Bit-thereum – The Potential of Bitcoin, Ethereum, and Orisi, Part Two

In part one of the analysis of Bitcoin, Ethereum, and the potential for a new “Bit-thereum” system, Orisi was only briefly touched on.  Orisi is the mediator that could create the bridge between Bitcoin and Ethereum that would be needed to create Bit-thereum.

Orisi White – Decentralized Arbitrators for Bitcoin, Ethereum, or Other Systems

A distributed contract sends a transaction without completing it until the stipulations outlined in the contract are  met. It exists within a network, such as Ethereum, with its own value and information. It then executes transactions according to the pre-installed information. No one has total ownership of a contract. In most instances a third party arbitrator is needed to verify that the conditions of the contract are met, known commonly as an Oracle.

This allows for several potential vulnerabilities: the Oracle could be hacked, the uncertainty of the Oracle’s output despite conditions being met, the Oracle could disappear before the transaction is completed, or the Oracle could be corrupt. Orisi sees the single server approach as incapable of providing adequate security. It proposes a set of distributed Oracles, run by several trustworthy parties, instead of one arbitrator. The majority of this group must agree on an outcome for the transaction to be finalized or nullified. This approach has a plethora of benefits, including; difficulty and expense of bribing more than half of a set of Oracles, a more opaque judgement process, difficulty of hacking due to a range of hosting providers, along with variation in computer hardware and software, and improving security of the software due to long-term community involvement.

BetMoose – Creating a More Decentralized Betting Platform

Ethereum allows for arbitrary contracts to be created with ease, allowing for multiple person ownership. Agreement as to the conditions of a contract by the contract holders would allow for the protection of funds, coupled with Orisi’s series of Oracles to arbitrate when contract owners cannot reach a resolution, and a decentralized democratic system that rewards people for fairness immediately develops. This funnels directly into the online gambling sphere.

BetMoose is run by co-founder and CEO Adam King. It is an online gambling platform that allows anyone to bet or host bets on any topic, be it sports, politics, celebrity gossip, stock prices, or oil prices. Each bet is displayed publicly and BetMoose has no affiliation with what is posted on the site despite removing inappropriate or illegal content. Private contracts are intended to be implemented soon, to allow person to person betting with a counter better, anonymously. BetMoose prides itself on true person to person connections. Traditional betting exchanges are either run with a ledger controlled by the exchange, that constrains the bets due to site rules or the amount allowed to bet, or private betting between a group of in person friends that is not heavily involved. User friendliness is also a large focus with BetMoose, and an ordinary calculator runs the mathematics behind all bets, which they believe will entice more people into betting due to higher transparency.

A host can also benefit off of betting by accepting a certain percentage from every payout, allowing for BetMoose to create a platform for anything from fantasy sports to stock options. A personal page can be shared to gather betters to one simple hub, or to assist in gathering users in case of conflict. If something is not resolved within a certain time frame, BetMoose might intervene and resolve such issues, however moderators have no control over undisputed bets. Bets that have no easy solution can be cancelled, sending all funds back to the original owners. Also, BetMoose only charges fees on those who come out of a bet with a positive amount.  Late betters are refunded their funds, and they pay miners fees.

Some have speculated that instead of having BetMoose arbitrate disputed bets, a system similar to Orisi’s multiple Oracles could substitute instead. This would include a series of arbitrators who decide whether or not a bet should go through in light of a dispute. If those in conflict could not settle it, then a group of their peers would be gathered, whether through BetMoose, or through a universal arbitration system, and the contract would complete the bet through the majority vote. This universal arbitration system, based on individual user rankings of Oracles, along with the security of decentralization would decentralize the entire system of arbitration on the internet, allowing for a far more democratic, and fair, web.

Bitcoin’s Price Gives Legitimacy to Open Bazaar and Other Systems

Through creating an environment in which an individual does not feel in danger of having their money stripped from them unjustly by centralized organizations, Bitcoin provides an online market that is free of much of the risk that online marketplaces have had thus far. Coupled with utterly arbitrary rules that allow users to choose what limits they want to subscribe to, such as with Open Bazaar, we are beginning to see a new development in terms of international commerce.

A community based on being fair, due to personal benefit that immediate applies to financial conflicts, should emerge. This would encourage non-Oracles to become them, due to the justness and benefits, along with fostering a healthy marketplace. The nuance provided by multiple human Oracles is intense, opening the flood-gates for transactions to be conducted with varying rules, on varying platforms such as online gambling, stocks, or auction-houses, with a readily available group of individuals dedicated to understanding the situation if an issue arises. Investment in Bitcoin could become much more attractive to outsiders, as it would prove previous misconceptions about it being an insecure platform as blatantly incorrect.

Instead of being turned away from online commerce, as many were when they encountered unfavorable rulings, the growth of the internet would lead such individuals to look for alternatives. These alternatives could be found in Bitcoin based markets with Bit-thereum style contract systems, and Oracle style arbitration. Such an idealistic model would thereby raise Bitcoin price exponentially, by fueling many new markets with a hoard of desiring consumers looking for an alternative to a clumsy online marketplace.