Exploring Crypto in Simple Terms (Augur)

Over the next few weeks, I hope to use this platform to engage with you in a meaningful discussion about the strengths/weaknesses of some popular Crypto currencies.

I do not claim to be an expert in this space, and I am certain that there are many commentators out there, including on Steem, that can share a more technical opinion. Nevertheless, I think that some readers might appreciate a less techy view and stand to benefit from this discussion so here it is:

The first coin I'll direct your attention to is Augur. If you are unfamiliar with the business purpose behind this crypto coin continue reading and perhaps by the time you upvote this story you will have already decided that it is a coin well worth adding into your growing crypto portfolio.

I'll explain the technology by way of an analogy.

While I was in university, some of my professors found that they can get a better participation from the students if the lecture was more interactive. As such, all students were required to bring a clicker to every class. Theoughout the lecture the professor would post a slide on the projector with one question and four multiple choice answers. All students had about 20 seconds to click in the answer that they thought was correct.

Here's what's really interesting. After all of the students in the classroom clicked in their answers, the professor would then display the statistics showing how many clicks each answer received. Invariably, what we all witnessed was that the correct answer got the highest number of clicks.

So you might be asking by now, how this all applies to Augur? What I described above is better known as Wisdom of the Crowd. Aristotle is credited with being the first to write about this idea, and Augur is the coin to take this idea to a decentralized, blockchain driven market. Using this concept, Augur built a platform that will be used by the community for forecasting events that have not yet taken place.

So how will it work?

Assume for a moment that we are in early 2016. If you are like the rest of us you're unhappy with your choices but you're burning to find out who might become the next commander and chief. You take your curiosity to Augur and create a market aimed at predicting just that. It's Hillary vs Donald and 70% of the Augur network, that chose to participate in your market, are putting their coins behind Hillary. Your close friend Josh is not very convinced, and he's one of those rare people that believes that Donald stands a really good chance at the race, so with your recommendation he goes and throws his Augur token behind Trump. Because the odds are stacked 70 to 30 in Hilary's favor, Josh will cast a $30c vote. The elections happen and Josh finds out that Donald took the podium. He further finds out that for every $30c he put into your prediction market he now receives $1 in return. This reward is for correctly predicting the outcome of an unlikely event.

If on the other hand Hillary won the election, Josh would lose his 30c to a Hillary voter who invested 70c and received a dollar for being right.

Thinking it over, it was only the polls who got it so wrong. If Augur was used as the forecasting tool for the elections, perhaps the crowd wisdom would point its finger at Donald or would accurately reflect the fact that the outcome is likely to be very close. Using the Augur tool, Josh would likely receive a reward of 49c for every 51c invested in this market because remember, the crowd's wisdom is a lot more accurate than any individual or corporation that can potentially manipulate or skew the results.

The power of Augur is that it acts as a decenteralized tool used to predict any type of event with precise accuracy. It literally has the potential to become the most powerful forecasting tool that this world has ever seen.

If you found this article interesting or informative please reSteem it. Follow my page for my next crypto simplification.