Author Topic: Roger Ver reveals prediction market project-- Truthcoin  (Read 7796 times)

0 Members and 1 Guest are viewing this topic.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
prediction markets without smart coins don't work.    The volatility of the underlying asset overwhelms any profit or loss made by predicting the outcome of the event.
That's what the multidemnsional msr is for. The interface can handle making it look like a dollar-denominated bet for a single event. There are disadvantages (you need to "sync" with usd price close time) but it's not nearly as bad as you're implying
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline sschechter

  • Sr. Member
  • ****
  • Posts: 380
    • View Profile
Truthcoin....what a shitty name.  What is this, 2013?
BTSX: sschechter
PTS: PvBUyPrDRkJLVXZfvWjdudRtQgv1Fcy5Qe


Offline bytemaster

prediction markets without smart coins don't work.    The volatility of the underlying asset overwhelms any profit or loss made by predicting the outcome of the event.

That's a slightly arrogant and profound statement. It's one thing to say "I think I have a decent solution X for problem Y". But to state "Unless you use my solution X, Y can not be solved" demonstrates a close minded mentality.

I used smart coins in the general sense... namely that they must be priced in a stable asset.    Apparently Truthcoin has something equivalent to smartcoins.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bitmeat

  • Hero Member
  • *****
  • Posts: 1116
    • View Profile
prediction markets without smart coins don't work.    The volatility of the underlying asset overwhelms any profit or loss made by predicting the outcome of the event.

That's a slightly arrogant and profound statement. It's one thing to say "I think I have a decent solution X for problem Y". But to state "Unless you use my solution X, Y can not be solved" demonstrates a close minded mentality.

Offline monsterer

However, if the market maker charges trading fees that go to the initial liquidity provider, then profit becomes very possible. In fact, since the loss is bounded, after some amount of trading occurs, the initial liquidity provider will break even and anything after that is pure profit. So if the initial liquidity

It all depends on whether the average trading fee exceeds the average loss per trade, I guess.
My opinions do not represent those of metaexchange unless explicitly stated.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline bytemaster

LSMR markets are a future feature that we will be creating a proposal to fund.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline arhag

  • Hero Member
  • *****
  • Posts: 1214
    • View Profile
    • My posts on Steem
  • BitShares: arhag
  • GitHub: arhag
Yes, there is certain amount of silence regarding 'blacklizard'... I asked the question in the last mumble but the question was quietly ignored by both BM and the host.

I think "Black Lizard" is just the code name for Graphene before it became Graphene. The more important thing beyond the name is how much of the (IMHO) really cool stuff discussed in those docs is actually part of the roadmap for Cryptonomex (meaning they are seriously planning to submit a worker proposal to implement after BitShares 2.0 has launched that they hope stakeholders will approve) and how much of it are ideas floating around among the devs that they haven't actually reached consensus on.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
First, UIAs should be allowed to elected managers the same way BTS can elect delegates. These managers would of course still have limited powers with what they could do with the UIAs.
This is already in BTS 2.0, can't remember what the position is called but they are basically UIA delegates.

I remember reading that in docs as well, but I don't know if those docs (see here and here) were credible or outdated or a wish list. Can we get confirmation from bytemaster on this?

Yes, there is certain amount of silence regarding 'blacklizard'... I asked the question in the last mumble but the question was quietly ignored by both BM and the host.

[edit] what I mean is - it is probably just  simply raw idea more than anything else of now. As for the host he has not even heard of it, I guess. No offence this is more or less not advertised or discussed anywhere.
« Last Edit: June 23, 2015, 07:23:28 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline arhag

  • Hero Member
  • *****
  • Posts: 1214
    • View Profile
    • My posts on Steem
  • BitShares: arhag
  • GitHub: arhag
I'm interested to hear how the LMSR performs in practice - I've read a report that says although it has bounded loss by design, in practice it nearly always looses.

Considering that it only profits if the outcome is contrary to what the market predicts at the very end, I would expect this to be true. The point of an LMSR is mostly that the initial liquidity provider is not doing it to make profit but rather altruistically for the good of getting accurate predictions on the question being asked.

However, if the market maker charges trading fees that go to the initial liquidity provider, then profit becomes very possible. In fact, since the loss is bounded, after some amount of trading occurs, the initial liquidity provider will break even and anything after that is pure profit. So if the initial liquidity provider is not creating the prediction market altruistically, they need to bet on whether their particular PM will generate enough trading volume to make back their investment.

Also, a liquidity sensitive LMSR is an improvement on regular LMSR that allows some fraction of the trading fees to instead go back into the liquidity pool. This means that with more trading the liquidity of the market automatically increases (slippage decreases).
« Last Edit: June 23, 2015, 07:06:55 pm by arhag »

Offline Bitcoinfan

  • Sr. Member
  • ****
  • Posts: 240
    • View Profile
prediction markets without smart coins don't work.    The volatility of the underlying asset overwhelms any profit or loss made by predicting the outcome of the event.

This statement shows why BM overlooked Truthcoin in the first place. He is unclear on how Truthcoin works or at least didn't spend enough time trying to do so.

This is false, and Truthcoin achieves stability through combintorial markets.   Truthcoin has Bitusd stabilitiy for any type of market as a core features. (See whitepper example 5 of paper 2 "The Power of Prediction Markets"  Also featured in Pauls blogpost, truthcoin.info.)  Not only that you can do all of this with Bitcoin.  This is a benefit because it is way ahead in terms of network effect. 

What bytemaster calls smart coins, Paul infers as dimensions.  Maybe the difference is time of expiration date versus continuous markets.  However the limitation of Bitshares 2.0 is that it can't do Bayesian type of Markets.  Baysian markets are a major feature of Truthcoin. 
« Last Edit: June 23, 2015, 06:47:39 pm by Bitcoinfan »

Offline Akado

  • Hero Member
  • *****
  • Posts: 2752
    • View Profile
  • BitShares: akado
Wouldn't it be possible to approach Augur to implement this in BitShares? Wouldn't it be easier? Don't we have more resources for them to build this on? Would be nice to have on article about how BitShares could implement prediction markets once 2.0 is launched (even during the test phase), maybe then it would be easier to either get Augur to join with is or to get some competition for them (which will end up surpassing it). It's just Augur has caused a lot of buzz and if it worked out on BitShares, with our smartcoins.. well, you can imagine
« Last Edit: June 23, 2015, 06:44:35 pm by Akado »
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline monsterer

I'm interested to hear how the LMSR performs in practice - I've read a report that says although it has bounded loss by design, in practice it nearly always looses.
My opinions do not represent those of metaexchange unless explicitly stated.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline Ander

  • Hero Member
  • *****
  • Posts: 3506
    • View Profile
  • BitShares: Ander
In other words, the noise/risk introduced by pricing a prediction market in a non-stable currency limits the market to only those who are willing to be long BTC or able to hedge their BTC position separately.

Good point. The longer the time until the close of contract the more noise is introduced by the volatility of BTC vs fiat.

...However, for those long BTC, this fact doesn't really matter.

A prediction market priced in BTC can ONLY be used by people who desire to be long BTC, but a prediction market with Smartcoins can be used by anyone. 

Given that some of the bets will last months, the volatility risk of BTC will be a big deal.

So we will have a better product. 
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline monsterer

In other words, the noise/risk introduced by pricing a prediction market in a non-stable currency limits the market to only those who are willing to be long BTC or able to hedge their BTC position separately.

Good point. The longer the time until the close of contract the more noise is introduced by the volatility of BTC vs fiat.

...However, for those long BTC, this fact doesn't really matter.
My opinions do not represent those of metaexchange unless explicitly stated.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads