Coin News

Dallas Mavericks owner Mark Cuban continued to shower praise on real-estate mogul Donald Trump's presidential campaign ahead of the Tuesday-night Fox Business Network Republican debate.

"One, he's assertive. Two, he's not afraid to say exactly what's on his mind," Cuban said during a Fox News interview. "I think the American people are definitely interested in somebody that will tell them the truth."

In fact, the "Shark Tank" star has been such an outspoken fan of Trump's front-running primary campaign that some people have urged him to join Trump's hypothetical general-election ticket.

In July, Cuban told Business Insider that he would consider being Trump's vice president but probably wouldn't ultimately do it.

Fox's Neil Cavuto further pressed Cuban on the topic during their Tuesday interview.

"Is it just silly conjecture? Would you ever entertain it if he ever approached you and said, 'You know what? We'd make a great one-two billionaire team," Cavuto asked.

"Yeah, there's no way that he would ask me," Cuban replied. "And I just don't see it as a reality at all. He knows I couldn't ever be a second fiddle. So I don't think it could happen."

Throughout the summer, Cuban frequently weighed in on the presidential race — and Trump in particular — via his Cyber Dust social-media app.

He said there is one word to describe Trump: "killer." He praised Trump as the best thing to happen in politics in a long time. And he once told Business Insider that Mavericks fans love that Trump is shaking up the 2016 contest. (In turn, Trump included some of Cuban's praise on the back cover of his new campaign book, "Crippled America.")

Cuban further opined on the presidential race during his conversation with Cavuto. The outspoken investor said the ultimate victor would be the candidate who demonstrates two qualities.

"One: leadership. Can you show that you're a leader? Right, because if you may have run a state or you may have been a senator, that doesn't necessarily then mean you have leadership qualities," he said. "Two: the vision you have for the country. Can you support what you're saying?"

Cuban added: "I think Donald's got a chance to stand strong from a business perspective that the others just don't have."

Watch below:

SEE ALSO: MARK CUBAN: I'm just playing around with presidential politics

Join the conversation about this story »

NOW WATCH: Check out the 'Shark Tank' spoof Mark Cuban sent us that replaces every judge with a clone of himself

While opinions on Bitcoin's future differ, most agree that the current scalability debate has become a mess. Trolling, misinformation, populism, vote manipulation, vocal minorities, censorship and other distractions have made it hard to find a signal above the noise.

And importantly, if protocol development is going to be driven by what seems like popular opinion on message boards, this could potentially ruin the whole Bitcoin project.

The essence of this problem, Yale researcher and Truthcoin Chief Scientist Paul Sztorc argues, is that “talk” does not scale.

“The real function of a debate is for people to examine each others' reasoning, and find some area of agreement, or maybe highlight areas where they don't agree,” Sztorc told Bitcoin Magazine.

“But debates do not scale,” he said. “It's literally O(n^2) scaling: With five people, you need at least 10 conversations in order to know that everyone is on the same page … with 50 people, you need at least 1,225 connections. If someone changes their mind or learns something new, that’s all reset. So it’s no surprise – to me – that the conversation is becoming socially dysfunctional at around this time.”

Luckily, Sztorc believes there is a solution for this problem: prediction markets.

Prediction Markets

The concept of prediction markets is not new, Bitcoin legend Hal Finney advocated them years ago.

Basically, prediction markets are markets for so-called “event derivatives,” which represent a possible future event. “Hillary Clinton will be elected president of the United States in 2016” could be such an event, for example. The relevant derivative might then be redeemable for one dollar if Hillary Clinton is indeed elected, but will be worthless if she is not elected. Up until the election, this derivative will be tradeable on the prediction market. As such, it will command a market price.

It then holds that this price would reflect the likelihood of Clinton becoming the next president, according to the market. If the Clinton token is worth 40 cents, the market gives her a 40 percent chance of winning the election. After all, if market participants expected a higher chance of her winning, they would buy these derivatives “at a bargain,” and the exchange rate would go up. And if market participants would expect a lower chance of her winning, they would sell (or short) these “expensive” derivatives, and the price would go down.

“The great thing about markets,” Sztorc explained, “is that they are incredibly decentralized – anyone can partake. This is good because, by definition, you don’t know who has what information, and people won’t want to give valuable info away for free. At the same time, markets present information that is unanimously and constantly acceptable. If you have a room full of 5,000 people, those who agree with the current rate would just do nothing. The price is ‘good enough,’ as far as they are concerned. Yet any person with a strong enough conviction can edit the price by buying or selling the event derivative, and update the exchange rate. They can improve the forecast and make money at the same time.”

