Author Topic: A Call to the Truthcoin Prediction Market  (Read 15572 times)

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Offline Empirical1

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Re: A Call to the Truthcoin Prediction Market
« Reply #15 on: April 01, 2014, 01:45:10 am »

As I made clear, my complaint was (exactly as you say) that he did NOT need to promote BitShares in my post, as it was sufficiently promoted elsewhere. Yet, he did write several paragraphs which were completely off topic, about the advantages of BitShares, based on a response I gave to someone's question about a comparison between Truthcoin and BitShares. I would have made the same complaint if Jesus Christ started talking about Christianity in my post.

Perhaps you feel threatened by the responses...I noticed no response to this sentence:
This isn't to say an alternative institution wouldn't have value, wouldn't aggregate information via trades, or wouldn't operate in a similar way (however, you cannot claim that BitShares will do these things "because it is a PM").

Either way, I'm proud of the fact that I never called anyone names, and I'm not here to talk to anyone who does.

You've quoted me as saying 'This isn't to say..." - But I never said that, I think you meant to quote yourself.

As for being threatened by your responses. No, I'm personally excited about most of them, I think there's a market for the BitsharesX model in the liquid constant markets and for yours in the event based markets. (Maybe more so than the trusted feed model if it works) It's easy enough to invest in both, so nothing to be threatened by as an investor.

I was dissapointed though by the responses I highlighted, for the reasons I've already given above & because I wanted you to be brought into Bitshares if your concept was promising.

Edit: Looking at other response to my post looks like I'm the one that over-reacted. So apologies for the name calling, compared to you guys I'm certainly the freaking dumb one in the room. & GL with the project!


« Last Edit: April 01, 2014, 02:15:19 am by Empirical1 »

Offline bitcoinba

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Re: A Call to the Truthcoin Prediction Market
« Reply #16 on: April 01, 2014, 03:32:17 am »
So Paul (or Bitcoinfan),

What would you need to roll your project into Bitshares assuming Bytemaster agrees to said needs?

I have a genuine interest in the develop of this type of business on this platform. Feel free to use PMs if the forum venue is too public.

I just think it would be valuable to know exactly it would take to get to the next step, and see what you and other potential DAC developers really want in order to combine forces.

Offline santaclause102

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Re: A Call to the Truthcoin Prediction Market
« Reply #17 on: April 01, 2014, 09:26:04 am »
Wow, I just read your thread on Bitcointalk! :o

Bitshares is all about helping to bring exciting, profitable DAC's to market. Bithshares, via AGS has already raised circa $5 million and PTS is valued circa $9 million, more importantly those funds come from a community of investors already in the thousands that are specifically interested in investing in and supporting DAC's. Besides BitsharesX and Keyhotee, they also already have 4/5 exciting projects in the pipeline. So IMO, if there's anyone whose attention you'd want to get that could both understand and then help in every aspect of bringing Truthcoin to market, it would be Bitshares and ideally, specifically, Bytemaster. 

So what do you do when you actually manage to attract Dan's attention and he goes out his way to interact with you, even unnecessarily prefacing his comment with...

"This is a good discussion and I do not want to derail the work presented in the OP as it is good work.   Here are some general concepts to consider:"

https://bitcointalk.org/index.php?topic=475054.40

Well somehow, you still managed to be so unbelievably freaking dumb (sorry but it's true) as to think that Dan would in a million years,  need to take time out of his very busy day to promote Bitshares on your 3 page bitcointalk post!?  ???  :o

"Mr Larimer, I respectfully request that you keep any comments you make here related in some way to Truthcoin. I do not feel that your comment sets a good example of relevance. I realize that you'd like to talk about your project, but you have whole websites for that and I just have this one thread."

"..it has nothing to do with Truthcoin and is therefore completely off topic." "Finally, as I already explained..."

"This reads like a BitShares advertisement, when my intent was merely to answer a question regarding a comparison. Truthcoin does not have margin calls and cannot force any trades, whereas BitShares can, as you restate here for some reason."

Personally I love the concept and think it has HUGE value if it works. But the fact that you've so poorly misjudged such a basic social interaction and showed such terrible business acumen in the process (by potentially slightly alienating one of your most influential leads) makes it hard to believe as an investor, that you've considered all the business/social variables that would go into making the concept work in practice. I do hope to be proved wrong though.
I did read too the bitcointalk post. Although I agree that Bytemaster was not promoting Bitshares it could be interpreted that way. I thinks tough  harsh  comments are unnecessary. This post it is about a project that seeks to work with 3I it is not a war of ideology. The bitcointalk post was meant to expose a different take on PM and it was a pretty interesting debate. Bytemaster will be the better judge if this project will work as a DAC or something else. I really hope it will.
 I did't not finish the whitepaper but this seems  very interesting, I'll will like to welcome  AsymmetricInformation in our community  those kind of ideas and brilliant people could only straighten our community and bring huge value like you said.

Didn't see the purpose of this post either. Collaboration is always welcome if it makes sense.  Might be a good fit there! 

Offline unimercio

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Re: A Call to the Truthcoin Prediction Market
« Reply #18 on: April 01, 2014, 10:33:51 am »
Wow, I just read your thread on Bitcointalk! :o

Bitshares is all about helping to bring exciting, profitable DAC's to market. Bithshares, via AGS has already raised circa $5 million and PTS is valued circa $9 million, more importantly those funds come from a community of investors already in the thousands that are specifically interested in investing in and supporting DAC's. Besides BitsharesX and Keyhotee, they also already have 4/5 exciting projects in the pipeline. So IMO, if there's anyone whose attention you'd want to get that could both understand and then help in every aspect of bringing Truthcoin to market, it would be Bitshares and ideally, specifically, Bytemaster. 

