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Comment by Moshe_Silnorin | Hacker News Reader

I can't think of one that doesn't involve flouting regulations. Though we have truly awful regulations. Prediction markets are the only reason I am interested.

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What inefficiencies are closed by using ethereum for prediction markets?

Having to pay for taxes, employees, hosting, ddos protection, lawyers, etc.

Your app does not rely on a counterparty anymore. You have access to the blockchain, you have access to the prediction market. Think of all the countries where prediction markets (aka betting) is forbidden.

Of course, this is not exclusive to ethereum, but they seem to be the blockchain which is both highly adopted and the one with the most features (I think they'll be the first to offer a turing complete language for programming smart contracts)

You need an oracle for prediction markets to function. Voting on the truth doesn't work, you will be sybil attacked into oblivion. Is there an oracle present in these contracts? If there is, why wouldn't basic multi-sig work just as well?

Yes, the Oracle problem is the elephant in the room. Augur tries to make it work by creating a new reputation token that accrues to oracles that provide true information (so effectively paying people to be honest), but I'm not sure where development is it - it seems pretty slow.

TruthCoin style oracles look like they might work. I think they are worth trying but wouldn't be surprised if they failed.

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