The Blockchain’s Dark Side

Malachy Caldwell
Dec 26, 2019 · 4 min read

In July of 2018, a revolutionary new blockchain-based gambling technology was sent live. Three years in the making, Augur is the world’s first so-called decentralised betting platform.

The implications of this technology are profound and extend far beyond gambling itself. Before we go into that, it may be worth, at this stage, just positing a quick reminder of what we mean exactly when we say it is a “decentralised” technology.

Simply put, with Augur — just as with any other public blockchain of which Bitcoin is the most famous example — no-one is in control and no-one is in a position to take it down. And like Bitcoin, Augur offers its users complete anonymity through a technology which defies all legal and regulatory constraints.

Implications

Whether we like it or not, anyone anywhere with an internet connection can now bet, and do so anonymously. And these same users can also create their own betting markets, becoming de-facto bookmakers in defiance of all existing regulatory frameworks and industry oversight.

But whilst that is considered a nice feature by some (generally those of a strong libertarian bent) it should also be noted that markets created on Augur are not curated. There is no gate-keeper — this is blockchain technology after all — to filter out markets that could potentially incentivise harmful behaviour.

And as it now turns out, some of those markets which have emerged since Augur’s release have been attracting attention for all the wrong reasons.

Day of the Jackal

Whilst the story told by the book was itself fictional, it was inspired by a real-life, failed attempt on de Gaulle’s life. In the book, we get a sense of how these mysterious actors had to spend some considerable time and energy seeking out an assassin-for-hire and then laundering the necessary funds before finally making arrangements for the payment itself.

In other words, killing de Gaulle was going to be the easy part — finding someone to do it and setting up a means of payment which engaged the confidence of both the assassin and his paymasters was where the organisational complexity came in.

Today, however, these same tasks could be achieved trivially by the submission of an anonymous cryptocurrency down-payment to the Augur platform as liquidity for an assassination market. Upon successful execution of the act, the payment would then simply be released as winnings to the assassin who has nothing more to do than to sign up as the market’s counter-party to collect his fee.

Life Imitates Art

Nonetheless, the fact that this technology now exists does raise some chilling questions about the darker possibilities that have been unleashed by blockchain technology, particularly its resistance to backing out unintended idiosyncratic outcomes that its code gives rise to.

We are, however, still very much at right at the beginning of the so-called blockchain revolution, and we are as yet in no position to determine whether its longer term implications will be positive or negative on balance. Observing Augur and the use cases it gives rise to over the coming months and years could just give us an idea of where blockchain technology as a whole is taking us.

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Malachy Caldwell

Written by

Politics, Things Blockchain, Irish Stuff, Writing

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +792K followers.

Malachy Caldwell

Written by

Politics, Things Blockchain, Irish Stuff, Writing

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +792K followers.

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