So what do you do when you actually manage to attract Dan's attention and he goes out his way to interact with you, even unnecessarily prefacing his comment with...

"This is a good discussion and I do not want to derail the work presented in the OP as it is good work.   Here are some general concepts to consider:"

https://bitcointalk.org/index.php?topic=475054.40

Well somehow, you still managed to be so unbelievably freaking dumb (sorry but it's true) as to think that Dan would in a million years,  need to take time out of his very busy day to promote Bitshares on your 3 page bitcointalk post!?  ???  :o

"Mr Larimer, I respectfully request that you keep any comments you make here related in some way to Truthcoin. I do not feel that your comment sets a good example of relevance. I realize that you'd like to talk about your project, but you have whole websites for that and I just have this one thread."

"..it has nothing to do with Truthcoin and is therefore completely off topic." "Finally, as I already explained..."

"This reads like a BitShares advertisement, when my intent was merely to answer a question regarding a comparison. Truthcoin does not have margin calls and cannot force any trades, whereas BitShares can, as you restate here for some reason."

Personally I love the concept and think it has HUGE value if it works. But the fact that you've so poorly misjudged such a basic social interaction and showed such terrible business acumen in the process (by potentially slightly alienating one of your most influential leads) makes it hard to believe as an investor, that you've considered all the business/social variables that would go into making the concept work in practice. I do hope to be proved wrong though.
I did read too the bitcointalk post. Although I agree that Bytemaster was not promoting Bitshares it could be interpreted that way. I thinks tough  harsh  comments are unnecessary. This post it is about a project that seeks to work with 3I it is not a war of ideology. The bitcointalk post was meant to expose a different take on PM and it was a pretty interesting debate. Bytemaster will be the better judge if this project will work as a DAC or something else. I really hope it will.
 I did't not finish the whitepaper but this seems  very interesting, I'll will like to welcome  AsymmetricInformation in our community  those kind of ideas and brilliant people could only straighten our community and bring huge value like you said.

Didn't see the purpose of this post either. Collaboration is always welcome if it makes sense.  Might be a good fit there!
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Offline Empirical1

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Re: A Call to the Truthcoin Prediction Market
« Reply #19 on: April 01, 2014, 03:25:20 pm »
Wow, I just read your thread on Bitcointalk! :o

Bitshares is all about helping to bring exciting, profitable DAC's to market. Bithshares, via AGS has already raised circa $5 million and PTS is valued circa $9 million, more importantly those funds come from a community of investors already in the thousands that are specifically interested in investing in and supporting DAC's. Besides BitsharesX and Keyhotee, they also already have 4/5 exciting projects in the pipeline. So IMO, if there's anyone whose attention you'd want to get that could both understand and then help in every aspect of bringing Truthcoin to market, it would be Bitshares and ideally, specifically, Bytemaster. 

So what do you do when you actually manage to attract Dan's attention and he goes out his way to interact with you, even unnecessarily prefacing his comment with...

"This is a good discussion and I do not want to derail the work presented in the OP as it is good work.   Here are some general concepts to consider:"

https://bitcointalk.org/index.php?topic=475054.40

Well somehow, you still managed to be so unbelievably freaking dumb (sorry but it's true) as to think that Dan would in a million years,  need to take time out of his very busy day to promote Bitshares on your 3 page bitcointalk post!?  ???  :o

"Mr Larimer, I respectfully request that you keep any comments you make here related in some way to Truthcoin. I do not feel that your comment sets a good example of relevance. I realize that you'd like to talk about your project, but you have whole websites for that and I just have this one thread."

"..it has nothing to do with Truthcoin and is therefore completely off topic." "Finally, as I already explained..."

"This reads like a BitShares advertisement, when my intent was merely to answer a question regarding a comparison. Truthcoin does not have margin calls and cannot force any trades, whereas BitShares can, as you restate here for some reason."

Personally I love the concept and think it has HUGE value if it works. But the fact that you've so poorly misjudged such a basic social interaction and showed such terrible business acumen in the process (by potentially slightly alienating one of your most influential leads) makes it hard to believe as an investor, that you've considered all the business/social variables that would go into making the concept work in practice. I do hope to be proved wrong though.
I did read too the bitcointalk post. Although I agree that Bytemaster was not promoting Bitshares it could be interpreted that way. I thinks tough  harsh  comments are unnecessary. This post it is about a project that seeks to work with 3I it is not a war of ideology. The bitcointalk post was meant to expose a different take on PM and it was a pretty interesting debate. Bytemaster will be the better judge if this project will work as a DAC or something else. I really hope it will.
 I did't not finish the whitepaper but this seems  very interesting, I'll will like to welcome  AsymmetricInformation in our community  those kind of ideas and brilliant people could only straighten our community and bring huge value like you said.

Didn't see the purpose of this post either. Collaboration is always welcome if it makes sense.  Might be a good fit there!
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Yeah it was very unnecessary, I regret it and in case I wasn't clear - Sorry AsymmetricInformation,  actually love the concept of the truthcoin project, I will be the first to invest in it, and really hope you geniuses here can collaborate on something and make it happen.

