Sofiko is a freelance fintech copywriter at Coinspeaker. With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.
Decentralized prediction protocol Augur, which finally launched in full July 9, has got under fire for speculating on death benefits.
An advanced layer of decentralization delivered by blockchains has forever tarnished reputation of the cutting-edge technology with malicious activities such as money laundering and terrorist financing. However, while governments are seeking ways to defeat the most evident consequences of anonymous payment mechanism, the developers of Augur marketplace has created another ethical challenge for digital society.
Earlier this month Coinspeaker reported Ethereum-based betting protocol Augur has rolled out following almost two years of beta version. The peer-to-peer prediction market platform, that was one of the first ICOs in the history on the Ethereum blockchain, allows users to bet on the outcomes of real-world events from World Cup games to the weather.
On the other side of spectrum, the project represents a handy tool for governance and investment due to crowdsourced useful knowledge that can be used for decision-making process. All in all Augur has been sparking immense interest from all corners of the crypto community, collecting over $2 million in open interest on its Ethereum DApp.
Nevertheless, from the very beginning of the project some said it inevitably would became a harbor for unethical markets. Among them, Bitcoin developer Matt Odell notes, are assassination markets which have already begun appearing on Augur since the launch. This kind of markets enables users to gamble on the fates of prominent politicians, entrepreneurs and celebrities wherein some cases explicitly specify assassination. The betting on targeting individuals broadens with mass shootings and terrorist attacks with certain minimum numbers of casualties will occur.
Obviously, assassination markets are against the law, but the decentralized design of uncensorable Augur platform makes it resistant to legal hurdles. After two weeks since the launch, the platform’s developers have possessed a “kill switch” that could lock up all contracts on the network in the event of a critical bug and save the platform from falling prey to another DAO hack situation.
The platform’s “kill switch” also means that no single entity can control the network, therefore making it impossible for governments to o threaten Augur’s creators with prosecution in order to alter or shut the platform down.
Notably any assassination market that attracts a sufficient amount of bets would undoubtedly draw attention and serve as a fairly clear warning to any intended target. Consequently, the mere presence of these markets makes it more likely that these events will occur, however slim that increase may be. Yet Augur assassination market is rather unpopular bet on the platform, since only 50 shares have been traded on it as of the time of writing.
While Augur supporters claims the decentralized platform has nothing to do with illegal markets surfaced on the Augur platform, many have also compared the platform to the propagation of encryption and cryptocurrency technologies being used for boosting criminal activities.
In response to allegations, Augur’s developers once again stressed the decentralized design of the platform saying the network relies on the “wisdom of the crowd” to determine the outcome of markets. It also relies on the crowd to rule on whether markets are not ethical. Reporters — the mass of for-profit individuals on the network who verify the outcome of events — can flag individual markets as unethical, preventing any bettors from profiting from them. Alternatively, the ban of unethical market that leads to a consensus breaking can levy fines on individual reporters.