P2P – Augur May Become the Greatest Gambling Platform in History August 30, 2015 – Posted in: Bitcoin – Tags: bitcoin, gambling, p2p, peer to peer
An online gambling platform could do to the neighborhood bookie what electric refrigerators did to the ice delivery man.
Coming this fall, Augur will allow participants to wager money on any future event of their choosing. Software will set the odds, collect the bets, and disperse the winnings. The price alone should give Nevada sportsbook operators pause; an estimated one percent of every pot will go to keep the system running. The average vig today is about 10 times that.
Augur isn’t a full-fledged casino. You can’t play roulette or poker, and running lotto on the platform would be tricky. But it’ll be great for sports betting.
Here’s what’s truly novel about Augur: It won’t be controlled by any person or entity, nor will it operate off of any one computer network. All the money in the system will be in Bitcoin, or other types of peer-to-peer cryptocurrency, so no credit card companies or banks need to be involved. If the system runs afoul of regulators—and if it’s successful, it most certainly will—they’ll find that there’s no company to sue, no computer hardware to pull out of the wall, and no CEO to lockup in a cage.
This is new legal territory. If Augur catches on as a tool for betting on everything from basketball games to stock prices, is there anything the government can do to stop it?
Augur is a decentralized peer-to-peer marketplace, a new kind of entity made possible by recent breakthroughs in computer science. The purpose of these platforms is to facilitate the exchange of goods and services among perfect strangers on a platform that nobody administers or controls. Augur’s software will run on what’s known as a “blockchain”—a concept introduced in 2008 with the invention of Bitcoin—that’s essentially a shared database for executing trades that’s powered and maintained by its users.
Bitcoin’s blockchain was designed as a banking ledger of sorts—kind of like a distributed Microsoft Excel file—but Augur will utilize a groundbreaking new project called Ethereum that expands on this concept. Ethereum allows Augur’s entire system to live on the blockchain. That means the software and processing power that makes Augur function will be distributed among hundreds or thousands of computers. Destroying Augur would involve unplugging the computers of everyone in the world participating in the Ethereum blockchain.
If Augur is destined to become the cypherpunks answer to gambling prohibition—the betting man’s version of the online drug market Silk Road if you will—you’d never know it from talking with its developers. They work for a San Francisco-based nonprofit, attend conferences, have legal representation, and talk openly about what they’re up to with reporters. Augur even commissioned one of those cheesy motion graphics promotional videos favored by new tech startups.
Joey Krug, a twenty-year-old Pomona college dropout and Augur’s lead developer, never uses the world “gambling” to describe his venture. He and his team of five employees call Augur a “prediction market,” a term that emphasizes the information generated when a bunch of people have a financial incentive to feed their expertise into a sophisticated algorithm.
With Augur, as bettors move money in and out of the pot, the odds adjust. This yields publicly available statistics that should carry weight because they’re derived from the opinions of a crowd of people with a stake in the results. InTrade, for example, the best-known prediction market until federal regulators forced it to stop serving U.S. customers in 2012, beat the pollsters and pundits by foreseeing the outcome of the 2008 presidential elections in 48 out of 50 states.
Augur’s developers hope that their platform will make it possible to do a Google search to look up the likelihood of some future event. This could usher in a better world, with more informed policy decisions and less malinvestment.
But Augur also serves the less high-minded—though no less noble—purpose of providing cost savings and convenience to gamblers. Restrictions on gambling serve to protect government revenue at the betting man’s expense. State-sanctioned casino operators pay high taxes, and state-run lotteries fleece their customers. But there’s no logical or moral case for government restrictions on gambling, since no third party is harmed when consenting adults wager money on the future. Augur actually has the potential to make the world safer by taking away market share in the gambling industry from criminals.
To read more, check the source: GadgTecs – http://gadgtecs.com/index.php/2015/08/30/p2p-bitcoin-gambling-augur/