Author Topic: A Call to the Truthcoin Prediction Market  (Read 30070 times)

0 Members and 1 Guest are viewing this topic.

Offline tonyk

  • Hero Member
  • *****
  • Posts: 3308
    • View Profile
Read the white paper! (several times) 
Great Idea! Well almost…

Let me get some things straight.
So the owners/voters try to guess what the others vote will be, and not what the actual outcome would be! Their incentive is vote with the majority not to guess correctly! If they want to gain by correctly predicting the outcome they must become traders! I.e. bet correctly not vote for the correct outcome.

The consequence of this is that their voting (as a whole, as a group) is completely unrelated to how well the market they are  supposed to care about performs. If they (as a majority) always get the prediction correctly or they are always wrong the actual (trading) market will perform as it wants- i.e. successfully or unsuccessfully based on totally unrelated factors (advertising, competition, fees etc) -all factors pertaining to the trading market itself.
Which leads to the logical question – Why  are they needed at all?
I have more points but let’s see if you will answer  this one first.

I understood my mistake. Disregard the above!
« Last Edit: April 30, 2014, 07:42:45 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2486
    • View Profile
any updates on this?
I am also curious about what is going on with this project.  Can anyone comment?

I am still working on the project in my free time, writing and reviewing my code for clarity and performance. Recently, I (finally) perfected Scaled Claims, which allow a PM to take on a final value between 0 and 1, which can be scaled and shifted to represent a price index such as the DJIA or a number of House of Representative seats (the two examples I used in the R code). I have yet to rewrite this in Python or document it. I also still have to write a FAQ and more clearly document the project's requirements.

For details of what I am working on, see the 'Pipeline' section of my GitHub ReadMe, which I update occasionally https://github.com/psztorc/Truthcoin#pipeline

One issue is the economic model. Should this create new currency units (in addition to creating shares)? I had originally planned to use Bitcoin, but this depends on the development of, for example, side chains / tree chains / whatever. I may use Bitcoin's UTXO set purely to gain network effects and testing (distributing the shares [not currency] to the developers [currently just me]).

Many individuals have expressed interest in the project via private message or email, including one developer here. However, no one has volunteered to do what is actually required, and commit a few weeks of undivided development attention. Currently, I am not comfortable hiring anyone, mainly because half-finished code is worthless.

Bitcoinfan indicated to me that Bitshares would be able to provide dedicated developers and/or funding-for-developers in exchange for proportional ownership of the project's shares, but I instead expressed the opinion that Dan would (understandably) be hesitant to fund something which might directly compete with his own project. While meeting with Dan, he indicated that he had not read the whitepaper/code/supporting-documentation, and that he would not be able to directly provide any funding. Nearly all of his questions were about how Truthcoin would compare to his BitsharesX + Feed(s) idea. I interpreted this as confirming my original expectations.

So I am not sure that there is any room for partnership, but Bitcoinfan remains very optimistic so I am leaving it to him to arrange.

I think the community has shown great interest in the project. When a few DACs are out and Invictus is a well recognized brand/company it will be much easier to hire developers. I'd like to see a collaboration!

Offline Stan

  • Hero Member
  • *****
  • Posts: 2908
  • You need to think BIGGER, Pinky...
    • View Profile
    • Cryptonomex
  • BitShares: Stan
I really don't think Dan ever meant to show that Bitshares would not want to help you guys because you're the competition. To the contrary I think the whole point here is that *any* value-adding DAC idea can find a win-win arrangement with bitshares.

The usual deal is you honor at least 10% PTS and 10% AGS and in return you get to use bitshares_toolkit and get the support of everyone in the community. This is something you might want to do anyway if you use snapshots for allocation - better than dropping purely on bitcoin's utxo set!

Pretty soon there should be several DAC engineers who might be willing to contribute more focused effort in exchange for more equity in the DAC. I myself am intensely interested in Truthcoin and my grant from Bitshares allows me to work on any DAC that honors the social consensus. It's just a matter of still being at school .p2p taking up more time at the moment. The bitshares landscape will also look much different once XT and then .p2p/Lotto are launched.

In other words, don't turn your back to collaborating just yet! We want you guys!

We are interested.

The main limitation is that Bytemaster is heads-down with his whole team working to get XT out the door.

Truthcoin is one of the more intellectually deep DACs and it deserves much more mindshare than is available at this particular instant in time.  Hopefully we can thoroughly review their proposal in the next few weeks.

Nothing stops this community from contributing to the vetting of the ideas and recruiting of talent in the mean time.

For what it's worth, we did issue their first bitshares.org email account yesterday...   :)
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
I really don't think Dan ever meant to show that Bitshares would not want to help you guys because you're the competition. To the contrary I think the whole point here is that *any* value-adding DAC idea can find a win-win arrangement with bitshares.

