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Augur May Become the Greatest Gambling Platform in History. Is There Anything the Government Can Do to Stop It?

A blockchain-based prediction market that won’t be controlled or managed by anyone.

Sports betting in Vegas |||Creative CommonsAn 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.

About half of the roughly $600,000 raised by Augur's development team comes from Joe Costello, the successful tech entrepreneur who was once Steve Jobs' top pick to become the CEO of Apple.

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.

Joey Krug, Augur's lead developer.YouTubeAugur’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.

And yet sports betting is illegal in most states, and prediction markets are tightly regulated by the Commodity Futures Trading Commission (CTFC). The agency sued Ireland-based InTrade in 2012 to prevent it from accepting bets from U.S. customers. (The company folded shortly after.) In 2013, the CFTC and the Securities and Exchange Commission (SEC) jointly sued the prediction market Banc de Binary for allowing U.S. customers to make bets on commodity prices.

The CFTC has approved other prediction markets, such as the New Zealand-based PredictIt, but only after it agreed to abide by the agency's restrictions.

Krug says the Augur team is planning to meet with CFTC staff go over how their system works before it’s launched, but says he's not overly concerned. “Our friends in Washington, D.C. say the CFTC will probably just dismiss Augur and say it’s not a big deal,” Krug told me in a phone interview.

That doesn’t sound like much of a legal strategy, but how do you have a legal strategy when you're building something unlike anything that's ever existed? Federal anti-gambling laws, such as the 2006 Unlawful Internet Gambling Enforcement Act, target the companies that facilitate online betting— website operators, credit card companies, banks—not individual gamblers.

Augur’s biggest legal vulnerability is the community of human “reporters” who are needed to settle bets on the platform, says Cardozo Law School's Aaron Wright, who is writing a book about the legal implications of blockchain technology. Let’s say a group of people wager money on Augur over the outcome of a boxing match. Once the bout is over, human participants (who receive a portion of the trading fees as compensation) must report the outcome to the system before Augur’s software will disperse the money to the winners. "There’s at least an argument that the people doing that reporting are aiding or abetting unlicensed options and could be prosecuted," says Wright.

But Augur doesn't collect personal information on any of its users, so identifying these people could be difficult. And Augur is a borderless technology, so U.S. gamblers could simply rely on foreigners to report on the outcomes of their bets.

One attorney I spoke with suggested that the team that’s building Augur could be brought up on charges for aiding and abetting a criminal conspiracy. Nate Cardozo, a staff attorney with the Electronic Frontier Foundation, thinks that's far-fetched but says he can't rule it out. Cardozo emphasizes that writing open source software doesn’t necessarily protect the team from prosecution.

“We’ve taken the steps that we need to take in order to bracket the individual's risk and the organization’s risk,” says Augur’s attorney, Marco Santori, who declined to comment further on exactly what those steps might entail.

Even if Krug and his colleagues were to face criminal prosecution, the technology would live on. After Augur is born into the world, the development team could release a software update that would cripple the system. But in that case, Augur's users could band together to block any changes to the underlying code, or another developer could copy the open source code and simply re-launch the platform. 

The big question with Augur—and with blockchain platforms more generally—is whether they can outrun our regulatory state long enough to grow so large and popular that they're truly unstoppable. My money’s on Augur in that race.

For more on the promises and pitfalls of decentralized peer-to-peer marketplaces, read my recent Reason magazine feature story on the topic.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Mike M.||

    Thanks, but no thanks. I think I'll just stick with Bovada.

  • commodious spittoon||

    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,

    Perhaps Joey Krug can by the next Ross Ulbricht, too.

  • ||

    Most prediction markets aren't gambling (for one there's no bookie and the market sets pricing). For example, the only prediction markets I intend to create are some bug bounty ones, which are perfectly legal markets and maybe some futarchy markets about development decisions for Augur. Now if someone wanted to create say a sports market on augur, they'd have to make sure they were following the proper regulations in their jurisdiction, otherwise, since they were operating a market, they could be violating U.S. gambling law or CFTC regulations (if it were say a market on US presidential elections). There's no reason regulators wouldn't be able to go after market makers violating laws. It might not be easy to do it naively, which is why going after exit and entry points (similar to Bitcoin regulations thus far) is probably the better approach

  • some guy||

    Of course, Joey. Commodious was only funnin' around.

