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Comment by jbrot | Hacker News Reader

A related concept I’ve read about is the “Schelling Coin,” where a crypto contract accepts community input and then pays out to everyone who submitted the most popular answer. The idea being that you label the contract with something like “temperature in Chicago” which causes the actual temperature in Chicago to be the only value everyone is likely to agree on (i.e., the real value becomes the Schelling point)—thereby allowing for decentralized embedding of real world information into the block chain.

I’m unclear if this mechanism is actually in use, though, and I’ve seen a convincing attack proposed which might explain why Schelling coins don’t seem to be in widespread use.

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I've worked in the space, and I don't know of any robust method in use that is using Schelling points to solve the Oracle Problem (without the help of any "trusted dispute resolution").

It's done to some degree with prediction markets, but the main problems those generally have are that they predict binary events, which just like binary options are prone to fraud. Even when used for continous ranges (like your temperature example), they generally suffer from semantic "fuzziness" if they are expressed in natural language.

Prediction markets also exist for non-binary events, whether a finite set of outcomes, countably infinite, continuous, or beyond.

Instead, the problem is they still require an oracle for the actual event outcome. That is, everyone is betting on some event, but once it happens, an oracle is needed to tell the market what the actual outcome was. So they don't solve the oracle problem. They're another application that can make use of oracles.

The Schelling point works when there is no communication. But how do you know if your community members are not communicating?

That's one big problem for sure. Another is when the information is costly to gather, and there is a Schelling point for people without the information. For example, we all get in the habit of saying "10 degrees" whenever anyone asks the temperature of any city.

Similar, there are cases like "What is the capital of the state of New York?" A Schelling-point answer might easily be New York City, even though the correct answer is Albany. There's research on this stuff in the "peer prediction" a.k.a. "information elicitation without verification" literature, e.g. Prelec, Seung, McCoy 2017: https://marketing.wharton.upenn.edu/wp-content/uploads/2017/...

Sounds vulnerable to a 51% attack. ;)

Since such oracles will probably be used for insurance contracts, that risk can be priced in.

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