Topic: Bitcoin price increases are just getting started - page 6. (Read 37626 times)

Quote from: Terpie on May 11, 2011, 05:51:27 PM

Bitcoin will be very valuable not because some insider trading on some black market betting services/exchanges. Bitcoin will be very valuable because every freaking single mobile phone on the planet (yes billions and billions of them) will have a bitcoin wallet with a few nanobitcoins in it.

Why would mobile phone users use an alien currency when they could use their native currency tied to their pre-existing checking account? (keeping in mind the average consumer dosen't care much about anonymity or ending the fed)

For years there's been speculation that cellphones could replace debit/credit cards but it still hasn't taken off.

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

Interestingly enough, I just came across this one Intrade:

http://www.intrade.com/v4/markets/contract/?contractId=745538

Intrade has a new look. Wonder when they'll get a new currency Wink

SgtSpike

legendary

Activity: 1400

Merit: 1005

Quote from: Terpie on May 11, 2011, 05:40:21 PM

Quote from: dacoinminster on May 11, 2011, 04:41:33 PM

Quote from: SgtSpike on May 11, 2011, 04:36:44 PM

Didn't someone just announce a website to do exactly that with bitcoins a few days ago?

Please post a link. I think maybe you are talking about the bitcoin stock exchange?

I glanced at that site. Looked like they were going to start a stock exchange where companies register and are traded in bitcoins. That may be a good idea, but it is not at all what I am imagining.

I will if I can find it. It wasn't the bitcoin stock exchange. It was definitely along the lines of what you are describing - basically, contract betting.

Quote from: dacoinminster on May 11, 2011, 05:47:17 PM

One of the important concepts of a predictions market is that it incentivizes the sharing of information. This can be used maliciously or benevolently, but in my opinion, sharing information is a net benefit. Imagine if there was a predictions contract stating that a large scale terrorist attack would be attempted in September of 2001. Game theory comes into play here, all you need is one person with knowledge of the attack to defect and cash in by buying the contract. The price would rise, and information would be gained by the community that could be used to prevent the attempt from succeeding.

I guess I don't quite understand how this works. If someone bought a contract saying it would happen, because they had knowledge of such an attack, then why would they release the information about the attack before it happened, foiling the plans of the attack and losing the bet? What am I missing here?

The bet is on the attempt, not the successful execution (in this hypothetical). Imagine the contract states a payout of $10 if the prediction is determined to be 'true'. It pays out $0 if the contract is determined to be 'false'. Therefore, a price of $5 is essentially telling the world that the market believes there is a 50% chance an attack will be attempted. If you know for a fact that an attempt will occur to a confidence of 99.9999% probability, then you stand to make a LOT of money by buying as many contracts as possible, therefore raising the price to $9.99. This effectively tells the world that 'the market' believes there is a 99.9% chance an attack will occur. Of course, it is a double edged sword. It also means a person can gain from buying the contract first, THEN having someone else orchestrate an attack, in order to profit.

Ahhh, that's the missing piece of the puzzle - the bet is on the attempt, not on it suceeding!

I realize that one could also bet on an attack succeeding, but they wouldn't want to give away ANY details about it if that were the case. Maybe, "A terrorist attack on November 13th, 2011 in America". It wouldn't give away enough information to stop whatever would happen, but would be specific enough to place a bet on.

Of course, anyone who bets on something like that with the knowledge that human lives will most likely be lost if they do not give the information out to the proper individuals is a sick person indeed...

Terpie

full member

Activity: 174

Merit: 101

Interestingly enough, I just came across this one Intrade:

http://www.intrade.com/v4/markets/contract/?contractId=745538

Terpie

full member

Activity: 174

Merit: 101

Quote from: marcus_of_augustus on May 11, 2011, 05:41:27 PM

Yeah, know a good market where I can find such a contract? Or derivative upon the derivative perhaps n^3?

That reminds me of another IM conversation I had with . . . somebody else:

him: on December 21 2012 is the day everyone will become aware.
me: aware of what?
him: UFO's are here, and always have been.
me: Interesting prediction
him: I don't think its a prediction.
him: its pretty well set in stone.
him: no pun intended
me: Do you think that on December 22nd 2012, I will believe that "UFO's are here, and always have been."?
him: I would bet my life on it.
me: Wow. Forget betting your life. I wish there was a way to bet money on it.
him: I guess we'll have to bet on December 20th.
him: 2012

I sure hope there is a predictions market running by then.

A fool and his money...

dacoinminster

legendary

Activity: 1260

Merit: 1031

Rational Exuberance

Quote from: marcus_of_augustus on May 11, 2011, 05:41:27 PM

Yeah, know a good market where I can find such a contract? Or derivative upon the derivative perhaps n^3?

That reminds me of another IM conversation I had with . . . somebody else:

him: on December 21 2012 is the day everyone will become aware.
me: aware of what?
him: UFO's are here, and always have been.
me: Interesting prediction
him: I don't think its a prediction.
him: its pretty well set in stone.
him: no pun intended
me: Do you think that on December 22nd 2012, I will believe that "UFO's are here, and always have been."?
him: I would bet my life on it.
me: Wow. Forget betting your life. I wish there was a way to bet money on it.
him: I guess we'll have to bet on December 20th.
him: 2012

I sure hope there is a predictions market running by then.

marcus_of_augustus

legendary

Activity: 3920

Merit: 2349

Eadem mutata resurgo

Quote from: Terpie on May 11, 2011, 05:32:54 PM

I'd say that all these theories of underground exchanges which ignore KYC rules, move around billions of dollars in bitcoins are very interesting. Though idea that such exchanges would survive more than a few days or month before being taken down and operators imprisoned is rather far fetched.