    ::WINK WINK::

    Seriously, though, if you're not familiar with the Reason commentariat already, you will quickly find that there is no more wretched a hive of cynicism on the net.

  • Rt. Hon. Judge Woodrow Chipper||

    there is no more wretched a hive of cynicism on the net.

    That's only because the DoJ doesn't have much of a net presence.

  • Overt||

    So one of the biggest vulnerabilities of Bitcoin is that with enough mining, an entity could capture enough of the coins that they could ultimately forge blockchains and thus destroy confidence in the currency. This seems to be a concern with pretty much any consensus based system. If enough distributed blockchains say that block 'foo' contains this code, or data then my system will execute that code even if it is forged. Or if enough consumers said Colts beat the Patriots in an AFC Post Season Game.

    How do you design the system such that consensus is not sabotaged by a determined attacker feeding false consensus? I'm not terribly concerned about private hackers, though their botnets can definitely get worrisome. I am worried about governments. The recent study suggesting the vulnerabilities in Bitcoin figured it would take a few billion dollars to mine enough coins to break the system. That is chump change to most western governments that want nothing to do with this technology.

  • some guy||

    Yeah, it makes no sense to try to steal the Bitcoins. To do so is very expensive and inherently undermines the value of the thing you are trying to steal.

    A western government could easily do it, but they would have to act quickly. The longer they wait, the more expensive it gets to undermine the system. Also, the agencies that actually care about Bitcoin right now may not have the dough to bring it down. By the time the better-funded agencies start to care about Bitcoin it may be too late to bring it down.

    So, I think the answer to the security issue is to just avoid being an early adopter of the technology. Once it becomes ubiquitous the risk will be no more than the risk of putting your money in an FDIC insured bank. Actually, if Bitcoin every becomes mainstream (like, people use it at Walmart and vending machines) it will probably be less risky than having it in a bank.

  • rocks||

    You can't forge blockchains by having x number of coins. That's not how the network functions.

    The only real attack is to gain 51% of the global hashing power ( which is expensive but doable for the USG). However even this is limited in what the attacker can do. Such an attacker could not spend coins others own or manipulate existing transactions. About the only thing a 51% attacker can do is a denial of service attack by refusing certain transactions.

    But even for this we have several countermeasures that are ready to implement.

    Bitcoins controlled by you (meaning you have the private key) are about as secure ad gold you control physically.

  • rocks||

    You can't forge blockchains by having x number of coins. That's not how the network functions.

    The only real attack is to gain 51% of the global hashing power ( which is expensive but doable for the USG). However even this is limited in what the attacker can do. Such an attacker could not spend coins others own or manipulate existing transactions. About the only thing a 51% attacker can do is a denial of service attack by refusing certain transactions.

    But even for this we have several countermeasures that are ready to implement.

    Bitcoins controlled by you (meaning you have the private key) are about as secure ad gold you control physically.

  • Cytotoxic||

    BTC underlying code can be tweaked to prevent the '51% attack'. Madesafecoin has this fix, I think.

  • Christophe||

    Maidesafe makes a lot of claims. I'll believe it if I see the code. Maybe they were talking about checkpointing? It's pretty popular with altcoins, but it's not a protection against a fast attack.

  • superresistant||

    You have a misconception about Bitcoin. The 51% attack vulnerability is more a myth than a threat.
    Andreas Antonopoulos explain it very well on this video :
    https://www.youtube.com/watch?v=ncPyMUfNyVM
    Plus it's hilarious.

  • Rich||

    Will a penguin be elected President in 2016?

    Way to cater to the Libertarians, Augur.

    I predict NSA will, um, be involved in this.

  • That's A Bingo!||

    “Our friends in Washington, D.C. say the CFTC will probably just dismiss Augur and say it’s not a big deal,” Krug told me in a phone interview.

    Yeah, that sounds like the Feds. /sarcasm

  • some guy||

    That's what they'll say publicly as they hunt down and prosecute every person involved in developing or using the software.

    Tax avoision, money laundering. They'll come up with some reason.

  • ||

    The cftc quote is missing the follow up ", but that's a bad strategy. Eventually they'll catch up and begin to regulate entry and exit points like any other decentralized system."

  • ||

    Well, it does sound like the Feds when they're common-sensical. Forgive me for being callous, but prosecuting the Augur dev team for "aiding and abetting a criminal conspiracy" simply on the grounds that they coded an open-source utility DAPP does have the real potential to make martyrs out of the team - in a way that Ross Ulbrich could never have been.

