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General Discussion / Truthcoin: Decentralized Bitcoin Prediction Markets
« on: February 25, 2014, 04:55:24 am »
Dan, take a look at:
Haven't read through yet but looks interesting. Someone brought up BitShares in the thread, and the author replied:
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Abstract. Where Bitcoin allows for the decentralized exchange of value, this paper addresses the decentralized creation and administration of Prediction Markets (PMs). An alternative proof-of-work blockchain collects information on the creation and state of PMs, with the winning state of a market determined by a modified weighted-vote. An incentive mechanism attempts to guarantee a) that all voters vote honestly, and b) that PM-creators act as entrepreneurs, bearing the economic costs and benefits of the PMs they create. Bitcoin users can create PMs on any subject, or trade anonymously within any PM, and all PMs enjoy low fees and infinite market liquidity through a LMSR market maker. Scalability and customizability can be achieved via ‘branching’ (controlled-fork). The paper closes with a discussion of implementation details.
Haven't read through yet but looks interesting. Someone brought up BitShares in the thread, and the author replied:
Quote
Quotewhat is the difference to new bitshares approach? - read their (new) whitepaper and for it sounds like a very smart system of implementing prediction marketsJust from glancing at it now, it seems that BitShares would be for a continuous price/time-series on an asset that we expect to never be removed from popular exchanges such as the DJIA, Oil, Gold, whereas Truthcoin is for binary (settling in finite time at 0 or 1) events which do not have to exist anywhere else.
From what I can tell, BitShares is actually not a prediction market. How I can use BitShares to bet on the Election of Hillary Clinton as US President in 2016? How do I collect money if I am correct? etc.
Instead it appears (and claims) to be a fully collateralized bank for paper assets, using a custom currency they can suck away from you. Debt seems to be created with every transaction so it will be interesting to see how stable these markets are.
