On 09/26/2015 11:15 PM, jim bell wrote: > Copied from correspondence. >
Riseup.net doesn't like Fw: Fw: in subject lines... "Re: ***SPAM*** Fw: Fw: Augur: Blockchain-based Internet prediction market." > ----- Forwarded Message ----- > *From:* Jim Epstein <[email protected]> > *To:* jim bell <[email protected]> > *Sent:* Saturday, September 26, 2015 5:23 AM > *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market. > > Thanks, jim. I will read your essay and engage with this topic again > soon, but I'm immersed in another unrelated story that's consuming my > brain and time. I'll get back to you. > > > On Sat, Sep 26, 2015 at 3:47 AM jim bell <[email protected] > <mailto:[email protected]>> wrote: > > I wanted to mention that Prof Juels has responded to my inquiry. > See his work at: > > https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&sqi=2&ved=0CCsQFjACahUKEwi9hY33mZTIAhXRpYgKHeapAhY&url=http%3A%2F%2Fwww.arijuels.com%2Fwp-content%2Fuploads%2F2013%2F09%2Fpublic_gyges.pdf&usg=AFQjCNHOBvCYwJ5Aq0CmHTOY53sGdRs5Sw&sig2=XpktiIWHc5e6slk0VsLOcQ&bvm=bv.103388427,d.cGU > > > I should point out that the main reason for my inquiry WASN'T to > get academic credit, but rather to point out that people who have > read my AP essay (and who understand and agree with its goals and > likelihood of working) would consider Juels et al objectives to be > undesirable and, indeed, dangerous. Superficially, it sounds good > to say that they are trying to prevent "criminal contracts", but > for those of us who oppose (for example) laws against > currently-illegal drugs, we might very well WANT a "criminal > contract" to be operational, like Silk Road or such. Or my AP > (assassination politics) idea. > > Prof Juels claims that he/they were not aware of my AP essay. > Well, sorry, but I find that a little hard to believe. It's not > that it's hard to believe that an average citizen of America (or > the world) hadn't heard of it.THAT would be easy to believe. > Rather, Juels, Shi, and Kosba claim to be working on the concept > of trying to stop "criminal contracts", and do you really believe > they haven't heard of AP?!? > > My understanding is that my AP essay is probably the second > most-famous Internet essay in existence, perhaps being Ted > Kaczynski's, and it makes far more sense. Now that Juels, Shi, > and Kosba definitely know about AP, I think that they should > address its implications BEFORE they purport to fight it. > Jim Bell > *From:* jim bell <[email protected] <mailto:[email protected]>> > *To:* Jim Epstein <[email protected] > <mailto:[email protected]>> > *Sent:* Wednesday, August 26, 2015 3:39 PM > > *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market. > > You might also want to look at > http://www.arijuels.com/wp-content/uploads/2013/09/public_gyges.pdf > , by Juels, Shi, and Kosba. > Jim Bell > > > > ------------------------------------------------------------------------ > *From:* Jim Epstein <[email protected] > <mailto:[email protected]>> > *To:* jim bell <[email protected] <mailto:[email protected]>> > *Sent:* Wednesday, August 26, 2015 2:35 PM > *Subject:* Re: Fw: Augur: Blockchain-based Internet prediction market. > > I'm not familiar with it, but I'm going to read it. I'm very > interested. Thanks for sending this. > > Jim > > > > On Wed, Aug 26, 2015 at 1:14 PM, jim bell <[email protected] > <mailto:[email protected]>> wrote: > > Dear Mr. Epstein, > Are you familiar with my 1995-6 essay, "Assassination > Politics". www://cryptome.org/ap.htm > <http://cryptome.org/ap.htm> > Jim Bell > > ----- Forwarded Message ----- > *From:* jim bell <[email protected] <mailto:[email protected]>> > *To:* Cpunks List <[email protected] > <mailto:[email protected]>> > *Sent:* Tuesday, August 25, 2015 7:31 PM > *Subject:* Augur: Blockchain-based Internet prediction market. > > http://reason.com/blog/2015/08/11/augur-gambling-prediction-ethereum > > > 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. > Jim Epstein Aug. 11, 2015 12:36 pm > > 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 commissionedone 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. > 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. > > 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 recentReason magazine > feature story on the topic. > > > > > > > > >
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