    "Gambling!? You're treating them like drug dealers because they facilitated gambling!?"

    When the feds go 'roid-head, they take a big risk when they 'roid-head over something that's in no way related to a moral panic. When they violate common sense in that way, they put a(nother) crack in the "dam of trust" that holds back a gusher of civil disobedience. And eventually...

    /wood_chipper_discourse

  • superresistant||

    Well said D M Ryan.

  • Swiss Servator, ...ouch.||

    Destroying Augur would involve unplugging the computers of everyone in the world participating in the Ethereum blockchain.

    CHALLENGE ACCEPTED!

    /Fedgov

  • ||

    "Augur actually has the potential to make the world safer by taking away market share in the gambling industry from criminals."

    You didn't even come close to spelling government correctly.

  • Scarecrow & WoodChipper Repair||

    You recognized the word, right? Seems to me he spelled it well enough.

  • Conchfritters||

    “Conservatives who favor federal ‘wars’ on drugs, gambling and other behaviors should understand the damage they have done to the constitutional underpinnings of limited government.” - - George Will

  • Hugh Akston||

    It's kind of precious that George Will believes that Conservatives give a shit about limited government or the Constitution.

  • Je suis Woodchipper||

    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.

    What? If there's a development team that patches the system as it operates and earns 1% of each bet, then that's who the govt will target with criminal prosecution.

  • ||

    This. Seriously, for all that you can go on about "the entire system lives in the distributed blockchain!", somebody owns the rights to augur.net, somebody hosts it, and somebody is collecting the money, and that's a soft spot that the government can use as leverage. Also, I often suspect that the Feds are about five minutes away from simply declaring Bitcoin illegal anyway.

  • superresistant||

    The team developing Augur won't collect any fees from the system. Fees are redistributed among people using Augur and reporting events.
    Once the program is working, developers are no longer required.

  • some guy||

    Maybe they plan on a well-timed relocation to a small island country.

    Also, is this "company" going to be taking the 1% off each transaction, or is the 1% going to be a fee paid to all the dispersed people putting up the computing power to maintain and verify the block chain? Because theoretically, once this thing starts rolling there won't be a need for patches. Or rather, if there are patches everyone maintaining the block chain will have to agree to them anyway.

  • ||

    The latter regarding fee structure

  • some guy||

    I thought that's what it might be. Otherwise it kind of defeats the purpose of using blockchains to start with. I really hope it works out.

  • ||

    Thank you!

  • Je suis Woodchipper||

    ohhhhhhhhhhhhhhh..... I missed that above.

  • ||

    What? If there's a development team that patches the system as it operates and earns 1% of each bet, then that's who the govt will target with criminal prosecution.

    Even if there's no development team, the gov't will invent people and implicate them by loose association. Everything said about prediction/gambling applies equally to any other vice/victimless crime throughout history. I mean, was there ever a centralized, client-server human-trafficking network that didn't derive it's authority from the government?

    The idea that the feds/statists will throw up their arms and go "Welp... they beat us..." ignores the fact that, for every Edward Snowden there are *at least* 10 people between 10 and 90% as talented as he is and who fully subscribe to the "What I'm doing is unquestionably legal." mentality.

  • superresistant||

    Implying feds have a saying on every country laws in the world.
    It's only a problem between USA citizens and their government.
    Most people are free to bet on anything they want.
    Also, how to you differentiate an American citizen using multiple proxy among other Augur users ?
    There is no way the feds can stop Augur open source code and the idea.

  • HenryB||

    The idea is there is nobody to collect fees, the system runs because of the rewards of mining the blockchain. Anybody who wants can start a market on it; if they choose to keep 1%, someone else will copy it taking 0.9%, etc, until someone just puts one out there anonymously with no fees. There is nobody "running" it, it is an autonomous contract that moves money around.

    Basically, the feds would have to go after the person who started that particular market, or the people verifying the bets (if human interaction is necessary), or the people making the bets. None of those sounds particularly feasible.

  • Mike A.||

    Is he a Pomona college dropout or a Pomona College dropout?

  • ||

    The latter

  • Mike A.||

    Old ass CMCer here.

  • Free Society||

    One attorney I spoke with suggested that the team that’s building Augur could be brought up on charges for aiding and abetting a criminal conspiracy. Nate Cardozo, a staff attorney with the Electronic Frontier Foundation, thinks that's far-fetched but says he can't rule it out. Cardozo emphasizes that writing open source software doesn’t necessarily protect the team from prosecution.

