Augur (software)

Augur
Developer(s) Forecast Foundation
Preview release
Beta / 14 March 2016 (2016-03-14)
Development status Active
Written in Serpent and JavaScript
Platform Ethereum
Type Prediction market platform
License Free software (GPL)
Website www.augur.net

Augur is a fully open-source and decentralized prediction market platform built on Ethereum, a blockchain technology that allows for the execution of smart contracts. JavaScript is also used for a browser-based GUI supplementing the command line. Notable supporters of the project include Intrade co-founder Ron Bernstein,[1] the Thiel Foundation[2] and Vitalik Buterin.

Early development of the software began in autumn 2014, and an alpha version was released in June 2015. From August to October 2015, a global crowdfunding campaign raised US $5.2 million in cryptocurrency to support future development.[3] A beta version was released in March 2016.[4] Live release is currently projected for somewhere in 2017.

Purpose and background

The Augur project seeks to leverage the open, global, peer-to-peer ledger functionality that blockchain technology provides, as well as game theory and financial incentives, to better explore the concept of the wisdom of crowds (also known as collective intelligence) and try to get more accurate predictions about future events.[5] The specific technologies used would theoretically allow for more participation and volume compared to traditional betting platforms, therefore augmenting the quantity of markets available and their accuracy.

On Augur, anyone, anywhere in the world can instantly create a market on his topic of choice (e.g. Who will be the winner of the 2016 US Presidential Elections), with no need for centralized approval, can freely participate in all markets, and will lose a minimal amount of money to fees. Another important advantage is the reduced possibility of fraud and counterparty risk: monetary exchanges on the platform are strictly regulated by smart contracts and a distributed oracle system ensures that no one can claim a false result on an event.

Augur's conceptual roots can be traced back to Friedrich Hayek's The Use of Knowledge in Society, which is mentioned by several members of the project as a source of inspiration, James Surowiecki's book The Wisdom of Crowds, Robin Hanson's concept of "Idea Futures", Paul Sztorc's "Truthcoin" whitepaper,[6] Vitalik Buterin's "Schellingcoin" concept,[7] and the work of Stanford University computer scientist Joseph Bonneau.

Operation

The underlying network unit utilized by Augur is known as reputation (or REP), which will be used by the platform's referees to report event outcomes (whether predictions were successful or not),[8] while Bitcoin and Ether (Ethereum's internal currency) will be used for speculating on markets. Almost all of the reputation units were distributed during the crowdsale to approximately 4,800 participants, but they are set to be continually redistributed from bad actors to good actors.

Augur can be used as a distributed oracle system, allowing other smart contracts to propose questions to it and discover information about the real world without having to trust a single person, AI or organization.

Use of Ethereum

After an initial desire to build the backend on the Bitcoin blockchain, the Augur team settled on Ethereum, explaining that it currently offers a better development platform for rapid deployment, that making use of Bitcoin as the foundation would not have offered clear security benefits, and that it intends to integrate into the Bitcoin network through sidechains as soon as that technology becomes available.[9]

One critic has expressed the opinion that the Ethereum platform is impractical for use in the calculation of outcomes because it allows for "parasite contracts" which steal the work done by contributors without compensating them properly.[10] The Augur team pointed out that this vulnerability is not unique to Ethereum: any blockchain-based system can execute such a "parasite" attack on another blockchain simply by incorporating Merkle proofs of the host blockchain into its own chain. Ethereum-based oracles are expected to be resilient to parasite attacks, as they cannot be attacked by Ethereum-based parasite contracts; Ethereum contracts do not have access to raw blockchain data.[11]

History

The development of Augur began in October 2014, with an alpha prototype being released shortly after. In April 2015, Augur's first contract was uploaded to the Ethereum network.[12]

Augur's alpha GUI

In May 2015, Augur released a two-minute animated video titled "How Augur Works" narrated by country music star Shooter Jennings. The video provides a detailed explanation of Augur using simplified language to increase understanding of the technology.[13] It was watched more than 200,000 times on YouTube.

