The chilling 2014 film Nightcrawler charts the rise of Jake Gyllenhaal’s Lou Bloom, a mildly psychotic, Travis Bickle-like character who goes from being made unemployed, having been caught stealing on the job, to becoming a successful ‘stringer’ – a freelance photojournalist who sells footage of serious and often bloody crimes to local news stations.
Without giving too much away, we observe throughout the film how Bloom becomes more ‘effective’ at his new job, specifically by tampering with crime scenes and engaging in increasingly unethical behaviour as a way to extract the most shocking footage possible. And by doing so, he is able to command higher fees from news stations that are only too keen to buy and air his footage.
On July 10th, Augur went live. The decentralized oracle and peer to peer protocol for prediction markets built on the Ethereum blockchain gave out its software for people to run on its mainnet. This allows anyone to create a prediction market on the blockchain and stake Ether on the outcome of future events such as sports games, asset prices, and election results.
Three weeks after launching, the first “assassination markets” emerged on the platform. Of course, these prediction contracts are not explicitly betting on assassinations. Instead, they are questioning whether ‘person x will die’ before a certain time period has elapsed. The likes of Warren Buffett, Jeff Bezos, the actress Betty White, US Senator John McCain, and perhaps not surprisingly various members of the Trump family, are the unfortunate subjects of such markets thus far.
Such markets are referred to as assassination markets because, hypothetically speaking, a market participant could take matters into their own hands and instigate the death of one such public figure. The mechanism works by presenting odds of a person not dying within a certain timeframe. A potential assassin could then be incentivized to bet a large pile of cryptos against the scenario at sufficiently long odds, carry out the deed within said timeframe, and win handsomely.
When assassination markets first caught my attention, the character of Lou Bloom immediately sprang to mind. Although not a killer himself, Bloom manages to profit by engineering specific events in his favour, without even the slightest regard for the profound ethical implications of his actions.
Indeed, what makes Bloom’s character so memorable is the very fact that it’s not out of the question for someone possessing such cold and amoral attributes to exist in real life. And although perpetrating a prediction-inspired assassination is beyond the capability of most, it’s not beyond everyone.
And now with assassination markets, a person with similarly sociopathic tendencies could arrange a ‘hit’ on a public figure should he or she consider the rewards to be sufficiently worth the risk of execution. That risk would include complete anonymity being required when placing and cashing the bet, and neither being caught nor convicted for the assassination.
The assassination market itself is by no means a new concept. In fact, Augur’s version is not even the first to emerge within the cryptocurrency ecosystem. Back in 2013, reports emerged that a creation by the mysterious pseudonym Kuwabatake Sanjuro was allowing people to contribute bitcoins towards bounties being placed on the heads of government officials such as the Federal Reserve’s then-chief Ben Bernanke and Barack Obama. Anyone who could prove he or she was responsible carrying out the assassination then won the aggregated funds.
But while Sanjuro’s markets resided on the ‘dark net’ and therefore wasn’t easy to find (and thankfully didn’t result in any actual assassinations being carried out), Augur’s version can be reached by anyone. And with accessibility to a much wider user base, therefore, the likelihood of harm ultimately being done goes up.
So, should Augur bear responsibility if an assassination occurs? The project’s underlying non-profit Forecast Foundation thinks not, making clear that it holds “no power to censor, restrict, or curate markets, orders, trades, positions or resolutions on the Augur protocol contracts,” and that it has “no more control over the Augur protocol than anyone else using Ethereum.” In other words, Augur is laying the responsibility for what appears on the prediction markets at the feet of its users.
The possibility, then, of fatal outcomes resulting from the decisions of a decentralized network raises serious questions over how to ensure that moral and ethical standards are maintained on the blockchain. And the fact that Augur also decided to do away with its kill-switch – a mechanism to allow developers to fix unanticipated problems – only amplifies the issue.
Happy two weeks! 🎉 Ownership of the escape hatch has been transferred to the 0x000..0001 address.
While kill-switches have generally come under criticism for enabling centralized control over the network for developers, could such a control mechanism, perhaps in the hands of a delegated third-party, ensure that prediction markets don’t delve into such dark realms? And could they more widely be justified to ensure that blockchain use cases are aligned with positive outcomes?
In the case of Augur, the answers to such questions largely depend on the likelihood that the creation of an assassination market will ever lead to a heinous act actually taking place. After all, there are many different tech creations that could be used for nefarious purposes, but none materialize for a myriad of restrictive reasons. In defending his own creation, Augur’s co-founder Joey Krug recently observed, “it’s a bit like asking the creators of SMTP if they’re ok with email being used for ransom notes. Obviously, I would prefer people not use the tool for such things.”
Ultimately, many of the proponents of blockchain advocate for the technology in the hope of achieving a better world. One that is more inclusive, more just and more moral. The same is true for Augur – among its main goals is to help us make better predictions about the future. By backing up our bets with money, we can hopefully become more accurate in our forecasts. Indeed, Vitalik Buterin even once called the project “Uber for knowledge”.
But it appears that deeply undesirable outcomes could emerge as a bi-product. Should we care? Absolutely. Prediction markets that generate non-zero probabilities of serious harm occurring in the real world is no small thing, especially with the Lou Blooms of this world being capable of effecting such harm for profit. With that in mind, moral responsibility on decentralized networks, and in particular, how that responsibility is effectively implemented, are undoubtedly issues that demand more attention.
In this brave new blockchain world, one that places utmost importance on the role of incentives, it would seem that in some instances, establishment of necessary disincentives can be just as important.