Augur is a decentralized prediction market where users can make bets about future events, then collect money if their predictions are correct.
The platform is designed to be used to predict future events – say, that the price of bitcoin will be above $20,000 by the end of 2018 or that the president will be impeached. However, like any decentralized platform, there’s no limit to what kind of bets are available through the platform – and that’s why it’s no surprise to already see multiple assassination markets live on the platform.
As pointed out by Whale Panda (@WhalePanda), “there are now multiple assassination markets live” on Augur. WhalePanda didn’t post a screenshot or link to the markets “for obvious reasons.”
Assassination markets, as seen on Augur, involve placing a bet – using Augur’s anonymous REP cryptocurrency – on the date of death of a given individual. If the individual dies on that date, then the bet pays out.
This might seem like harmless fun: you can bet on whether an older celebrity will die of natural causes this year or next year, for example. However, it doesn’t take much searching to see a moral dilemma here, where someone could make a significant amount of money by assassinating someone. That’s an assassination market.
The Launch of Assassination Markets on Augur Was Probably Inevitable
The launch of assassination markets on Augur seemed inevitable: Augur is a decentralized network where people can make bets on anything. As a decentralized network, it’s up to the community to govern itself.
Augur’s community has long anticipated a problem with this governance system, however: what happens when the platform inevitably hosts bets for events that are illegal or unethical? What happens when someone posts a bet for a murder, an assassination, or a terrorist attack?
As pointed out by Luke Martin (@VentureCoinist), Augur needs to decide if it will, “step in and turn off certain markets that are illegal”, including assassination or terrorist markets. However, if they step in and turn off certain markets for this reason, then the network is also sacrificing its decentralization. “Should it even be decentralized if that’s the case?”, asks Martin.
In response to the controversy, bitcoin startup founder Ragnar Lifthrasir made three predictions about the future of the Augur platform, including:
“- A US government agency will force Augur to comply with online gambling regulations
– Augur will switch from Ethereum to a different blockchain due to network congestion and scaling issues
– Augur will spur copycats or forks, esp Eastern Europe”
That prediction was made earlier today. We’ll see if it’s true over the coming weeks.
One of the major issues with Augur is that its founders are US citizens. Yes, the Augur network is decentralized. Augur’s founders might argue that they’re not responsible for content posted on the network. However, as Matt Odell pointed out on Twitter, Silk Road mastermind Ross Ulbricht was convicted of all 7 charges for running the world’s largest decentralized drug marketplace on the dark web.
“’We don’t know what will happen if you run a centralized project that breaks US regs while living in the US’ You sure about that?”
wrote Odell, linking to a headline featuring Ross Ulbricht’s conviction.
In other words, there’s already a precedent for what happens to US citizens who run decentralized networks featuring illegal activities.
Lifthrasir, meanwhile, insists that there are ways the founders can regulate the network:
“Augur isn’t decentralized, or at least to the extent [that] the government can’t enforce its laws,” explains Lifthrasir on Twitter in a reply to his original tweet above. “Augur’s founders are US citizens for one thing. Regulators can find the AUG token an unregistered security. AFAIK, the code allows for some control of transactions or funds. Etc.”
Launching a network where people can bet on anything seems like a good idea at first glance. Unfortunately, this is the internet, and it was inevitable that such a platform would be used for illegal activities. We’re already seeing multiple assassination markets on the Augur platform.
It’s not just assassination markets that could cause problems on Augur. As someone pointed out on Augur’s Stack Exchange page in December 2017, a report could name the Augur platform for nefarious moneymaking purposes:
“A Reporter buys vast sums of REP, and then reports falsely on a market (undermining the system at great financial cost). The falsely settled market triggers a condition in a smart contract (for example, an insurance policy), resulting in net financial gain for the attacker.”
Ultimately, Augur is facing a catch-22 situation. If Augur is truly decentralized, then it will let the network govern itself and allow any bets to exist on the platform, thereby opening itself up to legal repercussions. If Augur wants to avoid legal repercussions, then it will need to remove certain bets from its platform, thus indicating the end of pure decentralization.
Stay tuned to see where Augur goes in its first few weeks of launch. It will be interesting to see how Augur deals with assassination markets.