Is Augur Really a Prediction Market?

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Summary

This article describes the differences between a true prediction market, Prediki, and a fake one, Augur, which is really a mere betting exchange.

{{/media/member/hubertushofkirchner_1/avatar_hubertushofkirchner_1_medium.jpg|Hubertus Hofkirchner}}

//by **[[https://www.prediki.com/members/Hubertus-Hofkirchner/|Hubertus Hofkirchner]]** -- Vienna, 19 Dec 2019 // \\ \\

//I have always puzzled why [[https://en.wikipedia.org/wiki/Augur_(software)|Augur Project]] called itself a "prediction market" instead of what it really is: a betting exchange. So what's the difference? //

{{https://www.prediki.com/media/displays/3806a9977e7c464c8adcd24d0b599670/wiki_medium.png}}

A **betting exchange** is a **zero-sum game** for distributing money between gamblers depending on a future outcome. Some win, the **others must lose**. In Augur's case it's built on the Ethereum blockchain, but that's about all the difference.

A **prediction market** proper (and [[http://www.prediki.com/|Prediki]] is the first of this new breed) is a **value-creating** virtual market mechanism which discovers information on future human action. Everybody profits: a prediction market client gets valuable, exclusive insights such as: a reality-check on [[https://www.prediki.com/meta/en/Future-Strategy-Prediki-vs-Delphi-Method/|business strategy]], trends predictions, [[https://www.prediki.com/meta/en/Corporate-Innovators-Risk-Reward-Dilemma/|chances of innovations]], technologies or new products, competitive threats, or simply performance forecasts. The client happily pays the prediction market for this [[https://www.prediki.com/meta/en/New-Qualitative-Tapping-Crowd-Intelligence-for-Advertising-Efficiency/|quantitative and qualitative]] information which in turn pays participants. **Everybody wins**, or better: nobody loses money.

In summary, a proper prediction market is an **economically and socially desirable** tool whereas a betting exchange, serves primarily for gambling which is a socially somewhat problematic activity.

More information: [[https://dappradar.com/app/673/augur|Augur users and transaction volume]] on DappRadar
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