    And people wonder why the creator of bitcoin is so secretive about his identity.

  • NoVAHockey||

    "Once the bout is over, human participants (who receive a portion of the trading fees as compensation) must report the outcome to the system before Augur’s software will disperse the money to the winners"

    why? can't you program it to read the box scores?

    also

    Ha, ha, I wouldn't go to jail. The legal owner of this plant would, Canary M.
    Burns. This entire plant is in his name. So when they come to put C.
    M. Burns in jail, it's the canary that does the time.

  • Christophe||

    why? can't you program it to read the box scores?

    You could, but you can't rely on any particular machine to make the decision, so you'll need multiple independent people to do the work anyway. Nothing is stopping those people from using software to do the job.

    It's also meant to be a general purpose betting system, which means many outcomes aren't computer-verifiable at once.

  • kinnath||

    FedGov will simply target users.

    If they can make it a crime to travel to a foreign country with the intent to have sex with a minor, then they can make it a crime to merely connect to a locationless blockchain server.

  • bassjoe||

    Augur will have developers which can be tracked down, especially if their all working for a nonprofit in Silicon Valley, which will effectively kill the project.

    Yeah yeah, Augur can be developed in a decentralized fashion... but so can Bitcoin in theory. In reality, much of Bitcoin's development is centralized because very few people actually understand the nuts and bolts of the code; if a regulator got it in his head to force only 10 people to stop updating the Bitcoin protocol, it'd collapse.

  • ||

    if a regulator got it in his head to force only 10 people to stop updating the Bitcoin protocol, it'd collapse.

    And this is the straightforward solution. Look at Tor, Silk Road, Pirate's Bay, kickasstorrents, wikileaks, etc... you don't even have to convict them of a crime, just deem their activities as not conforming to whatever behavior a Title II public utility is *supposed* to facilitate and (force friendly private organizations to) deny them service wherever they go.

  • Cytotoxic||

    Uh Tor still works and there are plenty of dark markets still on line. SR ended because Ulbricht screwed up badly.

  • bassjoe||

    Governmental authorities regularly use Tor all the time for espionage, law enforcement and other reasons; it is an incredibly valuable tool to government. You can't get rid of the dark markets without also getting rid of its uses to the government; there's a reason the US government provides funds to the Tor Project.

  • Christophe||

    Many parts of Leviathan work at cross-purposes, thankfully. We'd really be doomed otherwise.

  • Christophe||

    Ulbricht messed up, but you only need to mess up once if the adversaries are dedicated. That's the tricky part. Not just doing a solid job on security at launch, but doing that forever.

  • ||

    Uh Tor still works and there are plenty of dark markets still on line. SR ended because Ulbricht screwed up badly.

    "Tor still works" depends on what you consider to be "works". Does it keep communications securely encrypted from anyone/everyone? Mostly. Does it keep *your* communications securely encrypted from a/the government? That depends...

    Kickasstorrents still runs. Wikileaks still runs. My point wasn't that the government *can't* kill bitcoin, they can. My point was that death comes in a lot of different forms, especially for (not-so-)nascent (not-so-)'disruptive' technologies and that while we like to point to pet issues and say liberty will win, we tend not to pay attention to the fact that *they* are the one's "mowing the grass". And that M0 economic shell games aren't exactly going to fix that in one fell swoop, if at all.

  • ||

    *they* are the one's "mowing the grass".

    "*they*" being statist government-types.

  • Ken Shultz||

    "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."

    We already have that in every market, don't we?

    Barack Obama thinks he knows how much unskilled laborers should be paid--regardless of what the market says.

    Policy makers ignore excellent market data all the time.

    Getting this kind of market information on new things will be helpful, but if policy makers and the idiots who vote for them ignore market data now when they form their opinions, why would having more of such data available make them any smarter?

  • Christophe||

    It only helps people who want to be helped. The big benefit of a prediction market is that you can use it to hedge risk. Buy contracts that pay out if "the minimum wage is raised" and you can reduce the harm of that outcome occurring.

    Politics will remain the realm of the brutish and nasty, but we'll have accurate price tags on their idiocy.

  • TheZeitgeist||

    All these peer-schemes are vulnerable as they are popular. The Feds could clamp down on Bitcoin in a big way for example, but at this point the political pain of doing such would be a factor - probably has been in the relative kid-glove treatment Bitcoin has gotten.