Offline AsymmetricInformation

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Re: A Call to the Truthcoin Prediction Market
« Reply #20 on: April 01, 2014, 04:04:15 pm »
You've quoted me as saying 'This isn't to say..." - But I never said that, I think you meant to quote yourself.

You're right, I used the forum's quote feature and forgot to erase the auto-fill.

Edit: Looking at other response to my post looks like I'm the one that over-reacted. So apologies for the name calling, compared to you guys I'm certainly the freaking dumb one in the room. & GL with the project!

Apology accepted.  I'm sort of glad I screwed up the quote now...evens things out a little.

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Re: A Call to the Truthcoin Prediction Market
« Reply #21 on: April 01, 2014, 04:11:50 pm »

A Call to the Truthcoin Prediction Market

To Bytemaster:

Let me start off by saying, I am a huge fan of what you are doing.  It’s clear to all of us on the forums, with each update you make, and each new development posting, each effort to answer a new member’s question, you are proving to us your commitment to the success of Decentralized Autonomous Corporations.  You are staying true to your creed of, “Creating something great that will be here long after we are gone.”

Executive summary

The Truthcoin project is seeking to work with Invictus Innovation as a collaborative project that will be synergic (non-competitive) with other companies in the DAC pipeline.  Truthcoins is a Decentralized Prediction Market Protocol that uses Singular Value Decomposition, a consensus correlation amongst Truthcoin holders at the maturity of a Decision Contract.  The correlated votes of Truthcoin holders determine True and False payouts for any matured Decision Contract.  Truthcoin Prediction Markets (TCPM) can act as insurance contracts, inventing new means for individuals to profit from their creative work, without restrictive legalities of patents and copyright.  A Decentralized Prediction Market can also function as an Executive Operational Management System for Distributed Autonomous Corporations.  Participants in DACs can create markets to predict the return on accepting an investment venture, or manage the hiring/firing of staff in a DAC in the same manner Human Resources or a Board of Directors would do in a Chartered Entity.  A last practical use of Prediction Markets is the ability to support crowdsourcing, micro lending by establishing a market for creditworthiness.  Publicly Funded projects like bridges and roads can be performed without the need for funds from municipalities.  Incorporation of Truthcoins into the Keyhotee Application (similar to Bitshares X) would support the DAC ecosystem. 

These new opportunities in predicting and hedging risk in any sector, would match the global success of the derivatives market, which is upwards of a $791 Trillion Market Capitalization.  Truthcoin holders would have a stake in this immense market by receiving the trading fees on the marketplace, providing the greatest wealth return for their shares. 

Introduction

As a long-time shareholder of Bitshares and an early member of the forums, I want to encourage Invictus to take a closer look into Paul’s work in the Truthcoin Whitepaper.  I personally know Paul, Asymmetric Information of Bitcointalk.org, and hold regular contact with him about his project.  I can say he is very passionate about the future that both crypto-currencies and prediction markets will bring.  Paul deeply understands statistics and forecasting.  The work with his colleagues at Yale (not a no sweat school either) and their input have allowed for his paper to be mathematically rigorous. I myself work within one of the country’s largest financial institutions in areas of predictive financial modeling and risk management.  Paul’s work is nothing short of remarkable.  This is an idea ahead of its time.

He has discussed with me the possibility of Decentralized Prediction Markets for over a year now, and we both knew this would allow for the formation of a Decentralized Autonomous Corporation—we personally had just called it “Decentralized Companies”.
We both see prediction markets as the next natural progression after Bitcoin, since it allows to people to bet anonymously (discouraging herding like on publicity traded stocks), and now because we have Bitcoin we can make financial instruments out of IDEAs.  Any idea we can conceive can become a financial asset; harkening back to the Internet’s promise of “Permission-less Innovation.”

Today, the combined global wealth of equities and stocks is upwards of $100Trillion.  $100 Trillion for a market that is highly regulated and saddled with enormous barriers to entry.  You and I simply can’t go to Wall Street and tell underwriters to IPO for us our company.  These gatekeepers will laugh, and then scold us for wasting their time, explaining that only companies in their league can afford the prestige of an IPO.  Even with gatekeepers at the door, a collective net wealth of $100 Trillion has crossed the threshold.  For a moment, think of how large a market for ideas could become.  Without the barriers to entry, the red-tape, the underwriting middle-men and empty-suit analysts, the wealth generated would be astronomical. 

You will hear me make this statement now, and continuously:  Invictus should look to implementing Truthcoins, because each AGS PTS owner will profit from it.  The Truthcoin holders will be able to earn on each and every single trade on this market through its consensus mechanism.  PTS and AGS holders, will earn profit from ballot submissions on each contract.  Some people on this forum will be able to make careers out of this.  Who could object to that?

Why Truthcoin protocol?
a) Singular Value Decomposition
Paul has prudently chosen the most favored statistical technique for evaluating the basis of consensus called Singular Value Decomposition (SVD).  SVD was discovered around 100 years ago and it can be said to be the pinnacle of linear algebra.  SVD is a useful statistical technique that has found application in: engineering bridges, measuring IQ tests, data mining large populations of research, aircraft design, gene data analysis, seismology, animation and digital imaging processing.  It provides the highest possible correlation, on lowest possible factors and is ubiquitously well regarded.  In a more recent cases, SVD was used to verify that Dorian Satoshi Natamoto’s writing style was not that of Bitcoin’s Satoshi Nakamoto. 

