Vitalik’s Research and Ecosystem Update — Vitalik Buterin, blog.ethereum.org

A report from a trip to China.

At the Hong Kong event, on the first day we participated in semi-closed sessions on issues such as decentralized governance, identity and reputation and regulatory compliance. Robin Hanson brought up the topic of prediction markets as a form of “low-cost micro-governance”: if there are situations where a legal or arbitration process is required in order to ultimately resolve disputes, use a prediction market to provide the result instead, only occasionally escalating to the underlying arbitration mechanism. Anyone with private information has the incentive to participate in the prediction market: the parties to the dispute themselves, any third parties involved, and even firms like Google applying top-of-the-line machine learning algorithms; in most cases, a result that accurately predicts the result that would be obtained by the underlying court or arbitration system should be attainable very cheaply.