Welcome to Augur, the Cryptocurrency Death Market Where You Can Bet on a Donald Trump Assassination

In one niche corner of the cryptocurrency world, an ethical debate is raging. The topic of contention is not exchange rates or squabbles over which virtual money is king, but so-called "assassination markets" where users can place bets on the likelihood of celebrity deaths.

So far, U.S. president Donald Trump, Amazon CEO Jeff Bezos, actor Betty White and senator John McCain have been the subject of death predictions on a new platform called Augur. Launched this month by a non-profit called the Forecast Foundation, the service is powered on the Ethereum blockchain and designed to place wagers on the chance of events coming true. "Predict the next election, short a cryptocurrency, or hedge against disaster," the pitch reads.

Augur is a free, open source software for users to create their own prediction markets. Contracts use the Ethereum blockchain, which is a form of distributed leger technology that records all transactions. The controversy over its "assassination markets"—not a totally new phenomenon—has been fueled by the platform developers' claims that they do not have the ability to "censor, restrict, control, modify, change, revoke, terminate or make any changes to markets."

So, who enforces the rules? Indeed, are there any rules? On Reddit, lengthy threads are now emerging about potential criminality and how the platform can effectively be policed. "There doesn't appear to be a way to tag these markets as unethical right now," one person complained. "Maybe I'm confused but isn't that the point of a decentralized system?" blasted one response.

Donald Trump
U.S. President Donald Trump addresses a cabinet meeting at the White House in Washington, U.S., July 18, 2018. Trump was listed on one so-called "assassination market." REUTERS/Leah Millis

On Augur, trading is based around the listed events; everything from weather to eSports. Bets can be placed to "go long" on an outcome or people can short (bet against) the likely outcome. The platform has its own cryptocurrency called Reputation (REP)—used to settle disputes.

Holders of this currency are the guardian angels; the ecosystem's policing team by default. They get a cut of the settlement fee, but will be punished financially if they misreport outcomes.

In terms of the assassination markets, the worst-case scenario would be a user gaming the system to make money on the outcome of an event. One extreme example is murder.

One Augur market is titled: "Will Donald Trump (President of the USA) be killed at any point during 2018." Another is headed: "Will Donald Trump be assassinated or die in July 2018."

Of course, the Augur protocol was not designed with this purpose in mind—it is essentially a crypto-prediction tool—and experts told Newsweek the markets are likely the work of trolls.

Reached via Twitter, Augur provided a link to its FAQ. A brief statement read: "The Forecast Foundation does encourage users to follow their respective local jurisdictional laws, rules and regulations, even though it can't and doesn't control their use of the Augur protocol."

In response to a follow up question about moderation, it told Newsweek: "The only way to really moderate anything on the Augur protocol would be if ethereum miners censored transactions."

Several Augur markets are clearly tongue in cheek. Some include: "Will Kylie Jenner have a sex tape released/leaked before end of 2019?," "Does God Exist?," "Will Jon Snow ride Drogon in season 8 of Game of Thrones?," and "Will Stormy Daniels be arrested again this year?" Others appear to be more serious, discussing potential terror attacks and mass shootings in the U.S.

Matt Odell, a blockchain expert who was among the first to highlight the assassination markets, told Newsweek that Augur "doesn't have much liquidity or usage right now" but acknowledged its potential. He said that, ultimately, chatter about the death markets may benefit the platform.

Augur Screenshot
Augur is a prediction platform built on the ethereum blockchain that has caused some debate over the emergence of assassination markets. Augur/Screenshot/Newsweek

"In [one] way the trolls have done us all a service, these types of markets are inevitable, we should have this discourse now rather than later," he explained on Wednesday afternoon.

"If an Augur type system is successful, you'd be able to include real world events in smart contracts, without having to rely on a third party," he added. "Right now, there is no way to trustlessly connect a smart contract to real world events. For instance, let's say you wanted to set up an insurance smart contract that only pays out if a flood happens in your town. With Augur, the smart contract would be able to have cryptographically robust proof that a flood occurred."

The researcher admitted that the platform "can't be moderated traditionally" but noted: "That's the point. Anyone can create a market and there's no central authority that can close a market."

The internet has always had a dark side. Special anonymity software—again never designed for nefarious purposes—has led to the creation of marketplaces like the infamous Silk Road.

On this so-called dark web, websites flog everything from hacked credit card details to hitmen. In comparison, Augur is not trying to hide, and the ethical debate remains totally theoretical.

"None of the markets have ended yet so it is yet to be seen if [they will be resolved]," Odell told Newsweek. "Since ethereum can be tracked relatively easily if no precautions are taken then law enforcement can always go after the individual market creators if a market breaks the law.

"I think, if successful, a decentralized prediction market would be a benefit for society," he added. "Sure, there will be bad actors, but that's the case for most new tools or innovations."

Flag and Bullets
On Reddit, lengthy threads emerged about potential criminality and how the Augur platform could effectively police the issue. iStock