Ethereum and Democratizing Innovation

Introduction

Ethereum is a groundbreaking software innovation designed as a developer-friendly platform for the creation of DApps, aka, decentralized applications. Ethereum draws inspiration from the success and staying power of earlier decentralized Internet technologies such as BitTorrent for file sharing and Bitcoin for cryptocurrency. The ultimate vision of Ethereum is to decentralize the Internet.

Why decentralization?

With a decentralized architecture, DApps built on the Ethereum platform will be impervious to censorship and thereby allow developers to freely create useful applications without concern of being shut down.  Although built from scratch and unique in implementation, Ethereum uses some innovations from Bitcoin’s architecture, including a decentralized consensus mechanism to unbundle trust, a distributed blockchain ledger to record contracts, and its own crypto-token, ether, to fuel the network [1]. 

Countless possible DApps

If Ethereum delivers as promised, it will allow all kinds of businesses to be reimagined and reengineered, taking advantage of the cost savings, enhanced security, and censorship-proof aspects of a decentralized blockchain platform. Ethereum will create new patterns and destroy old systems. It will even allow innovations that have been suppressed by the status quo to emerge and flourish [2]. Prediction markets are just such a field, which is why I chose to explore and discuss them in this article. Academic research has clearly shown the potential utility of prediction markets, but extant gambling laws have stifled pragmatic implementations because of the economic incentives involved. The following is a sales pitch for a fictional application called SEER, which is built on the Ethereum platform and specializes in forecasting all manner of events [3].

THE PITCH

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Value Proposition

  1. Could your business or enterprise improve its bottom line if it had better ways to deal with market uncertainty and more accurate ways to predict future outcomes?
  2. Do you rely on expensive expertise that oftentimes fails to make accurate forecasts?
  3. Are you a subject matter expert that would like to improve your reputation and make money providing your opinion?

SEER can help on all three fronts. SEER is an exciting new and dynamic DApp that makes the “wisdom of crowds” [4] openly available to all.  Harness the collective consciousness of humankind in the fields of politics, world events, finance, economics, high-tech, leisure, weather, you name it, and it can be better forecast using SEER.

Our Dilemma

We here at SEER want to make the world a better place, and call upon you to see our vision and join in. This is a global group effort that promises to benefit all. Since the turn of the millennium, humankind has clearly plunged head first into the Information Age. In this Internet and multimedia era, we all suffer from information overload and have our own unique methods for dealing with it. Some of us tune out completely, while others retreat to the safety of biased sources that reinforce preconceived views. But what about the truth? How about an unbiased and realistic forecast? What if there was a better way to source information and predictions?

Crowdsourced Predictions

Like many of you, we became perplexed and overwhelmed by the massive amount of information available via the media and Internet. In search of a solution, we came across the concept of crowdsourced forecasting and predictions. Although Aristotle is credited with being the first to write about the “wisdom of crowds,” research proving the concept is first credited to statistician Francis Galton. In 1906 Galton observed a contest at the local fairgrounds awarding a prize to whomever could come closest to the actual weight of a butchered ox. Much to his surprise, Galton discovered that the median value of guesses was accurate to within one percent [5]. Since then, his results have been replicated many times over, and we soon discovered the reputation of the Iowa Electronic Markets. IEM is consistently more accurate than Gallop polls in predicting election outcomes [6]. A short answer as to why, is because people who use IEM are “putting their money where their mouth is.”

Academic Research

Dr. Robin Hanson of GMU makes a cogent case for using betting to properly incentivize truthful analyses, which can then be globally aggregated to forecast policy alternatives, a kind a democratic free speech to help guide political decisions for the greater good [7,8]. Hanson coined the term “idea futures,” aka, prediction or information markets.  Many other academics concur with Hanson on the benefits of such markets [9,10]. SEER is an ideal platform to realize the potential of idea futures.  Controversy aside, SEER is built on a decentralized, censorship-resistant global platform that will allow diverse views to be aggregated into non-biased forecasts.

Testimonials

The SEER DApp technology is quickly gaining recognition as a revolutionary innovation from thought leaders across the globe.  Below is a small sample of the many endorsements received to date.

“SEER condenses the current consensus about complex issues quickly and cheaply into a single number—an accurate probability of the outcome coming true.”  #1 Forecasting Expert

“SEER rewards providers of valuable information, no matter the source, no matter their location, while muting the voice of false pundits, who will quickly go broke trying to spread misinformation.” —#1 Iconoclast

“A better, more predictable future for everyone and all—the true democratization of information.  SEER: Survey, Estimate, and Effect Reality in The Age of Information.”— #1 Blockchain Developer

Make Your Mark & Shape Your Future

Help shape the future and sign up as a beta tester for the SEER DApp built on the secure, decentralized, blackout-proof Ethereum platform.  Download the SEER client now. Ask the questions you want answered to a diverse, global audience, and crowdsource accurate forecasts. Let SEER improve your decision making by monitoring the wisdom of crowds. Build your reputation as a subject matter expert and earn income for correct predictions. Choose to remain anonymous, or proclaim and prove your expert status to the public.  Earn rewards for validating outcomes.  Survey, Estimate, and Effect Reality—be a SEER!

If you are interested in a real life implementation of prediction markets based on Ethereum, please check out The Augur Project [3].

Conclusion

A new and improved Internet, as promised by Ethereum, will allow a global creative commons and truly free press to flourish, immune to the heavy-handed political elites and powerful corporate interests that are sometimes aligned against the best interests of humankind as a whole. Innovative and secure P2P applications will thrive that bestow incalculable benefits to users. Trust will be embedded in blockchain technology, and better ways to democratize information, e.g., prediction markets such as SEER, will help prepare and better inform people of the shape of things to come. This bright vision will be accelerated because Ethereum has chosen an open source path of development, inspiring a devoted community of lead users to collectively collaborate in the creation a truly decentralized Internet.

Abbreviations

aka also known as

DApp Decentralized Application

GMU George Mason University

IEM Iowa Electronic Markets

P2P Peer-To-Peer

References

  1. Ethereum website. (n.d.) Retrieved from https://www.ethereum.org/ 
  2. Mougayar, W. (n.d.) Retrieved from https://blog.ethereum.org/2015/05/24/the-business-imperative-behind-the-ethereum-vision/
  3. Augur website. (n.d.) Retrieved from http://www.augur.net/
  4. Surowiecki, J. (August 2005). The Wisdom of Crowds. Anchor Books eBooks.
  5. About Wisdom of the Crowd. (n.d.) Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Wisdom_of_the_crowd
  6. Percival, E. (2007, September 19). Iowa Electronic Markets best poll data in accuracy. The Pioneer. Retrieved from http://whitmanpioneer.com/category-less/2007/09/19/iowa-electronic-markets-best-poll-data-in-accuracy/
  7. Hanson, R. (n.d.) Idea Futures. Retrieved from http://mason.gmu.edu/~rhanson/ideafutures.html
  8. Hanson, R. (n.d.) Policy Markets Should Be Free Speech. Retrieved from http://mason.gmu.edu/~rhanson/iffreespeech.html
  9. The Promise of Prediction Markets. (2008, May 16). Science. Retrieved from https://code.ga-fl.net/cgaspoz/phd/raw/0236395f3d8e099235a98f2088bc849f954dc339/papers/Arrow2008.pdf
  10. About Prediction Markets. (n.d.) Retrieved from https://scholar.google.es/scholar?hl=en&q=prediction+markets&btnG=&as_sdt=1%2C5&as_sdtp=

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