The usual deal is you honor at least 10% PTS and 10% AGS and in return you get to use bitshares_toolkit and get the support of everyone in the community. This is something you might want to do anyway if you use snapshots for allocation - better than dropping purely on bitcoin's utxo set!

Pretty soon there should be several DAC engineers who might be willing to contribute more focused effort in exchange for more equity in the DAC. I myself am intensely interested in Truthcoin and my grant from Bitshares allows me to work on any DAC that honors the social consensus. It's just a matter of still being at school .p2p taking up more time at the moment. The bitshares landscape will also look much different once XT and then .p2p/Lotto are launched.

In other words, don't turn your back to collaborating just yet! We want you guys!
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

  • Full Member
  • ***
  • Posts: 67
    • View Profile
    • Truthcoin
any updates on this?
I am also curious about what is going on with this project.  Can anyone comment?

I am still working on the project in my free time, writing and reviewing my code for clarity and performance. Recently, I (finally) perfected Scaled Claims, which allow a PM to take on a final value between 0 and 1, which can be scaled and shifted to represent a price index such as the DJIA or a number of House of Representative seats (the two examples I used in the R code). I have yet to rewrite this in Python or document it. I also still have to write a FAQ and more clearly document the project's requirements.

For details of what I am working on, see the 'Pipeline' section of my GitHub ReadMe, which I update occasionally https://github.com/psztorc/Truthcoin#pipeline

One issue is the economic model. Should this create new currency units (in addition to creating shares)? I had originally planned to use Bitcoin, but this depends on the development of, for example, side chains / tree chains / whatever. I may use Bitcoin's UTXO set purely to gain network effects and testing (distributing the shares [not currency] to the developers [currently just me]).

Many individuals have expressed interest in the project via private message or email, including one developer here. However, no one has volunteered to do what is actually required, and commit a few weeks of undivided development attention. Currently, I am not comfortable hiring anyone, mainly because half-finished code is worthless.

Bitcoinfan indicated to me that Bitshares would be able to provide dedicated developers and/or funding-for-developers in exchange for proportional ownership of the project's shares, but I instead expressed the opinion that Dan would (understandably) be hesitant to fund something which might directly compete with his own project. While meeting with Dan, he indicated that he had not read the whitepaper/code/supporting-documentation, and that he would not be able to directly provide any funding. Nearly all of his questions were about how Truthcoin would compare to his BitsharesX + Feed(s) idea. I interpreted this as confirming my original expectations.

So I am not sure that there is any room for partnership, but Bitcoinfan remains very optimistic so I am leaving it to him to arrange.

Offline Bitcoinfan

  • Sr. Member
  • ****
  • Posts: 240
    • View Profile
any updates on this?

I think this one of the most promising ideas in crypto - to get an anonymous prediction market bootstrapped is like bootstrapping trading reality, with all his up- and downsides.


Yes!  Thank you for your interest.  We have not received any commitments of developers or funding just yet.  Dan is waiting for us to send in some proposal documentation before we can proceed with the Bitshares Foundation.  Stay tuned! 
« Last Edit: April 26, 2014, 03:10:40 pm by Bitcoinfan »

Offline Gentso1

  • Hero Member
  • *****
  • Posts: 931
    • View Profile
  • BitShares: gentso
I am also curious about what is going on with this project.  Can anyone comment?

Offline nakaone

  • Newbie
  • *
  • Posts: 7
    • View Profile
any updates on this?

I think this one of the most promising ideas in crypto - to get an anonymous prediction market bootstrapped is like bootstrapping trading reality, with all his up- and downsides.


Offline Empirical1

  • Hero Member
  • *****
  • Posts: 884
    • View Profile
I still have some concerns about whether an anonymous, self-selected, majority is better than a majority of public trusted feeds and a prediction market that uses 2 out of 3 or 3 out of 5 feeds will provide better results. I am certain that 2 out of 3 trusted feeds is likely cheaper and more efficient.

May a million DACs blossom!

 +5% I think your solution will be cheaper & more efficient as you said, so in general I prefer that now.

There are some questions you can pose to a TCPM that you wouldn't be able to elsewhere, so it could develop its own niche and build from there.

I also think it could even be useful in Bitshares, occasionally a few loud voices, with multiple overly long posts, (which I've been guilty of too) can almost create a false community consensus on certain topics. Putting some community type questions to our own TCPM occasionally could be useful.

Offline CLains

  • Hero Member
  • *****
  • Posts: 2606
    • View Profile
  • BitShares: clains
Will the market care about whatever the optimal solution is? Look at Bitcoin.

Offline bytemaster

I had a good chat with the guys behind Truthcoin and have concluded the idea is likely sound from a technical perspective. 