In June 2015, an alpha version was released to the general public for testing.[14]

Shortly afterwards, Augur announced that 8.8 million reputation tokens would be distributed via a 45-day crowdsale beginning on August 17, 2015.[15][16] It was deemed necessary to support future development and distribute voting power for event outcomes. Augur raised over $5.2 million before the crowdsale concluded on October 1, 2015, making it one of the top 25 highest funded crowdfunding projects of all time.[3][17][18][19]

Coinbase selected Augur as one of its five most exciting Bitcoin projects in their "Bitcoin Trends In The First Half Of 2015" report.[20]

Augur was the only blockchain technology that made it to the finals in the CNBC and Singularity University's Exponential Finance XCS Challenge.[21][22]

Augur's beta GUI

Augur has amassed growing media attention. Maxim Lott from Fox News notes that "Augur aims to prevent [the shutdown of Intrade] from happening again by being a prediction market that operates as a self-sustaining computer program which would not need a corporation to operate it."[23] Jim Epstein from Reason Magazine writes that Augur "could do to the neighborhood bookie what electric refrigerators did to the ice delivery man".[24] Tom Kerr from the Racing Post warns about a "technological innovation that could disrupt bookmakers, undermine racing's funding mechanism and make preventing corruption almost impossible", while also admitting "[it] is now out there and it will not go away".[25]

The platform has also been mentioned on Politico,[26] TechCrunch,[27] the Wall Street Journal,[28] the International Business Times,[29] and CoinDesk.[30]

In March 2016, Augur released a beta version.[4]

In June 2016, the Thiel Foundation announced it had named one of the lead developers, Joey Krug, a Thiel Fellow.[2]

In October 2016, all the reputation tokens that were for sale during the 2015 crowdfunding campaign were distributed to their owners on the live Ethereum network. The two largest cryptocurrency exchanges, Poloniex and Kraken, added support for these tokens on their trading platforms.[31] This was followed by integration in MyEtherWallet and the Jaxx multiplatform wallet, including iOS after Apple approved the use of Augur REP in the App Store.[32] The Augur platform itself has not launched yet however.

Academic and business affiliations

The project includes Intrade founder Ron Bernstein and George Mason University economics professor Robin Hanson (author of OvercomingBias.com) among its advisers.[33]

Coinbase CEO Brian Armstrong said Augur "could produce some incredibly useful data" and that it was "super exciting. We talk about it a lot internally."[34] Ethereum founder Vitalik Buterin as well as Bitcoin entrepreneurs Erik Voorhees and Bo Shen have also expressed support for the platform.[35][36]

In March 2015, Microsoft announced both a partnership with Augur and the Augur Beta in a firehose blog post.[37] Augur will be offered in Microsoft Azure's "Blockchain as a service" offering to enterprise users.[38]