Here is a quote from Paul as to why SVD is not the equivalent of democratic voting:

“Firstly, the system does not use 'voting' to establish consensus, the consensus algorithm uses a SVD-modified weighed-vote for coin-owners only. Coin owners have the highest ROI when future trading is maximized, a proof-of-stake system. The most significant multivariate-outlier-voter loses the most coins in the following period, and has the lowest relative influence within the current period. When voters lose in this way, honest voters gain, so every single actor has an incentive a] to vote honestly, and b] to lie about their voting intentions, discouraging cartels. The (required) accumulation of several votes into a Ballot is also a powerful decentralizing factor.”

Each submission is akin to mining, strengthening the overall prediction market and prevents someone from cheating or frauding others.  This forced feedback system cannot be manipulated by a cartel of voters. 

b) Multi-Dimensional Markets
Byemaster has proposed for event based prediction markets, a system of competing data feeds, whose credit trust is based on market verification.  Those who fall below a market threshold price will not be included as a prediction market feed.  This concept has merits of its own, and I’m not against this type of validation—however the real question we should be asking is why is this centralized data feed market competitive at all?

Exporting data feed is a horrible business to be in. There are no reasons why you would want to be doing this. What would prevent someone from providing a good feed today, to accrue good standing with the market, and then sabotage it later on?  What’s the incentive of providing an honest feed?  The work is tedious and dull. There is no scope for consequences of your wrongdoings.  If the incentives are small, how will the market be competitive?  In any case, why pursue the message of decentralization, if we’re compromising on centralized feeds?
Additionally, Truthcoin strives to improve upon the primary idea of Prediction Markets with an idea called a Multi-dimensional market.  That is to say, you can create winner take all decision scenarios.  For example, as in Paul’s example, he has a large 4 by 4 matrix of the chances of the 2 2015 Jobs Act” Passed and Signed, and the chances of Unemployment <6% for April 2015.  (Look to Examples in  #3 in https://github.com/psztorc/Truthcoin/blob/master/docs/2_PM_Types.pdf

In a way, a multi-dimensional system, allows us to mesh together hundreds upon hundreds of variables, each time, revealing the risk with each additional one.  The system provides granularity.  This will be more accurate and offer greater precision to the narrative of what is actually occurring.  Today, as in the case Bitshares Prediction Markets, we can only doing statements that are single faceted, without room for enhancing with additional variables. 

Because Truthcoins, permits the ability to attach infinite possible scenarios, the features of multi-combinatorial decisions would be too cumbersome to implement with validation from centralized data feeds.  It appears counter-intuitive for a competitive market feeds to verify the exponentially growing and limitless combinations of just one decision.  With Truthcoins, we would like to defer to the Truthcoin holders, since they should act rationally as to maximize the future value of their coins, if they choose to sell it, or profit from the income streams.   

More examples on Multi-Dimensional Decision Contracts look at  https://github.com/psztorc/Truthcoin/blob/master/docs/2_PM_Types.pdf

The Benefits of Prediction Markets
a) Example Problem: Media Proclamations

Talking heads rule our perceptions.  Radio hosts, media outlets, blogs, and newspapers, what have it; inaccurately define public reality.
Their talk is convincing, because they are a tuned to the left hemispheres of our brains—the processing language centers. They have us believe that something is true, especially when they place importance on technicalities.  What the media doesn’t see has fitting their models, is convincingly cut off.  It simply does not fit.  What becomes, is an improper selection of information.  Thus we get into a trap. Paranoia and dramatized sound bites become prevalent; myths and pop-science flourishes.  The sensational and scandal list grows tall.  The dumbing down of scientific research for the media consumption—such as, research on serotonin has been shown to imbalance has been shown to cause depression—would allow media and their marketers to say new studies show eating ice cream and grilled cheese sandwiches helps fight depression. 

In our community this misinformation was evident when the famed Silk Road Dread Pirate Roberts was arrested by the police with some news outlets reporting things as egregious as “The creator of Bitcoin, Satoshi Nakamoto funded Dread Pirate Roberts”.  In our current left-hemisphere world, headlines proclaim all.  When these “facts” are debunked later—the damage has been done.  Prediction markets are needed to rein in this sensationalism. 

b) Solution: Empirical Consensus

Truthcoins Prediction Markets solves this at the core.   What Prediction Markets offer is a determination at what % these stated facts are True or False.  Prediction Markets can put a stop to these endless arguments.  If you disagree about something, make a Prediction Market for it.  Put your skin in the game.  In a post-Truthcoin era, those who make severe proclamations (such as the likes of Paul Krugman, Mark Williams, and Warren Buffet who see no value in Bitcoin) will be called to put up or shut up.  In this world, to be taken seriously, they should put their money and be held accountable to when their right or wrong.  We can say, “If they don’t, then why should their advice be heard?  If you, yourself aren’t going to put it on the line for what you believe, why should I?”

The same idea can be brought here on these forums.  On any forums, the loudest minority opinion can influence actions, thereby clouding the perceptions and understandings of new DACs.  Why deal with them and their arguments, when one can simply look on the prediction market to see empirically what consensus says.  By what percentage is it better to accept this idea?   Bitsharestalk.org, in more recent weeks, has had disagreements about what is the next single-best DAC.  Invictus can solve this problem by posing the question—Do you think DAC XYZ, DACABC, or DACPSP will produce the highest ROI by 2014?  Its easy to ask those vocal members on the forums (our future leaders), to publically reveal their bets made on the Truthcoin blockchain.  Their opinion, and the stake the hold in that opinion are symmetric.  From here we can see how this will allow Invictus and other DAC entrepreneurs to make a decision: the highest performing DAC on the prediction market should be adopted because the results show it will succeed.  The prices will contain the information of which DAC the community/ market believes will have the highest future value.

Low-cost Hedging for Research and Development

This same concept can be adopted to understand the future benefits of any investment project.  This has a profound impact in the R&D space.  A company or organization can create a Decision Contract with the statement:  The Invictus Mobile Phone will be the highest marketed phone in the United States by the end of year?  Or, Will the Invictus Mobile Phone exceed sales of $2MM for the year 2020. 

Non-Profit Organizations can create statements such as: Company’s X will develop a new product that will eliminate the cold virus by the end of 2035?

A company such as Tesla can hedge their bets on certain projects by creating statements like:  The new driverless Telsa will exceed X units globally in the year 2021?  Then Elon Musk can buy up shares that Tesla’s new driverless car will not exceed this many units for purposes of reducing downside risk.  Hedging will allow companies to take advantage of the high growth of their investment projects, and dramatically reduce the fallback if the project were to be a failure or below expectations.  Its an effective, low-cost insurance within any playing field. 

Patents and Copyright Material

Bytemaster has already touched on this several times.  Prediction Markets will bring in a new system of principals that will eliminate the need for patents and copyright laws.  Within the movie, music, and book publishing industries, Prediction Markets will allow the original authors to benefit from consumption of their work.  It will also reduce the costs of distribution by eliminating those “gatekeepers”.  For example, a new 15-year high school author, who has finished writing her book, has been having a hard time finding a publisher in the traditional markets.  They all don't like her book for whatever reason.  With a Truthcoin Prediction Market, the young author can upload his book onto whatever distribution channel she wants (decentralized Mediashares or centralized Amazon/ Apple bookstore) and write a Decision Contract that will say: “This book will exceed 500K purchased downloads on site XYZ by the end of June 2014.”  The young author can then purchase shares of Yes on the Truthcoin Prediction Market.  Afterwards, it becomes a win-win situation for the author and reader.  Any casual reader can download her book at low cost (.001 BTC micropayment as a spam filter) and the author can directly profit from those enjoying her hard work.  Bytemaster introduced this concept a few months ago as AP Shares, where there will be tradable shares for an article’s value.  This can also take place with Truthcoin, and is a much more simplified implementation, allowing the young author to underwrite and IPO tradable shares herself for people to buy, as opposed to a Yes or No Statement share.  These are just a few of the limitless possibility of the Truthcoins design in the Copyright and Patent field. 

Executive Management System for DACs

The Father of Prediction Markets, Robert Hanson spoke about the power of prediction markets to estimate the performance of CEO’s.  A PM can track the CEO’s performance with the statement: Will CEO XYZ still be in the job at the end of Q2 2014.  Yes and No will display his reputation.  Truthcoins are the beginning of a DAC Operations Platform.  For a DAC, the platform will have markets to self-regulate itself.  There will be an endless host of statements for the performance of the company

(See example 4 of Paul’s 2_PM_Types Github https://github.com/psztorc/Truthcoin/blob/master/docs/2_PM_Types.pdf). 

Statements will included: Will the CEO, VP, Marketing Director, Product Designer and Developer, COO, Supply Chain manager, or middle managers be fired at the end of 2015?  Whatever percentage results, will clue into the performance of that employee.  A high marginal percentage means that employee is doing their job properly.  And a low would be high chances unemployment.

This improves the current shareholder voting system we have in the traditional financial markets.  Smaller shareholders have little input overall, and if they did, it would be in only the trivial issues such as changing the guards (CEO’s) whenever the Earnings per Share are low.  Prediction Markets will allow those invested in DACs to macro- and micro manage their decentralized company.  It will numerate all types of risks across the board: Operational, Business, Political and Legal, Valuation, Project Risk, etc.  Transparency becomes ubiquitous at all levels, thus pushing the envelope for how DACs should be structured.  The markets, through prediction markets, will manage the talents and resources within Distributed Corporations, and make them effectively autonomous true to their value.

From here anybody can see what consensus believes is the best choice.  And unmanned companies can maneuverer accordingly.  Remember this is not voting consensus, but market empiricism.  Those who don’t believe the idea will work or the company will follow through.  This is the footprint for what DACs are to become.   


Prediction Market Based Reputational System

This should already bring thoughts of a Reputational Based system incorporating PM’s sometime in the future.  For example Credit scores and Probabilities of Default can all be extracted from a Prediction Market.  Today we rely on Credit Rating agencies such as S&P and Moody’s for their expert Credit Ratings for countries and corporations.  But humans are fallible.  We all saw in the 2008 crash that Moody’s had turned a blind eye to dangerous leveraging that was happening at the time.  The United States today still has an AA+.  Do we think the chances of the United States defaulting on its promises to be that low?

For the ordinary consumer, adopting Prediction Markets hold great promise for P2P lending, by sorting out that friction and high human overhead required for securing a loans from Financial Institutions.  It can be done with the statement: Will this person or small business get a loan at this time frame?  The percentage of Yes’s derived will say what the consensus thinks the users Credit Worthiness is.  This will gain traction within new businesses and DACs who want to create global lending clubs.  Community Based Development, publicly funded projects -- profit and nonprofit, i.e. Repairing or building a town bridge, would benefit immensely with this free market lending environment.  PM will be the roadmap to decentralized Governance, such as a Futarchy system

(What is futarchy -- http://hanson.gmu.edu/futarchy.html).