We should engage in a predictions contract regarding this.

Yeah, know a good market where I can find such a contract? Or derivative upon the derivative perhaps n^3?

Terpie

full member

Activity: 174

Merit: 101

Quote from: dacoinminster on May 11, 2011, 04:41:33 PM

Quote from: SgtSpike on May 11, 2011, 04:36:44 PM

Didn't someone just announce a website to do exactly that with bitcoins a few days ago?

Please post a link. I think maybe you are talking about the bitcoin stock exchange?

I glanced at that site. Looked like they were going to start a stock exchange where companies register and are traded in bitcoins. That may be a good idea, but it is not at all what I am imagining.

I will if I can find it. It wasn't the bitcoin stock exchange. It was definitely along the lines of what you are describing - basically, contract betting.

Quote from: dacoinminster on May 11, 2011, 05:35:32 PM

One of the important concepts of a predictions market is that it incentivizes the sharing of information. This can be used maliciously or benevolently, but in my opinion, sharing information is a net benefit. Imagine if there was a predictions contract stating that a large scale terrorist attack would be attempted in September of 2001. Game theory comes into play here, all you need is one person with knowledge of the attack to defect and cash in by buying the contract. The price would rise, and information would be gained by the community that could be used to prevent the attempt from succeeding.

I guess I don't quite understand how this works. If someone bought a contract saying it would happen, because they had knowledge of such an attack, then why would they release the information about the attack before it happened, foiling the plans of the attack and losing the bet? What am I missing here?

The bet is on the attempt, not the successful execution (in this hypothetical). Imagine the contract states a payout of $10 if the prediction is determined to be 'true'. It pays out $0 if the contract is determined to be 'false'. Therefore, a price of $5 is essentially telling the world that the market believes there is a 50% chance an attack will be attempted. If you know for a fact that an attempt will occur to a confidence of 99.9999% probability, then you stand to make a LOT of money by buying as many contracts as possible, therefore raising the price to $9.99. This effectively tells the world that 'the market' believes there is a 99.9% chance an attack will occur. Of course, it is a double edged sword. It also means a person can gain from buying the contract first, THEN having someone else orchestrate an attack, in order to profit.

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

I guess I don't quite understand how this works. If someone bought a contract saying it would happen, because they had knowledge of such an attack, then why would they release the information about the attack before it happened, foiling the plans of the attack and losing the bet? What am I missing here?

It would not be Osama Bin Laden that would bet on it, but his housekeeper who overheard the plan. She would bet big on a terrorist attack happening, because she doesn't care about Jihad and she sees a way to make some easy money.

Even if the terrorist did bet on he'd be warning us. And even if he pulls it off anyway, he only wins money that people bet. Winning a bet would probably be the least bad thing the guy did in the day.

dacoinminster

legendary

Activity: 1260

Merit: 1031

Rational Exuberance

Quote from: dacoinminster on May 11, 2011, 04:41:33 PM

I guess I don't quite understand how this works. If someone bought a contract saying it would happen, because they had knowledge of such an attack, then why would they release the information about the attack before it happened, foiling the plans of the attack and losing the bet? What am I missing here?

It would not be Osama Bin Laden that would bet on it, but his housekeeper who overheard the plan. She would bet big on a terrorist attack happening, because she doesn't care about Jihad and she sees a way to make some easy money.

There is a good chance her bet would NOT foil the attack, because she would not give specific enough information, but her employer would definitely not be pleased if he found out she was doing this. The CIA on the other hand, would be pleased to have some intel on when an attack might be happening.

SgtSpike

legendary

Activity: 1400

Merit: 1005

Quote from: SgtSpike on May 11, 2011, 04:36:44 PM

Didn't someone just announce a website to do exactly that with bitcoins a few days ago?

Please post a link. I think maybe you are talking about the bitcoin stock exchange?

I glanced at that site. Looked like they were going to start a stock exchange where companies register and are traded in bitcoins. That may be a good idea, but it is not at all what I am imagining.

I will if I can find it. It wasn't the bitcoin stock exchange. It was definitely along the lines of what you are describing - basically, contract betting.

One of the important concepts of a predictions market is that it incentivizes the sharing of information. This can be used maliciously or benevolently, but in my opinion, sharing information is a net benefit. Imagine if there was a predictions contract stating that a large scale terrorist attack would be attempted in September of 2001. Game theory comes into play here, all you need is one person with knowledge of the attack to defect and cash in by buying the contract. The price would rise, and information would be gained by the community that could be used to prevent the attempt from succeeding.

I guess I don't quite understand how this works. If someone bought a contract saying it would happen, because they had knowledge of such an attack, then why would they release the information about the attack before it happened, foiling the plans of the attack and losing the bet? What am I missing here?

Terpie

full member

Activity: 174

Merit: 101

I'd say that all these theories of underground exchanges which ignore KYC rules, move around billions of dollars in bitcoins are very interesting. Though idea that such exchanges would survive more than a few days or month before being taken down and operators imprisoned is rather far fetched.

We should engage in a predictions contract regarding this.

dacoinminster

legendary

Activity: 1260

Merit: 1031

Rational Exuberance

I'd say that all these theories of underground exchanges which ignore KYC rules, move around billions of dollars in bitcoins are very interesting. Though idea that such exchanges would survive more than a few days or month before being taken down and operators imprisoned is rather far fetched.

The idea of a totally anonymous decentralized currency immune from government shut-down seemed pretty far-fetched to me a few months ago. What stops the same principles from allowing anonymous prediction markets?

dacoinminster

legendary

Activity: 1260

Merit: 1031

Rational Exuberance