlike the Federal government, we have the Ability.  WE CAN influence our state and local governments. 

A lot of digital payment systems dont have what bitcoin does.  Its global footprint.  I think third world countries and non western ones find more accessible to bitcoin because these other payment systems are using USD. 

That's incredible.  This has been a bad year for exchanges.  Now a bad one for user accounts. 

Hi