A cryptocurrency is a form of virtual currency that uses cryptography for security, unlike the traditional centralized government finance system. Cryptocurrencies have created a buzz and gained wide acceptance in most economies with increased transactions being undertaken using the virtual currency.Enthusiasts believe it is the future of money while skeptics are convinced it is just a bubble.
What then is Augur?
Augur is a trading platform that combines prediction market with the power of “Wisdom of the Crowd” to create an amazingly accurate forecasting tool providing the opportunity to make trading profits. Spot-on predictions are rewarded and off-the-mark predictions are penalized.
In a prediction market, future end results of events are postulated upon and the less likely the matter occurs, the better the reward you earn in predicting its success. The peer-to-peer principle is premised on assembling views from predictors and using the information gatheredto form real-time prediction data that is more accurate than any other platform by professional experts.
In summary, Augur is an open source ledger system that predicts prices of digital currencies. The platform was built on Ethereum’sblockchain.
The Lead Software Developers for Augur are Jack Peterson and Joey Krug in the year 2014. The Augur alpha version was released on 16thJune2015 on the Ethereumtestnet. The first beta version was released in March 2016 and the main official trading network release is set for March 2018.
- · Because of its decentralized nature, Augur has proven to provide better future predictions.
- · It allows people to use its platform to create a democracy where what is held as truth is not the precinct of one body or person. Anyone, anywhere, anytime can be a participant in the outcome.
- · Market cost is cut down to the economic minimum due to the elimination of middlemen.
- · In effect, counterparty risks are also eliminated as trade is run on the Ethereumblockchain.
- · It cannot be censored by any government as it is a decentralized platform.
How Augur works
There are two ways to look at it:
- As a market creator
- Trading shares from predictions
This is started by initially putting in capital to buy Ethereumor Bitcoin to create a market. The market in this context could be anything ranging from any number of issues. This would consequently set the wheel in motion as predictors get busy giving their weighed views.
Once the market has been created, the cost to buy and sell shares needs to be ascertained. This is commonly referred to as the taker fees and maker fees respectively.
The taker fees cannot go below 1.0% and cannot exceed 12.5%. On the other hand, the maker fees can be anything but not more than 50% of the taker fees.
Augur’s algorithm will roll out to work with the gathered information and provide the top predictions for that event. The proceeds gathered would be shared among the correct predictors.
The prudent thing to do to make your market attractive is to set your fees low enough to accommodate huge numbers yet not too low as not to cover your investment cost.
Trading shares from predictions
In this case, you do not need to do the actual betting. You instead buy or sell shares based on the outcome. The process is to create an order which has the following components:
- Order placement
- Price of the order
- Amount of shares or Ethereum escrowed
- The outcome being traded.
Reputable tokens (REP)
The REPs are what powers the Augur Decentralized Oracle System. When the event is over and the market closes, the outcome of the event is reported at a fee. If your outcome is similar to most outcomes from other reporters in your market, you receive your REP back and also a portion of the reporting fee. The more REPs you stake when submitting a report, the more earnings from the reporting fees.
What is Bitcoin
Bitcoin is both a cryptocurrency coin and a distributed network that maintains ledger balances of Bitcoin, the coin. Bitcoins are not minted or printed like the known hard currencies but generated by computers through a process referred to as a mining. They are the most popular in the digital currency platform.
The Bitcoin system was proposed by one Satoshi Nakamoto in 2008 with the idea of generating an electronic payment system based on mathematical proof with maximum verifiable and immutable security.
How does Augur differ from Bitcoin?
- · For one, they are totally different cryptos. Whereas Augur is more of a token asset built over the Ethereumblockchain, Bitcoin is built on its own blockchain and is used widely in several sectors of the economy.
- · The process of acquisition of Augur coin is through predictions whereas from mining bitcoin is an elaborate process.
- · Augur coins rely on its users to determine the outcome through crowd-sourced opinions whereas Bitcoin is dependent on a few users who undertake the mathematical solving process using supercomputers.
- · Miners are awarded Augur coins based on the amount put into a particular event and therefore, the bigger the amount put out for the bet, the higher the reward to be won by those who predicted correctly.
- · With the Augur coin, fees are set by the users whereas Bitcoins are determined by mathematical proofs.
- · With augur, you gamble on the value of your money with your money. Bitcoin engages a different platform with strong independent market presence.
- · Downloading and installing the augur platform is completely free with no transaction fees required. With bitcoins, each transaction attracts a fee though minimal.
- · Currently, Bitcoin is abetter investment than augur though augur is steadily gaining ground.
Augur coins can be stored in wallets that support ether for protection of the earnings made. Augur’s market cap jumped from $43 million in January 2017 to over $1.1 billion on 13 January 2018. Its price also rose by almost 2000% to hit an all-time high of $107 on Jan 13, 2018. However, the cryptocurrency plunged earlier in the year, making Augur currently trade at $47.24 with a market cap of $ 519 million. Augur (REP) is ranked 41st amongst listed cryptocurrenciesaccording to stats on the reputable CoinMarketCap. With such a record with only two years in operation, it is doubtless a force to reckon with in the prediction industry.