[2015-03-03] insidebtc: Multiple Teams Creating Bitcoin-based Prediction Markets

[LiteCoinGuy]

Multiple Teams Creating Bitcoin-based Prediction Markets

When I asked Sztorc about sidechains more directly, he was quick to admit that he’s “very excited” about the concept. He went on to describe his discontent with many of the projects that are attempting to create new tokens of value around some new kind of blockchain-based application:

“I think the 2.0 space has, frankly, screwed up the 1.0 space by distracting talent, diverting money, misallocating infrastructure, and — most of all — confusing our message to the public (regarding bitcion’s ability to store value, as the unique Internet money). People want to try “the cool, new, internet-money” they heard about on the news, not participate in some ultra-technical, lifestyle-consuming grand-software-experiment for nerds. When we started all of these 2.0 projects, we stopped giving people what they were really ready for, what they really wanted (Bitcoin 1.0).

http://insidebitcoins.com/news/multiple-teams-creating-bitcoin-based-prediction-markets/30429

[RodeoX]

Oh this is interesting. I made a bunch in the prediction markets of intrade. They eventually ran into legal uncertainty in Ireland,where they are based. For those not familiar with prediction markets they pay out based on ones ability to predict events. Events could be geopolitical, election results, anything that can't be known. At intrade it worked like this:

1. A "contract" is created with a statement that can be factually determined on a certain date. As an example it could be "Bashar Al-Assad will be out of power on Jan.1 2016".

2. The contract has a value that ranges from $0.01 to $9.99. The higher the price the more people are betting it will be true. So a contract worth $6.00 is basically a statement that the market thinks there is a 60% chance.

3. The price goes up and down as the date approaches. So the earlier you correctly predict the more money you stand to gain. You can also mitigate your losses by dumping contracts that are looking less likely. When the final date arrives the contract will be worth $0 or $10 depending on whether it came true or not. The difference between what you paid and the final price is what you make or lost.

[CIYAM]

The real problem with such things are the "oracles" needed to be trusted to "publish the results".

Once we have elections actually running on blockchains then you'd have a much better system.