    I remember when e-gold got Miniluv'ed, but nobody else does because not enough people used e-gold or even knew it existed or what it was. Bitcoin snuck up on society and got popular faster than the creaking brontosaur that is FedGov could perceive the threat and stomp it. Now Bitcoin is a politician's problem and not just a bureaucrat's problem - this incidentally restrains the bureaucrats.


    Internet itself being so relatively free is kind of same story.

  • Cytotoxic||

    The feds cannot clamp down on BTC. It is too decentralized. If they could, the would. Like E-gold.

  • ant1sthenes||

    Bullshit. All they need is a good exploit (put the Stuxnet team on it), and then have an off-books team basically loot every large BTC wallet they can find in a massive day of terror. Oh noes! Hackers stoled the moneys! Confidence would plummet. And since every organized crime syndicate is equally impacted by the threat to their protection rackets, it could basically be any one of them that carries the attack out, and none of them would shed a tear or put any real effort into investigating it.

    That said, once you get the nomenklatura to buy in, you might be safe. I don't know if that's a good thing or not.

  • Rt. Hon. Judge Woodrow Chipper||

    I'm more concerned how Bitcoin, Augur, etc. can be exploited to distribute malware.

  • Overt||

    ^^ This.

    We have this problem in the ad industry today. The various ad networks all connect to each other through various redirects and data sharing. When you go to a site like reason, you are invoking a distributed database of advertising that is regularly used as a vector to deliver malware to your computer.

    At the least, since the blockchain is distributed EVERYWHERE, and completely transparent, there is room for third parties to monitor the chains and look for malicious code. However, it is notoriously easy- especially in javascript- to hide very malicious activity in the code. And even more worrisome, reading the etherium documentation, it is possible- even expected- that a seller or buyer writes their own contract in code. It is then up to the other party to review that code and decide whether they want to participate. The room for fraud here is pretty clear.

  • Christophe||

    The malware vector angle with bitcoin is pretty limited. The total set of instructions is minimal. It's always a risk, but there's relatively few places where mistakes can occur.

    The reason Javascript is a great attack vector is because of how much native functionality it exposes (GPU, disk, network, user preferences, there's a billion access points). In comparison Bitcoin only really exposes the data from the chain itself + system clock.

    Plus, almost no one uses the combined full-node/wallet combo anymore, which decreases attack vectors even further.

    Ethereum is more messy, and I don't have the knowledge to tell you if it's at risk or note.

  • HenryB||

    Malware is widespread because there is no cost to spread it. Under Ethereum, every transaction costs a tiny amount, so if you want to spread malware to millions of machines, it could cost large sums of money. Is there anyone that dedicated to being a pain in the ass?

  • Almanian - Trump's Woodchipper||

    I have no idea what's goin' on....

    You wanna get high?

  • Karl Hungus||

    . . . is there anything the government can do to stop it?

    No. But that doesn't mean they won't try - vigorously - and that many, many otherwise innocent people will wind up dead or in prison as a result.

  • Woody Chipset||

    So could you do insurance through such a thing? It's a form of betting.....

    Could you bond employees with it?

  • some guy||

    Those would be harder, I think. Sports betting works because a lot of people can agree on the outcome of the event. The payout under this system is decided by the consensus opinion regarding what actually happened. The people making up the consensus get paid a small fee for their services. I think it would be harder to reach a large consensus on what was the actual outcome of an insured activity, especially if it is a small-time event like insuring your roof against errant tree limbs. But it shouldn't be impossible. Someone smarter than me will probably figure out how to make it work.

  • BarryHughes||

    I've been excited about Augur ever since I first heard about it. Prediction markets have the potential to be a massive force for good. It's not just about more accurate forecasts per se, but also about changing societal norms: Either you put your money where your mouth is or people may start to question your sincerity and he accuracy of what it is that you say.

    And the way the Augur team has been developing the software and communicating about the project and the development process has been professional, honest and mature. Interactions with critics (even unreasonable critics and competitors) have been especially impressive in this respect.

    There are two concerns I have about Augur though:

    1. It is easy to underestimate the legal risk for the people in the Augur team, both in terms of the probability of authorities trying and succeeding in finding something to charge you with and the severity of the punishment in case of a conviction.

