Distributed Capital Research Report (6): Forecast on the chain chain Reloaded into the market, or as a killer application


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Author: Distributed Capital analyst Huang Qiao Meng Hankshuang90n

Recently, ICO and digital currency in the ascendant. According to statistics, ICO global financing has reached 1.7 billion US dollars, and its creation of digital assets together with Bitcoin, the ether square of these digital money giants together, the market value has more than 150 billion US dollars. However, for the public, such a huge amount of the current role of digital assets or speculative coin-based, the actual use of the scene can be very few.n
nThus, I believe that at this stage, to allow the public to use digital money, into the life of the application will have great potential. Today we have to explore the forecast on the chain of chains to meet this standard. It can be said that the market is predicted to be a star chain application, several projects have already attracted the attention of the public. Forecasting Market Applications Augur is the first application on the etherfront, and Gnosis has raised 250,000 dollars in 10 minutes, valued at nearly $ 300 million.n
nSo, what is the so-called forecast market in the end, predict why the market must use the block chain, the current situation of several projects to predict the ultimate meaning of the market and where the future? Today we come together to discussn
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nPredict the meaning and characteristics of the marketn
nThe forecast market (also known as the information market, decision market, think futures, event derivative or virtual market) is a trading market designed to trade the possibility of different outcomes by Robin Hanson, the father of the US forecast market.n
nIn fact, the forecast market is to vote in the way to predict the future, where you vote on behalf of your attitude towards the results, how much you vote on behalf of your confidence in the occurrence of this result. In essence, the predictive market can help transform the knowledge and experience of the public into wisdom.n
nIf scientific terms are explained, the forecast market is based on market principles to collect the confidence and judgment of the parties involved in the same transaction, resulting in a prediction of the future outcome of the event. We can compare the forecast market with the stock market, which is pricing the expected future earnings of the stock, which is pricing the expected results for future events.n
nWe can use an example to illustrate how the market is predicted to gather the wisdom of the group to predict:n
nAssuming that in the forecast market, it is predicted that the initial price of the typhoon this year can reach level 8 is $ 1, and the current contract price is $ 0.7, which means that the market participants believe that the typhoon can reach the probability of more than 8 Is 70%, accordingly, the typhoon failed to reach 8 level contract price is 0.3 yuan, the corresponding probability is 30%.n
nIf the typhoon proved to have reached more than 8, such as this year’s super typhoon “day pigeon” up to 10, then the winner of the corresponding profit (1-0.6) yuan. In the price of the game, the market will gradually form a consensus, participants (such as engaged in weather research experts and scholars, experienced fishermen, etc.) was won willing to encourage, will maximize their understanding of the situation and experience to make judgments, that Can reach the 8 level can buy Yes contract, and do not agree to buy No contract, which means that the market brings together all the wisdom of the participants.n
nSeemingly simple to predict the market behind the deep economic theory. Specifically, there are two theoretical support to predict the operation of the market. Is an effective capital market hypothesis)n
nCapital Markets Hypothesis, ECMH) and the Hayek Hypothesis.n
nThese assumptions explain the integration of information through the collection, the market price can accurately reflect the probability of occurrence of future results. According to ECMH, the capital market is the most effective and real-time way to reflect the information of individual stocks and the entire stock market, while Hayeke assumes that market prices are an effective means of collecting discrete information, even if people are on their own environment and counterparty The knowledge is limited and the market is still valid.n
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nPredict the accuracy of the marketn
nAs a result of the wisdom of the masses, the market can predict to a certain extent quite accurate, in the non-block chain forecast market practice, we have seen a lot of examples.n
nFirst, the forecast market was used as a presidential election in the United States, and the University of Iowa conducted a predictive market experiment, which showed that the forecast market was accurate in the 74% case compared to ordinary polls.n
nSecond, the United States Hollywood has a movie box office forecast market, called the Hollywood stock exchange. The classic war is at the 2007 Oscar awards ceremony, when the Oscar a total of 39 nominations, the Hollywood Stock Exchange through the transaction price ranking, successfully predicted the 32 nominations, and in the awards ceremony before the successful prediction of eight awards Of the seven.n
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nPredict why the market is to use block chains?n
nAs a block of the original application of the chain, the market is expected to give full play to the block chain as a trusted machine characteristics, to solve the traditional forecast market in the self-evident white, globalization, clearing and other aspects of pain points.n
nSpecifically, the traditional forecast market has some of the following pain points: First, the central platform can not self-evident innocence, many platforms are suspected to manipulate the market, modify the data, it is difficult to win the trust of the user. Second, the market is expected to be subject to strict financial regulation since its inception, resulting in a lack of user volume and size of transactions, being left out of the mainstream market, such as the famous intrade.com is not in line with the Bank of America law and was closed. At the same time, the center of the platform in the clearing of the high cost of the field.n
nIf the use of the block chain, the first block on the chain of data on the whole network consensus, not tamper with the characteristics of the forecast platform to self-evident innocence. Second, the distributed structure also makes the forecast market has global liquidity, can attract massive users. At the same time, the chain can be intelligent contract settlement, reducing costs. Finally, the chain-based forecasting market, due to its tokens incentive mechanism, can motivate the intellectual community and attract more professionals to participate.n
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nPredict the market Dapp’s past lifen
nThe chain of predictions on the chain market was first born in 2014, the earliest project was Truthcoin, the founder of intrade.com was put off for practical use of the first block chain to predict the market concept. After the rise of the ethertop, Augur predicted that the market became the first Dapp application on the etherfront, after which Gnosis finished ICO as a star project this year. Recently, for the domestic market began to predict the birth, such as the recent domestic Delphy and so on.n
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nTruthcoinn
nTruthcoin is the founder of the block chain forecasting market concept, based on the Bitcoin block chain, founded by Paul Sztorc, a visiting scholar at the Yale University School of Economics, and Truthcoin proposed to anticipate the market in resolving disputes, policy advice, insurance, financial derivatives, etc. Aspects of the application. But for various reasons, the project did not do it in the end, but its ideas for the future after the market has laid the foundation.n
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nAugurn
nAugur was co-created by Joey Krug and Jack Peterson to the center of the forecast market, the Truthcoin concept carried out. Augur completed the ICO in 2014, and the release of the ethertown tokens was called Reputationn
n(REP), REP’s constant supply of 11 million, of which 80% raised $ 5.3 million, these tokens used to report the results of the forecast market events.n
nIn order to ensure that the forecast event is fair and reasonable, all the forecasting market will involve a chain of real data on the chain of the process, in this mechanism Augur choose the way the token holders to vote to maintain the way to report the pool, that All active REP holders must report the results of random events. In this report pool, the holder of the reward REP can obtain a commission to predict the cost of the market transaction, but if the reporter is confirmed to lie, he will receive a penalty and lose some of the token.n
nObjectively speaking, although this approach to achieve the effect of the center, but in practice, very low efficiency, after the Gnosis will no longer use this way.n
nAt present, Augur market value of 220 million US dollars, the original price of about 0.6 US dollars, the current price of 26 dollars. Technology version, Augur already has a web version and APP version, but still relatively junior. Augur on the theme of the forecast to the main currency and sports-based, user activity is not high.n
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nGnosisn
nGnosis by Martin

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