(More interesting PM applications https://github.com/psztorc/Truthcoin/blob/master/docs/3_PM_Applications.pdf)


Keyhotee and Prediction Markets

In our eyes, Keyhotee and TCPM are complementary.  TCPM benefits from Keyhotee’s user interface and multi-application wallet.  TCPM would be able to have Bid/Ask capabilities just like Bitshares, and can enable end of Decision Contract ballots on the already existing username system of Keyhotee.  Users can login into their Keyhotee account and periodically vote if a matured statement was correct or not. 

Over time, five years after the start of TCPM, we will be able to look through the blockchain and see which usernames were the strongest voters—the “experts” in their respective Truthcoin fields. The Truthcoin blockchain would be also a free, open-source, consensus verified dataset for everyone, from academics, to analysts, to researchers, students, to decision-markers to explore.

For Keyhotee, TCPM would open doors for a DAC platform—a means for operationally managing an unmanned DAC.  Keyhotee would establish itself as the iTunes of digital financial instruments, the application library for crypto-equities, i.e. small business IPO’ed coins, Movie IPO’ed coins, Bookcoins, Articlecoins, Pop Artist coin, etc. 

I heard enough!!!  What’s in it for us?

Since TCPM become equity derivatives of every idea in the world, the return on far surpasses a Billion-Dollar Industry.  We already know derivatives within current legacy banks dwarfs the size of the world stock market by an estimated $791Trillion to the 36.6 Trillion of global stocks.  Every PTS and AGS holder who votes in the system will get a piece of this pie. 

When implemented, prediction markets have the chance to impact every sector, industry, organization, political and education system in the world.  Built in a decentralized protocol, its adoption will be dramatic.  I strongly encourage Invictus to sponsor this project, as the payoff truly maximizes shareholder wealth. Paul has designed the TCPM in such a way to play a deep domain role within unmanned DACs.  The TCPM protocol is built on incentivizing security, proof-of-consensus, and builds on the very same notion Bitshares, by decentralizing the approaches to the problems that confront us in a top-down heavy paradigm.  Like the insurance contract idea, many early PTS, AGS holders will be able to make a career out of proof-of-consensus voting.  Truthcoin holders will have a steady stream of income from performing the required bi-weekly vote, their earnings coming from the pool of fees collected from trades in the decision market.  The more Truthcoins you have, the greater you’re earning power.

Remember, this is a market of ideas.  The only constrain is our imagination.  A resource that is infinite.  That is to say, as John Muer put it. “The power of imagination makes us infinite.”
For us, the powers of prediction markets are unbounded.  For a full read on Truthcoin Prediction Market look at: 

https://github.com/psztorc/Truthcoin/tree/master/docs

https://bitcointalk.org/index.php?topic=475054.0

-B



Let's fund this guy


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Offline AsymmetricInformation

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Re: A Call to the Truthcoin Prediction Market
« Reply #22 on: April 01, 2014, 04:31:50 pm »
So Paul (or Bitcoinfan),

What would you need to roll your project into Bitshares assuming Bytemaster agrees to said needs?

I have a genuine interest in the develop of this type of business on this platform. Feel free to use PMs if the forum venue is too public.

I just think it would be valuable to know exactly it would take to get to the next step, and see what you and other potential DAC developers really want in order to combine forces.

There's a simple sketch in Roadmap.xlsx in the docs/DevelopmentPlans of 'requirements', but I'm not sure that it will really be able to answer this question (although I hope to improve that Roadmap).

I refined the core idea for simplicity, to make it equal to a fork of Bitcoin with different block validation rules and a few different data and message types. It seems simple when I go over it in my head, but I've been programming long enough to know that it would probably still require guidance and consume a lot of skilled labor.

In addition to raw programmer time, we might require someone extremely familiar with Bitcoin itself. Not only is the design similar, but I'm not yet convinced that it is safe to stray too far from the established Bitcoin path.

That said, the reputation-coins have to be distributed at start, and earn money as the network performs, so it seems logical to distribute them to the individuals who worked to create the network. Its complicated, though, if two or more groups want to help, or someone wants to help and then drops out (and their code is unusable), etc. I'd hate to make any promise I couldn't keep, or ask anyone else to do the same.

I think its a hard question to answer. Maybe you can suggest some answers (if we aren't getting anywhere).

Offline toast

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Re: A Call to the Truthcoin Prediction Market
« Reply #23 on: April 01, 2014, 04:38:32 pm »
Those needs seem like exactly the point of the toolkit... It's essentially an altcoin template where you plug in your own validation rules and tx types. Not as battle-hardened as bitcoin obviously. PTS/AGS is a (possibly partial) solution to the distribution problem you are trying to solve. That could be done even if you don't use the toolkit and stick with bitcoin.
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 AsymmetricInformation

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Re: A Call to the Truthcoin Prediction Market
« Reply #24 on: April 01, 2014, 04:49:51 pm »
Quote

Here are the challenges I see:
  a) With SVD you need to keep peoples individual votes secret and this is a challenge for a DAC
  b) Someone with a large stake can swing the consensus and pull everyone to his position.
  c) On a DAC there is no way to recognize individuals and track reputation (required to punish them in the future)


I will take a shot at addressing B and C, as A is really out of my realm of technical expertise. 

You only need to seal them while voting, as an anti-cartel measure (this prevents credible communication and ensures that voting is always a symmetric coordination game). You unseal them over the next week (or whatever), and track a parameter called 'cumulative participation' to see if blocks are censoring or innocently missing unsealed votes...chains with censored block become invalid.