References

  1. ↑ "@ RISE Barclays NYC: Augur 101: When Ethereum Meets Prediction Markets". Youtube. June 9, 2016.
  2. 1 2 "Thiel Foundation Announces 2016 Thiel Fellows". Yahoo/Business Wire. June 21, 2016.
  3. 1 2 Despeignes, Peronet (October 11, 2015). "The Crowdsale, What's New and What's Next".
  4. 1 2 "Blockchain Prediction Market Augur Enters Beta - CoinDesk". 2016-03-14. Retrieved 2016-08-06.
  5. ↑ Despeignes, Peronet (July 13, 2015). "The Pressing Need for Augur".
  6. ↑ Sztorc, Paul (August 24, 2014). "Truthcoin: Trustless, Decentralized, Censorship-Proof, Incentive-Compatible, Scalable Cryptocurrency Prediction Marketplace" (PDF).
  7. ↑ Buterin, Vitalik (March 28, 2014). "SchellingCoin: A Minimal-Trust Universal Data Feed".
  8. ↑ "What is Reputation?". June 19, 2015.
  9. ↑ Krug, Joey (February 13, 2015). "Why Ethereum". Augur.net.
  10. ↑ Sztorc, Paul (2015), Oracles are the Real Smart Contracts, Truthcoin.info, retrieved 2015-10-12
  11. ↑ "What about parasitic contracts - will other Ethereum applications be able to use Augur's reporter/referee system?".
  12. ↑ Hertig, Alyssa (2015-04-21). "Augur Creates First Contract with Ethereum". CoinTelegraph.com.
  13. ↑ Sakich, Tony (May 20, 2015). "How Augur Works Video". Augur.net.
  14. ↑ Krug, Joey (June 16, 2015). "The Augur Alpha is Now Available To Download!". Augur.net.
  15. ↑ "Augur to issue 11 million REP tokens starting 17 August". Retrieved 2015-08-13.
  16. ↑ "The Augur Crowdsale". The Augur Crowdsale. Retrieved 2015-08-13.
  17. ↑ "Augur - Fund the Future". sale.augur.net. Retrieved 2015-08-28.
  18. ↑ Tapscott, Don, Alex (2016). Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. Portfolio. ISBN 978-1101980132.
  19. ↑ "Crowdsale bitcoin address, Blockchain.info".
  20. ↑ "Bitcoin Trends In The First Half Of 2015". The Coinbase Blog. Retrieved 2015-07-22.
  21. ↑ "Decentralized Prediction Market Augur Reaches XCS Finals in 'Breakthrough' Category". Retrieved 2015-06-17.
  22. ↑ "Blockchain Prediction Market Augur Elected as a 'Breakthrough' Finalist at Exponential Finance 2015 - Bitcoin Magazine". Retrieved 2015-06-17.
  23. ↑ Lott, Maxim (2015-08-20). "New tech promises government-proof prediction markets | Fox News". Retrieved 2016-07-29.
  24. ↑ "Augur May Become the Greatest Gambling Platform in History. Is There Anything the Government Can Do to Stop It?". 2015-08-11. Retrieved 2016-06-25.
  25. ↑ "Augur Could Become Racing's Worst Nightmare". September 13, 2015.
  26. ↑ "Mega-banks back Burr — Next-gen prediction market to test limits in D.C. — Get ready for more Greek drama — CFPB, New York DFS sue pension-advance lender (Archive: 8/21/15)". Retrieved 2015-08-21.
  27. ↑ "Vapor No More: Ethereum Has Launched". Retrieved 2015-08-01.
  28. ↑ "BitBeat: Ethereum Opens Its 'Frontier' for Business". Retrieved 2015-07-31.
  29. ↑ "Augur to issue 11 million REP tokens starting 17 August". Retrieved 2015-08-03.
  30. ↑ "Augur Bets on Bright Future for Blockchain Prediction Markets". Retrieved 2015-03-01.
  31. ↑ EconoTimes. "Cryptocurrency exchange Kraken adds support for Augur's Reputation tokens - EconoTimes". EconoTimes. Retrieved 2016-10-11.
  32. ↑ EconoTimes. "Jaxx blockchain wallet adds support for Augur's Reputation tokens - EconoTimes". EconoTimes. Retrieved 2016-10-11.
  33. ↑ Rizzo, Pete (March 1, 2015). "Augur Bets on Bright Future for Blockchain Prediction Markets". Coindesk.com.
  34. ↑ "@brian_armstrong augur". twitter.com. Retrieved 10 August 2015.
  35. ↑ "Tony Swish". Twitter. Retrieved 10 August 2015.
  36. ↑ "Why A Crowdsale Is Necessary For Augur To Work & Some Updates". Why A Crowdsale Is Necessary For Augur To Work & Some Updates. Retrieved 2015-08-13.
  37. ↑ "Azure Blockchain as a Service Update #6". azure.microsoft.com. Retrieved 2016-10-11.
  38. ↑ Allison, Ian (2016-03-15). "Ethereum-powered Augur brings its beta to Microsoft Azure's blockchain cloud". International Business Times UK. Retrieved 2016-10-11.

External links

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