I still have some concerns about whether an anonymous, self-selected, majority is better than a majority of public trusted feeds and a prediction market that uses 2 out of 3 or 3 out of 5 feeds will provide better results.  I am certain that 2 out of 3 trusted feeds is likely cheaper and more efficient. 

May a million DACs blossom!
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 AsymmetricInformation

  • Full Member
  • ***
  • Posts: 67
    • View Profile
    • Truthcoin
AsymmetricInformation, are you aware of the OP_RETURN issues Counterparty has (Mastercoin seems to have the same issue)? The discussion is all over the the Counterparty thread: Here are parts of it: https://bitcointalk.org/index.php?topic=395761.msg5815887#msg5815887

It is completely irrelevant. I wish I knew of a way to make this sound more respectful (I really do), over text/internet which can often make things sound harsh, but the fact that you are even bringing it up indicates to me that you probably don't understand Bitcoin, my proposal, or OP_RETURN really at all. It's like saying "Are you aware of the new laws against writing on dollar bills?" to someone who is trying to start the Chicago Board Options Exchange. I did mention OP_RETURN in the Implementation section of my paper in passing, but only for the sake of completeness in discussion.

Thanks very much for the replies!

My pleasure.

TRU seems a bit different to PTS in that regard as I understand in the moment. In TRU I don't see a lot of new trees but I see a lot of new branches that don't honour the original trunk.

Like say I owned 1% of the first TRU blockchain, then someone created a basketball sub-chain which honoured the base chain,
I would then own 1% of the Basketball sub-chain. But as I'm not particularly interested in voting on Basketball, I would sell my Basketball stake or it would slowly erode away (Through demurrage.)

After a year, the Basketball chain is working well and has gained a great reputation,  however the voting demand is too much so they decide to make some new sub-chains/forks and divide basketball up by the various divisions.

It seems if you wanted to make a sub-chain/fork that works the best and that basketball bettors would trust the most, the basketball division sub-chain would be better off honouring holders of the current Basketball Chain not holders of the original TRU blockchain from which it was originally forked?

I think you've hit on another weak area of writing. I realize now that I was thinking of the 'tree analogy' in time, with ownership equivalent at each fork-point, not a tree of permanent-ownership. So you'd want to own the earliest chain, and you could maintain ownership of it through time (by continuing to vote), and this is the way (not any other way) that you are connected to the trunk (the 'option' to own future branches). I think I need to clarify this a little more in the paper.

The bold part is exactly what I had in mind, in other words, but the tree analogy starts to get confusing after you've abandoned a branch (unlike in a real tree in which you can't do that, and if that branch catches fire or something the whole tree probably dies).

Offline Empirical1

  • Hero Member
  • *****
  • Posts: 884
    • View Profile
Thanks very much for the replies!


In some of your notes you suggested timelines of a couple of weeks for voting. Would it be fair to say this wouldn't be suitable to horse racing etc. where the events happen very fast, there are many of them and payouts need to be made fairly quickly.

The price will not fix at 1 or 0 until voting occurs, but it will converge toward one of those values as the event info is revealed (ie just as the horse wins). If voting is in two weeks, there may be some time-value-of-money/time-preference/liquidity effect, but shares of the winning horse could still sell for 99.0 or 99.9. Those buying at 99 would be Wall Street / banker types who pick up the shares purely to earn 2 week's worth of above-market interest on their capital.

So fast cashouts shouldn't be a problem.

Yes that makes a lot of sense. I can even see third parties advertising they use TCPM on the back-end but bettors might interact with an interface that is market specific and very user friendly with fast cashouts, all for a small fee but which still makes the process a lot cheaper than traditional betting plus with some new interesting options.

Another question, (I'm not 100% sure I understand the coin system exactly so apologies if this is wrong) but you say in your whitepaper, that

Quote
a) Any Bitcoin-user can trade on any prediction market without directly interfacing with Truthcoin at all.

Ie. The trading part is done in Bitcoin.

Trading uses the Truthcoin blockchain, but not the 'Truthcoins' themselves. This is probably my fault for relying on the word "directly", I'll put it on my edit list for v1.2.

It seems that if TCPM became a trillion dollar market, the real benificiary would be Bitcoin holders.

Hard to say. Truthcoin owners would be getting 1% of the trading volume. You are probably right, thus is the power of money's network effect.


Yeah 1% of a $Trillion trading volume would be $10 Billion, which is very lucrative.
However, yeah,  the coin that sucks up that $1 trillion volume, (The one the trading is denominated in) will benefit a lot I think.
I still can't clearly see the reason for not making a new TRU trading coin, (especially because the return on that new coin which would start from a very low market cap would be incredible & I don't think Bitcoin separates the ownership/control problem that much better.) but might just be me. I can be a bit slow on some things.

