Topic: A working PREDICTION MARKET! - information should have a price, but fair one (Read 5094 times)

Recently the chances for the Bitcoin blocksize limit to raise to 20MB changed from 10% to 30%. What do you think?

Update 21.02.2015
we have extended our sport section tremendously and we are now by far the biggest Bitcoin betting exchange with total liquidity of several 1,000 BTC in sports.

additional noteworthy:

• Betting exchange - bet against users, not against the house
• 0.00% fees on sport bets
• we have strong market makers that provide better odds than pinnacle with about the same liquidity
• no account needed
• API for market makers and other professionals or hackers: fairlay.com/api

read more here:
https://bitcointalksearch.org/topic/fairlay-sports-betting-for-experts-highest-liquidity-provably-best-odds-673475

We have new events on the latest Bitstamp events: https://www.fairlay.com/event/category/bitcoin/bad-news/
When will Bitstamp allow Bitcoin withdrawals again?

We are proud that we have now liquid markets with several hundert predictions on:
Politics: https://www.fairlay.com/event/category/news/politics/
Bitcoin difficulty: https://www.fairlay.com/event/category/bitcoin/difficulty/
and all kind of sports:
https://www.fairlay.com/event/category/sports/

We recently have a lot of activity on our regular "next difficulty prediction"

https://www.fairlay.com/predict/registered/new/next-difficulty-31b/

bet against difficulty >31B at odds of 3.5. Note that from the current difficulty data odds should be more like 2. (50%/50%).

Some sources that predict the difficulty and their current prediction:

https://bitcoinwisdom.com/bitcoin/difficulty: 31,109,256,240
https://cryptanalys.is/difficulty/bitcoin_btc.php: 29,611,949,922
http://www.vnbitcoin.org/bitcoincalculator.php: 29,804,000,000
http://mining-profit.com/bitcoin-difficulty-history: 30171493992

Thus all sites (in exception of bitcoinwisdom) predict a difficulty of <31B that would bring you 3.5 times your money back.

Today we added a new feature: you can now place a bet/prediction without an account.

We have a new interesting bet:

https://www.fairlay.com/predict/registered/new/bitcoin-will-outperform-top-10-altcoins/

Some graphs our prediction market created so far:


https://www.fairlay.com/predict/registered/new/mtgox-will-find-50-000-more-btc


https://www.fairlay.com/predict/registered/new/mh370-plane-found-in-april


https://www.fairlay.com/predict/registered/new/bitcoin-price-800


https://www.fairlay.com/predict/registered/new/next-difficulty-13-5b


https://www.fairlay.com/predict/registered/new/bitcoin-price-820


https://www.fairlay.com/predict/registered/new/brazil-does-not-win-the-world-cup-and-there-will-be-casualties-in-subsequent-riots


https://www.fairlay.com/predict/registered/new/every-difficulty-increase-in-2014-by-10

I seriously doubt they will go for less than 5-7% above whatever current market price is.  Thinking a premium will be involved because the big buyers will know without any doubt the coins will be received.  Interesting site though.

We have a couple of predictions on the auction of the silk road sized coins:
For example will the lowest price of a Block be < $450?

https://www.fairlay.com/event/category/bitcoin/price/

By "fair" we mean that you know the full rules.
Thus if we make a bet on facebook likes or a bet like this https://www.fairlay.com/predict/registered/new/article-about-fairlay-on-coindesk / where everyone knows that it could be influenced by others than we think this if fair.

We have written about how someone "manipulated" the facebook bet http://blog.fairlay.com/2014/02/how-a-bet-made-someone-else-buy-us-4000-fake-facebook-likes/

I must admit that bitbet.us is in this definition "fair" as well since they state how the rules are and it is your choice to bet there or to do not. However, we think in a lot of bets early betters have a HUGE disadvantage.

Lets have a look at this bet for example: http://bitbet.us/bet/619/bitcoin-difficulty-at-or-above-2b-before-feb/
The last bets could be made when it was 99,99% clear that the event will happen.

A more drastic example is this: http://bitbet.us/bet/411/barcelona-to-win-2013-uefa-champions-league/ You could make a bet against Barcelona in the 80 minute of the second leg when it was 3:0 for Bayern and Barcelnoa lost the first leg with 0:4 and bitbet was giving you still about 50% weight. That shows to us clearly that a linear wight system and parimutuel betting is not a good solution for most events.
To be honest that was the reason why we created fairlay - yes we know about bitbet and liked it in general but the possibility with a real prediction market (like fairlay.com) are much bigger.
One think that bothers us on bitbet was that sometimes the resolution of the event was controversial. That is why we started to give a short comment on every resolution to make our decisions more transperent: compare: https://www.fairlay.com/predict/registered/new/next-difficulty-8-9b/ We would recommend to bitbet to do the same...

What exactly do you imagine "fair" means?

We are online now for real BTC.

We stared with a offer to suggest events and earn 80% of the fees:
https://bitcointalksearch.org/topic/m.5825323

And we have stared another "facebook likes" bet - this time for real BTC:
https://www.fairlay.com/bet/registered/new/fairlay-10-000-facebook-likes/

@MPOE we have a different betting system than bitbet.us or betofbitco.in had. We think it is more fair for the user since he nows what he will win and it did not depend on future actions of other users. But both systems have advantages - the user should decide.

Yeah, they were having a lol @you over on -assets a coupla days ago.

Sure you can - who should forbid you? It is part of a free market.

But if you want to do - better choose this one:

It is a bet wether a certain charity will reach a certain amount of BTC funds.
You can bet that it will happen - and make it happen.
Guaranteed winning a bet and doing something for charity!

https://fairlay.com/bet/registered/new/charity-songs-of-love-gets-21-btc/

What if i was to bet Yes on you 2500 facebook likes, and then pay people to like your FB page; is that allowed?

Finally we are online!

Information is worth pure money. At this moment, thousands of Bitcoins on Mt Gox are traded for around 70% of their value. Consequently, right now the information whether Gox is short in Bitcoin or not is worth millions of dollars - if you were to know "Gox will allow withdrawals in 2 weeks again” you would sit on a gold mine. We from fairly believe that reliable information should have a price - but a fair one. The best way to decide upon a fair price for a certain good is to let it be traded in a free market. This is the idea of a prediction market.

How does it work? A working prediction market should aggregate all data into the best available forecast. If you have newer or better information you can always bet against the current prediction, improving the forecast and get rewarded in the process. The key performance indicator will be the spread between betting on an event and betting against an event. Sports betting sites are traditional bookmakers and make money through this spread. You bet against the house and not against other users. If you bet on both outcomes equally you will get a return of 70% - 90% of your wager. A prediction market needs > 98% return. This also means that the odds on a certain event can change over time when new information becomes available, akin to the price of shares in a stock market. A prediction market lets you sell your earlier predictions at a profit before the event has even taken place.
Other features a prediction market should have are:

• anonymous betting
• a transparent process of resolving a bet - optimally decentralized or at least with a provable track record
• funds protected with a transparent multi-sign no-trust-needed solution
• open access to all bet data
• get push notification on price changes (be warned if new information is out)

We can not offer such a market today but this is our vision of where we want to go and we have taken the first little steps to get there. We can not offer the decentralized aspects today - not even in the next month - but we are working on it! We have the basic functionalities of a prediction market implemented and will commence a beta testing phase very shortly. You can pre-register on http://fairlay.launchrock.com/

A first impression: