Augur, a fully-decentralized, open-source prediction market platform based on blockchain technology, intended to revolutionize forecasting, decision-making and the manner in which information consensus is collected and aggregated, has been selected as one of the five finalists in the “Breakthrough” category at the XCS Challenge at Exponential Finance 2015.
The Singularity University and CNBC hosted the Exponential Finance 2015 conference (New York, 2-3 June), which examines how rapidly accelerating technologies such as artificial intelligence, quantum computing, crowdfunding, digital currencies, and robotics are rapidly disrupting businesses throughout the financial industry.
The Singularity University, based at Moffett Federal Airfield in California and sponsored by high-profile high-tech firms including Google, is an educational center dedicated to world-changing applications of disruptive, exponentially accelerating technologies.
Augur, a fully-decentralized, open-source prediction market platform based on blockchain technology and Ethereum, intended to revolutionize forecasting, decision making, and the manner in which information consensus is collected and aggregated, has been selected as one of the five finalists in the “Breakthrough” category at the XCS Challenge at Exponential Finance 2015.
“Singularity U traditionally highlights the most innovative and cutting edge technology and we feel Augur definitely deserves to be here,” said Augur’s Marketing Director, Tony Sakich, to CoinTelegraph. “Prediction Markets have the potential to create more accurate forecasts in so many fields that the applications could go on for a long time. The most exciting immediate application is for political polling as Augur would enable the largest consensus of models possible.”
“Harnessing the blockchain, Augur has created the first online platform for a global market of predictions,” states the Exponential Finance website. “Anybody can create a market for an event, and anyone can wager whether that event will occur or not.
”Prediction markets harness the “wisdom of the crowds” to create powerful and uncensorable forecasting engines. “This is the future of forecasting,” says the Exponential Finance announcement.
Prediction markets are speculative markets created for the purpose of making predictions. The current market price for a prediction – for example the election of a particular candidate – can be interpreted as an aggregate, crowdsourced estimate of the probability of the prediction. For example, if a prediction market security rewards a dollar if a particular candidate is elected, those who think the candidate had a 70 percent chance of being elected should be willing to pay up to 70 cents for the security.
Evidence suggests that such financial incentives make prediction markets more effective than other forecasting strategies. The Iowa Electronic Markets typically predicts elections within one percent, more accurate than polls or expert opinions. Since 1988 it has correctly predicted the outcome of every U.S. presidential election. The Foresight Exchange, one of the oldest active prediction markets, is a public, play-money market allowing individuals to sign up for free and predict the future.
Prediction markets had a moment of fame in 2003, when the Policy Analysis Market (PAM), a proposed futures exchange developed by the United States’ Defense Advanced Research Projects Agency (DARPA), was canceled after a wave of accusations of incentivizing terrorism, which resulted in the resignation of John Poindexter, head of the DARPA unit responsible for developing the project.
“The idea of a federal betting parlor on atrocities and terrorism is ridiculous, and it’s grotesque,” said Sen. Ron Wyden.
The PAM was inspired by the work of George Mason University economist Robin Hanson, a leading researcher in the field, co-creator of the Foresight Exchange, and author of a seminal paper on “Idea Futures,” who is now one of the Augur advisors. Hanson explains his ideas on prediction markets and Augur in a short video posted on the Augur website.
According to Hanson, real money markets such as the Iowa Electronic Markets – and Wall Street – predict election outcomes better than opinion polls. Referring to previous regulatory obstacles encountered by prediction markets such as PAM, Hanson notes that all of our familiar financial instruments: stocks, insurance, commodity futures, options were once forbidden by anti-gambling laws.
Giulio Prisco is a writer specialized in science, technology and business. He is persuaded that Bitcoin and its underlying technology are about to bring disruptive positive changes to finance, business, and society.