Augur Whitepaper - Decentralized Platform for Prediction Markets

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Augur

A Decentralized, Open-Source Platform for Prediction Markets
  • Dr. Jack Peterson
  • Joseph Krug
Abstract

Augur is a trustless, decentralized platform for prediction markets. It is an extension of Bitcoin Core’s source code which preserves as much of Bitcoin’s proven code and security as possible. Each feature required for prediction markets is constructed from Bitcoin’s input/output-style transactions.

Introduction

A prediction market is a place where individuals can wager on the outcomes of future events. Those who fore- cast the outcome correctly win money, and if they forecast incorrectly, they lose money. People value money, so they are incentivized to forecast such outcomes as accurately as they can. Thus, the price of a prediction market can serve as an excellent indicator of how likely an event is to occur. Augur is a decentralized platform for prediction markets.

Our goal here is to provide a blueprint of a decentralized prediction market using Bitcoin’s input/output-style transactions. Many theoretical details of this project, such as its game-theoretic underpinning, are touched on lightly or not at all. This work builds on (and is intended to be read as a companion to) the theoretical foundation established in.
 
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