The Great Noise Filter

Furthermore, prediction markets could be a great filter for uninformed opinion, or “noise.” Unlike message boards, chat rooms and mailing lists, partaking in a prediction market would come at a cost. Sztorc, therefore, expects that people who didn't invest the time and effort to really, deeply understand an issue won't get involved at all, as they would be unwilling to invest money, too.

Talk is cheap,” Sztorc argued. “But people who really don't know anything, or know how complicated a situation is, will probably not want to put their money down. And even if they do, even if a fool pushes the price around, there is now money to be made by well-informed people who can pull the market back toward realistic expectations.”

“The same is true for manipulation,” he said. “Everyone wants more money, while only a few people will want to knock a market in a certain direction. As such, markets inherently resist dishonesty. Unlike anything else, there is a force pulling the market rate towards reality. They just plain do a good job of getting the right answer, over time.”

Joint probability

Prediction markets can show us the expected future. But, much better, they can also be used to compare multiple expected futures.

Through funky constructions, it's possible to make predictions about specific scenarios. For instance: “If Hillary Clinton is the next president of the United States, then the stock market will rise.” Now, if Clinton is not elected president, anyone who bet on that scenario will get their money back, regardless of what the stock market does. It's only if she is elected, that the stock market comes into play. If Clinton is elected and the stock market then indeed rises, whomever predicted that correctly wins money. But if Clinton is elected and the stock market drops, they will lose money.

This also means that market participants can insure themselves against future events. Someone who holds stocks can insure himself against – say – a Donald Trump presidency, by betting that the stock market will drop if Trump wins. The bettor might still lose money on the stock market, but win money on the prediction market at the same time, canceling out his losses.

And, of course, these market rates will also be public for anyone to see. So now, prediction markets are not just predicting possible events, but consequences of possible events. While a ll presidential candidates will probably claim that the stock market will rise if they are elected, prediction markets reveal who the market believes is right. Rather than empty promises, voters can base their vote on market information.

Bitcoin Governance

So how is any of this relevant for Bitcoin's governance process?

Let’s take the block-size dispute as an example, and assume that everyone wants the exchange rate to go up. (Note that this is not necessarily true; some people value Bitcoin for other properties than its price. However, even then, the expected price could inform specific aspects of the debate, such as the security offered by the value of the mining reward.)​

First, a prediction market regarding bitcoin's price as resulting from the block-size limit could be utilized as a “hard fork insurance.” Lets say, for instance, that someone named Greg believes that bitcoin's exchange rate will drop if the block-size limit is increased. Greg doesn't want the bitcoin exchange rate to drop, because he holds a bunch of bitcoin. Therefore, Greg bets that if the block size is increased, the exchange rate will drop. If the block-size limit is then indeed increased, and the exchange rate indeed drops, Greg will win money. He would have effectively insured himself against that scenario.

That would be an advantage for Greg personally, as he wouldn't risk losing money. But it would also help the rest of us. After all, by making the trade, Greg has effectively stated his opinion, which is reflected in the exchange rate. Moreover, Greg could tell other people to insure themselves, or simply make his own insurance public. If people trust Greg's expertise enough, they will follow his lead, which adjusts the exchange rate even further.

But Greg is not the only one betting. Someone named Mike, who believes the exchange rate will rise if the block-size limit is increased, might be betting as well. And people who trust Mike's expertise might follow his lead instead. Now the prediction market reflects a potentially terrific aggregate of expertise, and their expectations of what's best for Bitcoin, offering a great guide for Bitcoin's development.

And there's an additional bonus. Lets imagine that Greg and Mike are talented programmers, working to improve Bitcoin or the ecosystem. Thanks to the prediction market, neither Greg nor Mike need to repeatedly enter into debates on message boards convincing everyone and their grandmother that increasing the block-size limit is either bad or good. After all, they have already insured themselves, and stated their opinion through their trade. Instead of wasting their time on Reddit, they can both get back to work.

