As the Bitcoin community struggles to reach an agreement on the block size, the shortfalls in the current consensus mechanism are becoming apparent with politics, community infighting and “whiny rage-quitting.” So how can the Bitcoin community know that the information available in the wild is accurate? Could prediction markets, i.e. Bitcoin futures, aid the decision-making process for the world’s first decentralized currency and help fix its “troll problem”?‘Listen to the Market’
Online forums, social media, the press currently all serve as loudspeakers for the most opinionated and outspoken Bitcoiners. But this hardly paints the entire picture and results in some information being relegated if not censored, while other viewpoints get pushed to the forefront.
“All the controversy does is generate a huge amount of uncertainty, scaring away new entrants, as well as causing existing investors to reconsider the wisdom of their investment,” opines BitGo CTO Ben Davenport.
This, of course, is a valid point as the biggest aversions for any investor – or holder in Bitcoin’s case – is uncertainty and doubt. Users are understandably fearful of the risk that their coins will depreciate as holders sell in panic following a loss of confidence in their perceived value.
“[Miners] want to mine the coin which will provide them with the greatest return on their investment,” he writes. “The problem is, miners don’t have a price with which to make a decision.”
Davenport argues that a possible solution to the block size issue could be the introduction of a price discovery mechanism for miners so that they could choose to secure or “vote” for the most lucrative chain. This method would involve two different versions of a coin that will exist following a fork, where the holders can decide which to buy and sell. It would also grant voting abilities to the holders of bitcoin, albeit indirectly. However, the problem is that this could only work if the miners get a price signal before a fork actually occurs and these “futures” do not yet exist in the Bitcoin space.
Davenport writes:
Clearly, these assets cannot be delivered today, so what we’re talking about is a futures market or prediction market. Any Bitcoin exchange could theoretically make such a market.
Read more :
https://news.bitcoin.com/bitcoin-futures-better-solution-block-size-troll-problem/