Even with 49% of the stake, you are powerless to swing the consensus. Other people can claim to join your coalition, putting you over 50%, but because the votes are encrypted, and they stand to gain by betraying you, you can't believe them. One perfectly-coordinated group of >50% is required. If the group is completely uncoordinated (votes randomly), even if such a group comprises 70% or 80% of the total votes, the more-coordinated minority will win through and ensure that the network becomes accurately aware of the market outcomes. Traders wouldn't even notice.

With 51%, however, you can wreck pretty much everything. However you would stand most to lose, and unlike Bitcoin, the project could be easily restarted (possibly with slightly more centralization of the reputation).

For c, in this blockchain the 'Coins' *are* reputation.  There are basically two coins at once (although the network-currency "Bitcoin" are just inputs in a signed message to the market maker). Then they are 'withdrawn'. This withdraw thing is a little complicated, but some people on Bitcointalk helped me with several possible solutions, which are in the Implementation Details section.

Offline Empirical1

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Re: A Call to the Truthcoin Prediction Market
« Reply #25 on: April 01, 2014, 08:15:14 pm »
I just finally got round to finishing the whitepaper, great stuff.

I loved how you explained how the forks would work as the market expanded, makes perfect sense.

Quote
What is possible, however, is to fork the project to half the future judging activity
required on each of the two new blockchains. This could be done for simple reasons:
because Voters are fatigued at the number of Decisions they are asked to vote on, for the
sake of increased competition, or to charge different fees. More interestingly, forking
could change the quality of the Decisions accepted within that blockchain, for example to
create “Truthcoin Sports” or “Truthcoin Finance”. By forking off a new blockchain, all
previous Owners would maintain their old Truthcoins (and with them the voting
influence of their established reputation), which means that the established trust of the
system would be upheld in both the new and old chain. Eventually, some Owners would
sell, or simply not use, their coins of a disliked chain, and “Truthcoin Sports” would
eventually be owned by individuals especially interested in sports. When “Truthcoin
Sports” later splits itself into “Truthcoin Sports:Basketball” and “Truthcoin
Sports:NonBasketball” (because, for example, there are just so many basketball Markets),
the reputable sports fanatics owning Truthcoin Sports (and no other Truthcoin Owners)
will have their voting power transferred to the two new chains. Therefore the network
grows organically, branching in the same way that a healthy tree splits new branches
when the environment can support them.

My only other inputs or concerns are the following, apologies if they've been addressed elsewhere.

1. It seems you have to expose your private keys when you want to vote, I think there may need to be some alternative to this.  (I know NXT has very low 'forging' participation rate, a) because the incentives are low but b) because users don't want to frequently expose their private keys to potential keyloggers etc.)

2. Have you considered a fail-safe dispute resolving mechanism?

I know you are confident that it is unlikely the TCPM will ever judge an outcome inaccurately even in thin markets but there is always the possibility that an error would occur. (Admittedly I don't understand all the maths, but personally I can see the potential that only a small % of total voters may end up voting for certain events, enough so that in small markets, a cartel may be successful. (I can see that the cartel would only be destroying the value/integrity of Truthcoin, (ie. their own holdings) but it's possible this may be their aim, eg. 'TPTB')

So what if for a few minutes after the outcome of an event is announced it is possible to lodge a dispute?   

However to lodge a dispute is INCREDIBLY EXPENSIVE and if you're wrong you lose the funds you committed to it. 

Eg. Truthcoin declares X won the race, when really Y won the race. (As in definite manipulation has taken place.)

The people who lost money on the outcome will obviously be willing to commit lots of funds to having the decision overturned if they are certain it has been manipulated and perhaps there is also an incentive for others to dispute a manipulated outcome too. 

So lets say with a few minutes, a threshold of say $25 000 of Truthcoins in total has been committed to the dispute box.  (Perhaps if X amount is reached, say $10 000, a dispute isn't lodged but the dispute time is extended to allow the dispute funding threshold to be reached.)

As a dispute will be such an unlikely event, if Truthcoin works as described. When there is one, we can have a 'special alarm/alert' go out over the entire network. Then nearly all (or a lot) of Truthcoin voters will then be drawn to vote in the dispute a) to protect the integrity of Truthcoin and b) The financial incentive for voting correctly in a dispute can be made much higher than a normal vote.

Having a dispute option and such a high % of the network participating in a dispute, would ensure there was no point trying to manipulate a thinly voted event.

If the people who lodged the dispute are right they get their funds returned plus a premium (that incentivises people to lodge disputes for false results) if they lose the dispute they lose the funds they committed to the dispute. (Enough to incentivise people never to dispute an accurate outcome.)

Just the presence of the fail-safe should ensure a cartel don't try to manipulate a small/thin market and also provide re-assurance to people who are sceptical of Truthcoin being 100% efficient.  (Perhaps it can be removed after a while if it is proved that it is never needed)

Offline CLains

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Re: A Call to the Truthcoin Prediction Market
« Reply #26 on: April 01, 2014, 08:24:33 pm »
Welcome AsymmetricInformation and Bitcoinfan!

This is super interesting, and I really hope you guys work something out with the Bitshares community. In think it's an awesome fit.

AsymmetricInformation, you said somewhere that you didn't believe BitUSD would peg to the dollar back then. What do you think now?




Offline Empirical1

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Re: A Call to the Truthcoin Prediction Market
« Reply #27 on: April 01, 2014, 09:49:49 pm »
In Truthcoin's current form, do people bet using Bitcoin and pay a trading fee that gets paid to Truthcoin holders or do they buy Truthcoin and use that to bet?

