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Introduction to Augur, an open-source, decentralized betting marketplace

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Re: Introduction to Augur, an open-source, decentralized betting marketplace

#121

Post by yellow_postit »

hendzen wrote: post #117
anoncoward111 wrote: post #112

Earlier quoted context omitted.

There is a much larger global prediction market that comes with its own set of nuances and quirks, and that of course is the stock market. You can even get involved with no fee at all through Robinhood, but you will have to fill out some annoying and potentially costly IRS forms. If I could paraphrase Charlie Munger, in the stock market, the only people who are successful long term are those who bet massive sums, ver…

Actually, there are also people [0, 1, 2, 3, 4, 5] who are very successful betting small sums (relative to their total investable capital), very frequently, on securities they believe are slightly over or under valued. [0] - https://www.rentec.com/ [1] - https://www.twosigma.com/ [2] - https://www.citadel.com/ [3] - https://www.mlp.com/ [4] - https://www.deshaw.com/ [5] - https://www.worldquant.com/

Depends deeply on the time period and this list is most likely due to survivor bias. See Warren Buffet's hedge fund bet as a good semi recent example.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#122

Post by camjohnson26 »

snarf21 wrote: post #80
ordinaryradical wrote: post #62

Misplaced hype. “Today, Augur had 30 active users and 123 transactions in the last 24 hours. The market cap is roughly $269.2 million. That means that each active user is now worth roughly $9 million.” https://mobile.twitter.com/lawmaster/status/1027188396291235...

Yeah, and the only real crazy stuff that happened was people put up "death" or "assassination" contracts. Famous person X will die in 2018.... The problem with decentralized betting like this is who is the authority that determines who the winner is. External and honest oracles are hard.

There was maybe one active assassination market and it didn't even have that much interest. The world cup and the current cryptocurrency markets were where most of the bets happened.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#123

Post by MusaTheRedGuard »

theptip wrote: post #77
somebodythere wrote: post #68

Earlier quoted context omitted.

You could hedge the value of ETH in fiat markets, or you could wait until Augur supports betting with Dai.

How would you hedge the value of ETH? I'm not aware of a way to short it.

Multiple ways to short ETH, as mentioned by another user. Including on augur itself!

See: https://augur-cfd.com

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#124

Post by gamblorrrr »

hedgew wrote: post #7

Augur will probably be used for betting but really it's a prediction market. https://en.wikipedia.org/wiki/Prediction_market Prediction markets are an interesting tool for determining the most likely answer or result for almost any question. Some economists hope that we could use prediction markets to make difficult political decisions. Many companies already use them internally. Sadly there's only one prediction mar…

So, what you’re telling me, is that the stock market, and indeed most of the underpinnings of modern economics is really a form of gambling?

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#125

Post by jonnycomputer »

rishav_sharan wrote: post #65
IMTDb wrote: post #51

Earlier quoted context omitted.

In direct democracy, you vote for what you want to happen. In a prediction market you vote for what you think will happen. The whole point is that a sufficiently large and diverse groupe of people is better at predicting the future using those system than an individual. Being able to correctly predicting the future can lead to better decisions.

Is there any well established study which outlines this? It feels very counter intuitive that masses are better at prediction than specialists of that domain.

Well, a simple average is a pretty reasonable ways to make predictions when you have no better information... like a regression model with 0 predictors.

But really the idea is more about a feedback mechanism in which successful predictors those who are successful at making predictions end up with more money to invest back into the market making more predictions. So its a weighted average of the masses, in which those who are successful predictors get weighted more heavily in virtue of their having more financial capital with which to invest. For that to work well, you really need a reasonable level of participation. Also, if the inputs from new participants continually outweighs those from experienced quality participants, you are not going to get good predictions. Also, you have to have a rock-solid mechanism to decide the market, or it will be gamed.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#126

Post by camjohnson26 »

flyingfences wrote: post #100
camjohnson26 wrote: post #59

Earlier quoted context omitted.

Why would anyone take the other side of that bet?

Because they don't think you're gonna go out and kill someone.

Still they would get low odds and the risk/reward ratio makes that a terrible bet since it would only take one accident to lose all your money. For like a 1% return.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#127

Post by chrisweekly »

rishav_sharan wrote: post #65
IMTDb wrote: post #51

Earlier quoted context omitted.

In direct democracy, you vote for what you want to happen. In a prediction market you vote for what you think will happen. The whole point is that a sufficiently large and diverse groupe of people is better at predicting the future using those system than an individual. Being able to correctly predicting the future can lead to better decisions.

Is there any well established study which outlines this? It feels very counter intuitive that masses are better at prediction than specialists of that domain.

Sorry, no citation handy, and this might be semi-tangential (more "wisdom of he crowds" per se), but I recall a study that reviewed those "guess how many jellybeans are in this jar" -type contests, in which the guesses' median value converged with the correct answer...

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#128

Post by the_cat_kittles »

camjohnson26 wrote: post #126
flyingfences wrote: post #100

Earlier quoted context omitted.

Because they don't think you're gonna go out and kill someone.

Still they would get low odds and the risk/reward ratio makes that a terrible bet since it would only take one accident to lose all your money. For like a 1% return.

if you think the odds of something happening are lower than the share price, you sell / short / buy "no". if you think they are more likely, you buy. the odds are 100% if you plan on killing someone, and surely some people will think its less than 100%. they will buy "no" shares because they think that its less than a certainty that someone is going to be assassinated.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#129

Post by CodesInChaos »

DennisP wrote: post #29
blanderman wrote: post #3

"In the summer of 2018, assassination markets became popular among bettors. If those markets are seen to incentivise people to take illegal action, Augur could be shut down completely."

I'm having a hard time seeing a way assassination markets are actually a good business model for assassins. If the prediction is tightly bounded (e.g. "Mr. X will be killed on Sept. 3, 2018") then you warn the victim. If the prediction is loosely bounded ("Mr. X will be killed within the next year") then the odds won't be nearly as good, since many non-assassins may bet in favor. The assassin will have to put up a la…

One possible way to implement this: Have on betting pool per person. When betting cryptographically commit to a time interval for predicted death time. After death bettors have limited time to reveal the time interval they bet on. Split pool among correct bets weighted by 1/interval-length.

Making it easy to hire an assassin anonymously is why I find privacy preserving coins like zcash scary, despite valuing my privacy highly.

Re: Introduction to Augur, an open-source, decentralized betting marketplace

#130

Post by gammateam »

drdeca wrote: post #88
gammateam wrote: post #78

Earlier quoted context omitted.

The thing I don't like about prediction markets is the capped liquidity. I want to put my money where my mouth is but then find out there is only 1 share to buy in the market. What I like about financial/forecasting crypto projects like Pareto Network is that there is no capped upside, and you can still determine the conviction some people have about an outcome A close runner up is Numerai, given that you can tell th…

I'm confused. With Augur, "complete sets" can, aiui, be created by anyone, so I don't see why there would be a problem with only one share being available? Unless I guess if you want to make sure the trade goes through immediately?

the problem is the limited amount of money one can make off of a random market.

makes it less appealing to some (or many) and less efficient in determining an outcome

yes assassin markets and popular political events can now be traded in the US even if the Augur company gets sanctions, but for everything else this is an inefficient system.

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