    2. The logo: I'm sorry, there is no nice or non-weird or non-vulgar way to say this: The logo is awful. It half-resembles an anus and half-resembles a vagina. Somebody mentioned this to me a while ago and I immediately saw what he meant. People I've mentioned it to have had the same response.

    Also, the purple is not that appealing as a color.

    But mostly, it's the anus/vagina thing that's problematic.

    Please consider a logo redesign (even if it's just a contest on 99designs or something).

  • some guy||

    You've got quite the imagination. Looks like an auger to me.

  • Mike A.||

    you may be a crazy person.

  • Cytotoxic||

    Game, set, match: the government cannot win. They can struggle but it's over.

  • ant1sthenes||

    Did you just invent a blockchain that lets you turn all computers into deathbots that view you as their personal god?

  • ||

    Game, set, match: the government cannot win. They can struggle but it's over.

    Cyto, do you mind if I ask you;

    If the system is truly peer-to-peer why doesn't everyone collect 1% royalties and/or why even have royalties at all?

    Do you find it odd that the group that built/owns/controls the protocol/system/network/marketplace call it peer-to-peer when, in fact, it's client/server and they're really charging you 1% transfer fees?

    Have their been any other groups in history that masqueraded around about obliterating ownership, making owners, producers, and consumers all into peers in a mutually beneficial system? Were these groups ever co-opted for other purposes? If they were co-opted, was it done at a highly technical level or at a level somewhere between modestly technical and largely political?

    With all the questions above, could you understand how someone might be reticent about declaring something an inherent successful win for the moral good just because it kinda-sorta exists and is used?

    Augur will be a great thing right up until the mandate that insists all gambling be done through Augur (for prediction purposes) and that transaction fees will need to be temporarily raised to accommodate unexpected growth.

  • HenryB||

    If the system is truly peer-to-peer why doesn't everyone collect 1% royalties and/or why even have royalties at all?

    Not everyone is mining. There is no central authority to determine who mines, anyone can join at any time and hope to collect some of these 'royalties'. (If you want some, be prepared to spend a massive amount on hardware costs.) The mining rewards exist to make the blockchain usable for everyone else, all those who doesn't feel like running some obscure program on their computer all the time.

  • An Innocent Man||

    As soon as they've "met" with their "friends" at fedgov, It would be safe to assume they've been flipped and fedgov will have a backdoor to everything?

  • ant1sthenes||

    It's not open source?

  • Hank Phillips||

    1. The whole point of organized mysticism is to produce suckers who'll believe ANYTHING and turn them over to politicians for use in creating taxes and moronic prohibition laws. If gambling were not criminalizable then these fools and their money would soon part before the politicians could get their hooks into it.
    2. Then there's crooked elections: if a bunch of sophisticated actuaries and algos start letting folding money be openly wagered on the outcomes of elections it could become difficult to fake those outcomes. Already there is no reason why we cannot have a password to check our vote was counted honestly, just like checking that the ATM credited or debited our bank account honestly. This kind of platform could be a major threat to a looter kleptocracy based entirely on dishonesty--like the lotteries in George Orwell's 1984 and in real-life Latin America.

  • flound1129||

    In case anyone is interested, Jeremy Gardner, Augur's Director of Operations, will be participating in a Decentralization summit on ZapChain this friday.

  • Suellington||

    Looks very promising. Good job, hope it succeeds!

  • Nonstopdrivel||

    Holy shit: a Reason writer who is not also a Reason editor. I didn't know such a creature existed.

  • KGranger||

    Decentralization of casinos and sports betting will be great for the users, but it is a hard sell for investors to put money into something that effectively shrinks the return rates. Decentralized systems have been a hard sell for investors for this main reason, as systems that increase efficiency by cutting out extra fees appear to reduce net income for a system.

    It is for this reason that the systems themselves need to operate similarly to an investment in the sense that the system carries its own value and those who own a piece of the system can trade or sell it for something of value. Decentralization allows anyone to become an "owner of the system" with blockchain technology, and also allows for new systems to be built on top of it, such as Ethereum has done.

    Even beyond DAO's, decentralized commodity reserves have already become a reality. Amilabs.cc has established decentralized gold reserves that are represented by their digital currency. They are looking to create more of these currencies that are backed by multiple reserves to prevent any single government from having control over the entire supply.

  • Thomas L. Knapp||

    DisBURSE, not DisPERSE.

    Sorry, pet peeve.

  • Buy Bitcoin India||

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