I was thinking, (Sometimes I write without thinking as you've noticed), wouldn't it makes sense to have POS Truthcoin Betting Stock and POS Truthcoin voting stock?

If you wanted to make a bet you would buy betting stock, when you made a bet you would pay a trading fee and there would be a small monthly demurrage.

If you wanted to be a voter you would buy voting stock. You would receive trading fees and the betting stock demurrage fees, however in voting stock there is a big penalty (demurrage) for not actively participating in a lot of voting.

That way you can have lots of busy investors investing in Truthcoin via betting stock (The more popular the network becomes and the more investors and bettors/traders it attracts the more the betting stock would be worth.)  while lots of people especially in poorer countries, E.g India  could make a living voting almost full time and holding the voting stock.

If you made them just one stock, then it discourages people from investing who aren't willing to be active voters & eliminates a big part of the market unless you make the demurrage low but then the incentive wouldn't be high enough to be an active voter.
« Last Edit: April 01, 2014, 09:52:40 pm by Empirical1 »

Offline Bitcoinfan

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Re: A Call to the Truthcoin Prediction Market
« Reply #28 on: April 02, 2014, 12:39:36 am »
Welcome AsymmetricInformation and Bitcoinfan!

This is super interesting, and I really hope you guys work something out with the Bitshares community. In think it's an awesome fit.

AsymmetricInformation, you said somewhere that you didn't believe BitUSD would peg to the dollar back then. What do you think now?

I'm a huge advocate for Bitassets and Bitshares.  If we find things weren't going according to Invictus's plan, at worst, Paul and I have found a elegant fix using the Truthcoin protocol as periodic feedback loop.  Its another one of the merits possible from Truthcoin.  By sponsoring this project, we would all effectively be hedged against the downside risk.  Certainly in the best interest of the forum members. 
« Last Edit: April 02, 2014, 12:51:32 am by Bitcoinfan »

Offline AsymmetricInformation

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Re: A Call to the Truthcoin Prediction Market
« Reply #29 on: April 02, 2014, 01:18:08 pm »
These are good questions, much better than I expected.  (I expected people to not even read the paper, and make all kinds of wrong claims about the accuracy or desirability of PMs).

1. It seems you have to expose your private keys when you want to vote, I think there may need to be some alternative to this.  (I know NXT has very low 'forging' participation rate, a) because the incentives are low but b) because users don't want to frequently expose their private keys to potential keyloggers etc.)

I don't know a lot of crypto, there probably is a better way of doing this. Of course, by the time you expose that key, it is useless, but I agree that automated (or even manual) exposure of private keys is inconvenient and a risk. There needs to be a way to encrypt the votes in a way that they can't be decrypted by anyone else, if there were nothing at stake individuals could publish the decryption key and allow other people to read their votes, which would weaken (and complicate) voting strategy in a number of ways.

2. Have you considered a fail-safe dispute resolving mechanism?

Yes I have. In the ancient past, one can observe these lingering notes in line 237 the original R code:

Quote from: https://github.com/psztorc/Truthcoin/blob/40b859cc3d396af3e2ab068be3f23c8312db6e4b/lib/consensus/ConsensusMechanism.r
#Voting Across Time
#Later Votes should count more
#! ...simple change = ConoutFinal becomes exponentially smoothed result of previous chains.
#! require X number of chains (blocks) before the outcome is officially determined (two weeks?)

# Will need:
# 1] Percent Voted
# 2] Time Dimension of blocks.

But I later decided it wasn't worth it. I don't remember all of the reasons for that decsion. Clearly, it would take more time. I was thinking an average across outcome-results, with later results counting more (as manipulators are short term). However, I reasoned that, if the first outcome were 'wrong' the total smoothed outcome would now be more likely to be wrong than right. In a way, it unseals some of the votes in advance, disrupting the coordination game.

If the dispute completely replaced the old outcome, then I think I was also worried that attackers would abuse it by endlessly lodging disputes, but you might be on to something there by making it expensive. I'm not sure the benefit of this outweighs the cost, however.

Although the entire incentive scheme is designed on off-path reasoning (if people lie, if people refuse to vote), the Nash Equilibrium has everyone voting on all the outcomes [market depth & market price are irrelevant] on their branch (this is a major reason for branches...too much work for voters). I really do expect participation to be nearly 100% all the time, particularly in the medium to long run.

In Truthcoin's current form, do people bet using Bitcoin and pay a trading fee that gets paid to Truthcoin holders or do they buy Truthcoin and use that to bet?

Yes you've missed this part:
For c, in this blockchain the 'Coins' *are* reputation.  There are basically two coins at once (although the network-currency "Bitcoin" are just inputs in a signed message to the market maker). Then they are 'withdrawn'. This withdraw thing is a little complicated, but some people on Bitcointalk helped me with several possible solutions, which are in the Implementation Details section.

Check the Appendices for how I punish people who refused to vote. This will have to be **clearly** explained to shareholders (as if a large proportion of them do nothing, their shares will actually start to disappear). One could design a class of 'owner-only' shares, but this separates ownership from control, introduces agency cost, and otherwise threatens the model. My research into the financial history of this planet indicates to me that separation of ownership from control produces something permanently unworkable. Bitcoin miners control Bitcoin, and are paid in Bitcoin. Bitcoin owners can only destroy their own Bitcoin. Perfectly logical.