(Because even though the return on a specific TCPM blockchain would be higher by being a voter and owning truthcoin, a voter only has the capacity to vote on X amount of blockchains, so as the TCPM expands they will be selling or losing their stake (via demurrage) in various sub-chains whereas the Bitcoin holder would have a stake in all of them, because all of the trading volume would be denominated in Bitcoin. So IMO the current system does to a certain extent 'separate ownership from control' anyway? )

Actually, the vision for Branching is that all current owners will own all future branches (they will just sell or fail to use the TRU on branches they are disinterested in). It is actually quite a bit like ProtoShares, where PTS is the first branch. Of course, someone can "plant a new tree" by forking the project completely, which might be ideal for private firms, but for public PMs skeptics would wonder why they should trust you vs. something with an existing reputation. So there is an incentive to buy the earliest tree.

TRU seems a bit different to PTS in that regard as I understand in the moment. In TRU I don't see a lot of new trees but I see a lot of new branches that don't honour the original trunk.

Like say I owned 1% of the first TRU blockchain, then someone created a basketball sub-chain which honoured the base chain,
I would then own 1% of the Basketball sub-chain. But as I'm not particularly interested in voting on Basketball, I would sell my Basketball stake or it would slowly erode away (Through demurrage.)

After a year, the Basketball chain is working well and has gained a great reputation,  however the voting demand is too much so they decide to make some new sub-chains/forks and divide basketball up by the various divisions.

It seems if you wanted to make a sub-chain/fork that works the best and that basketball bettors would trust the most, the basketball division sub-chain would be better off honouring holders of the current Basketball Chain not holders of the original TRU blockchain from which it was originally forked?

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2486
    • View Profile
AsymmetricInformation, are you aware of the OP_RETURN issues Counterparty has (Mastercoin seems to have the same issue)? The discussion is all over the the Counterparty thread: Here are parts of it: https://bitcointalk.org/index.php?topic=395761.msg5815887#msg5815887

Offline AsymmetricInformation

  • Full Member
  • ***
  • Posts: 67
    • View Profile
    • Truthcoin
I think the thing I'm potentially most excited about is this -

Quote
Prediction Markets (PMs) can do more than predict the future. First, the mere presence of a PM-based forecast can conclusively end debates, prevent lies, encourage and protect whistleblowers, and provide decision makers with honest advice.


At the moment the MSM and politicians have a monopoly on truth or can at least obfuscate it enough to get away with things they shouldn't really be able to.

Not just them. http://earthobservatory.nasa.gov/Features/Wegener/


In some of your notes you suggested timelines of a couple of weeks for voting. Would it be fair to say this wouldn't be suitable to horse racing etc. where the events happen very fast, there are many of them and payouts need to be made fairly quickly.

The price will not fix at 1 or 0 until voting occurs, but it will converge toward one of those values as the event info is revealed (ie just as the horse wins). If voting is in two weeks, there may be some time-value-of-money/time-preference/liquidity effect, but shares of the winning horse could still sell for 99.0 or 99.9. Those buying at 99 would be Wall Street / banker types who pick up the shares purely to earn 2 week's worth of above-market interest on their capital.

So fast cashouts shouldn't be a problem.

Another question, (I'm not 100% sure I understand the coin system exactly so apologies if this is wrong) but you say in your whitepaper, that

Quote
a) Any Bitcoin-user can trade on any prediction market without directly interfacing with Truthcoin at all.

Ie. The trading part is done in Bitcoin.

Trading uses the Truthcoin blockchain, but not the 'Truthcoins' themselves. This is probably my fault for relying on the word "directly", I'll put it on my edit list for v1.2.

It seems that if TCPM became a trillion dollar market, the real benificiary would be Bitcoin holders.

Hard to say. Truthcoin owners would be getting 1% of the trading volume. You are probably right, thus is the power of money's network effect.

(Because even though the return on a specific TCPM blockchain would be higher by being a voter and owning truthcoin, a voter only has the capacity to vote on X amount of blockchains, so as the TCPM expands they will be selling or losing their stake (via demurrage) in various sub-chains whereas the Bitcoin holder would have a stake in all of them, because all of the trading volume would be denominated in Bitcoin. So IMO the current system does to a certain extent 'separate ownership from control' anyway? )

Actually, the vision for Branching is that all current owners will own all future branches (they will just sell or fail to use the TRU on branches they are disinterested in). It is actually quite a bit like ProtoShares, where PTS is the first branch. Of course, someone can "plant a new tree" by forking the project completely, which might be ideal for private firms, but for public PMs skeptics would wonder why they should trust you vs. something with an existing reputation. So there is an incentive to buy the earliest tree.