Quote from: bayes on February 21, 2014, 02:51:27 PM

I don't think it's realistic to expect Truthcoin to do anything but aggregate obvious insights regarding future events that bettors can elsewhere gain as much exposure as they want to.

Surely you mean "can't elsewhere gain"?

Quote from: bayes on February 21, 2014, 02:51:27 PM

The only markets on InTrade that received any volume were the election markets. There wasn't any other simple way for a bettor to gain exposure to those events. InTrade got shut down for pissing off the CFTC by offering prediction markets on the price of commodities. Those markets received no volume.

The incentive structure for Authors (the people who create a prediction market) is that they pay fees up front, and get (1/2) of 1% of the total market lifetime trading volume. So any markets which are failing just will stop being made, and new markets will be tried by entrepreneurs who believe in them.

Nonetheless, if markets were created with low or even ZERO volume, these markets still have permanent liquidity thanks to LMSR (a clever but almost-completely-overlooked PM invention). One can always make a trade at the current market price, changing it to their preferred price (and probabilistic expectation), and profit from that trade (if they are right), even if they are the ONLY trader. So if you had insight you could still use Truthcoin to profit from that insight, in addition to speculating elsewhere. In fact (if someone else created the market) you'd have to be very lazy not to make a profitable trade, as using Bitcoin is far easier than opening an InTrade account. You could even make a 'billion dollar' trade, but that trade would itself cost you roughly a billion dollars as it would crash the price of your state into 1 almost instantaneously.

So even in this case the PM would aggregate all insights, obvious or otherwise.

If other people really want your info, they can make a very liquid market via donations ("Amping Beta") or dominance assurance contract, allowing you to make reap large profits on your large trades. Of course, to make a billion dollars in profit, you'd need to hope that other people donated at least that much, which they would only do if they cared about what you had to say.