Show HN: Zentrade.io – Bitcoin Prediction Markets | Hacker News Reader

Show HN: Zentrade.io – Bitcoin Prediction Markets

zentrade.io

15 pointsgtsui20 comments

So this has the same flaw that Predictious has. It's building a BTC bank in addition to a prediction market.

That's the easiest thing to build, coming from a world of traditional fiat money banking. But BTC enables something superior - 2of3 transactions between betters. We create a 3 way transaction - Long says "I want the money". Short says "I want the money". When the bet is concluded the arbitrator says "Long won, give me 1%."

The arbitrator can never go insolvent - in fact, the arbitrator never needs to hold a single bitcoin.

You should check out https://github.com/psztorc/Truthcoin , which builds up on that idea to design a fully decentralized prediction market.

Or even better than multisig, on-blockchain transactions and Truthcoin: http://www.reddit.com/r/Bitcoin/comments/1ycjdi/whitepaper_d...

What if the loser refuses to pay? How does the arbitrator get the coins without holding coins?

There is no such thing. In a 2 out of 3 transaction, 2 out of 3 parties have to agree for the transaction to happen. Thus, if the winner agrees and the arbitrator also agrees, the transactions is conducted. It's a cryptographically secure agreement.

What if the arbitrator is colluding with the loser?

This problem is not solved via 2of3 transactions.

It can be partially mitigated by requiring multiple arbitrators (e.g. a 4/5 transaction with 3 hopefluly independent arbitrators).

Unfortunately, there's no really good way of establishing that two pseudonyms are not held by the same person, in a decentralized system. Doubly so when legal enforcement isn't available. Of course abuse is harder the more arbitrators you incorporate, but expense and difficulty are higher as well.

That's a human problem, not a Bitcoin problem.

1. How does Zentrade differ from Predictious?

2. I won't send bitcoin to a site that can't prove it controls the keys for 100% of customer deposits.

3. Obama vs. Romney?

1. Predictious uses the more traditional market-making model (as in financial markets). This is fine in more liquid markets, but in markets with habitually sparse bettors as is usual with prediction markets, it is better to have an in-theory infinite liquidity betting pattern (e.g. modified parimutuel, as Zentrade uses) so that you can make your bets at any time rather than waiting for someone to publish a price.

2. Reliability and trust are big things to us. How would you suggest we implement this to show customers?

3. 2016? Not sure I'd be betting on either there...

2. https://github.com/olalonde/blind-solvency-proof, https://github.com/ConceptPending/proveit

Parimutuel betting pools are less attractive to truly savvy bettors, profit-motivated and deep-pocketed, because there's no way to be sure your advanced insight, at a particular point in time, will have a positive expectation when the betting is done.

Just signed up.

One suggestion: two-factor authentication. After so many hacks, 2FA should be available on any site that holds users' bitcoin.

Thanks for the suggestion! I'll look into implementing that.

Check out Authy.

Coinbase uses it and it's really user friendly.

Agreed. Authy is great.

you mean two factor authentication for signups? or for what specifically?

he means for signing in after you've registered.

No transparency? No thanks.

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