Bitpredict Update Thread

[kiba]

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.

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.

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.

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

[kiba]

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.

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

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

[Anonymous]

I predict great things for the prediction market 

[hugolp]

I predict great things for the prediction market 

I predict success for the prediction of the prediction market.

[harding]

who [confirms the outcome of a scenario] and distributes the coins?

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

[kiba]

who [confirms the outcome of a scenario] and distributes the coins?

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.

[TTBit]

who [confirms the outcome of a scenario] and distributes the coins?

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

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)

[jgarzik]

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

Well I hope we can at least agree that an assassination market would be wrong and to be avoided...

[FreeMoney]

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

Well I hope we can at least agree that an 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.

[ribuck]

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.

[kiba]

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.

[harding]

[...] say more than 10% disagree, the mod has the final vote (Kiba)

The funds are frozen until one outcome is chosen by people who represent 50% or more of the betting stake.

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

[Babylon]

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

Well I hope we can at least agree that an assassination market would be wrong and to be avoided...

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

[nelisky]

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

Well I hope we can at least agree that an assassination market would be wrong and to be avoided...

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.

[FreeMoney]

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. ;-)

[kiba]

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.

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.

[Anonymous]

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

Well I hope we can at least agree that an assassination market would be wrong and to be avoided...

It's ok if Obama does it....
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?

[kiba]

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.

[kiba]

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.

[kiba]

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.