Augur Whitepaper Notes

My notes on the Augur Whitepaper by Dr. Jack Peterson & Joseph Krug.

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 fore- cast incorrectly, they lose money.

Our goal here is to provide a blueprint of a decentral- ized 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 [the Truthcoin white paper].

  • Built as an extension of Bitcoin core

  • Adds betting and consensus mechanisms

  • Intended to be a sidechain of Bitcoin

  • Replaces “VoteCoins” from Truthcoin with “Reputation”

  • Every transaction input and output field has a “units” field that can be “Bitcoin” (transferred through the pegged sidechain mechanism), “Reputation” or another currency used to hedge against long-term volatility