No silver bullet

Of course, a prediction market won't solve Bitcoin's governance problem in and of itself. First, since Sztorc's Truthcoin is designed as a Bitcoin sidechain, there is one prediction that it can’t support. If Bitcoin breaks completely, or its exchange rate goes to zero, no payout will be possible, even if predicted correctly. Additionally, Sztorc's proposal relies on “ oracles” to insert the truth after an event has happened, which required a bit of trust in these oracles. (Sztorc believes we should be able to find enough reliable people to do this task, to tide us over until his larger “trustless orcale” project is completed.)

But, most importantly, prediction markets cannot govern Bitcoin in and of themselves. They can only advise – and maybe that’s for the best.

Prediction markets don't need to replace anything. You can still have your mailing list, you can still have your forum discussions, and prediction markets won't automatically change Bitcoin's code,” Sztorc emphasized. “But prediction markets do offer something called common knowledge. Everyone will know what the market expects to happen – and everyone will know that everyone knows. And how weird would it be if the prediction market says we'll see a huge exchange rate collapse if we either do or don’t fork to Bitcoin XT, and yet some developers still keep fighting or pushing it?”

The post How Prediction Markets Could Guide Bitcoin's Future appeared first on Bitcoin Magazine.

The US Marshals Service has revealed that its fourth and final auction of confiscated Silk Road bitcoins resulted in four winners.

Washington state has issued a new warning to potential buyers of digital currencies, citing its volatility as a potential consumer danger.

Visa Europe Collab, the global hub for Visa Europe International, and Epiphyte, provider of a block-chain-based software as a solution (SaaS) for immediate financial transactions, are combining their expertise to develop a more efficient global remittance service. The companies are working on a proof-of-concept to use bitcoin and block chain capabilities to make remittance services more efficient and easier to use. Epiphyte specializes in distributed ledger solutions for the mainstream financial market. The proof of concept is scheduled for completion in the next two months.   Visa Europe Collab sees an opportunity to create a better remittance service for both the receiver […]

The post Visa Europe Collab Partners With Epiphyte On Using Block Chain To Improve Global Remittance appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

The adoption of block chain technology will revolutionize capital markets as early as next year, according to a report by TABB research carried by CNBC TV. The report noted that the adoption is not a matter of if, but when. The TABB Group is a New York City-based company that provides insight on securities and investment management. The block chain, the report noted, serves as a big, decentralized ledger that records transaction information and stores it on a global network that can’t be tampered with. It noted that R3, a fintech company, leads a 20-bank consortium that is developing a framework […]

The post Block Chain Will Revolutionize Capital Markets Beginning In 2016 appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

A new project is seeking to disrupt the URL management space with a Bitly alternative that rewards users with bitcoin.

The price of bitcoin rises and falls. But a better barometer of its value is how much the world is using bitcoin.

The post Everyone Says Bitcoin Is Back. But It Never Really Left appeared first on WIRED.

A reader wrote in to CCN, concerned about what is an obvious scam to a veteran Bitcoiner, but might actually rope new folks in with ease. The concerned reader wrote: Basically they are building a pyramid scheme (sorry, I mean binary member system), where you can buy in and get some hashing power from their cloud mining service. Also they claim, that they will release a new cryptocurrency (S-Coin), which only they will be mining. More absurdly - when the coin comes out, they claim that it will have a value of 1€ and after some time even more. Also […]

The post Scam Alert – Coinspace appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

The Washington State Department of Financial Institutions (DFI) has warned consumers about investing in bitcoin and digital currency, along with marijuana and binary contract investments. The notice has been posted on the department’s “news and alerts” section and is titled, “Beware of the Next Big Investment.” Marijuana, binary options and digital currency have recently emerged as investments that buyers and sellers hope will be “the next big thing,” the alert notes. The notice addresses bitcoin after first describing the other two investments and devotes significantly less information about bitcoin and digital currency. Consumer Media Reports The Alert The notice might […]

The post Washington Consumer Alert About Bitcoin Investing Misses The Mark appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

UK Chancellor George Osborne who has previously declared his intention to explore digital currencies like Bitcoin has now reiterated his stance during a recent conference in London. The UK’s Chancellor of the Exchequer, George Osborne spoke about digital currencies at the Bank of England’s Open Forum conference. The Chancellor reiterated the UK Treasury’s recent stance of welcoming Fintech investment and opening the doors for the UK to be a major destination for new financial technology. As reported by The Financial Times, Osborne said: I want the U.K. to be the global center of fintech. We will go out of our […]

The post UK Chancellor Sees a Big Future for Digital Currencies appeared first on CCN: Financial Bitcoin & Cryptocurrency News.