With smart contracts and the blockchain, users bet on the death of celebrities.

The Augur Blockchain platform is making headlines: Some journalists already fear that the so-called prediction market could cause deaths, reports Technology Review in its online edition (“Gambling per Blockchain“). In the decentralized prediction marketplace, users can bet on anything they want – including the death of celebrities.

Meanwhile, there are markets on the Ethereum-based platform where bets are placed on the end of US President Donald Trump, investor Warren Buffett, Amazon boss Jeff Bezos or actress Betty White. However, there are not many transactions here yet and the sums involved are small. It is rather unlikely that this could lead to criminal acts – that is, people wanting to speed up the death of the “death pool” candidates.

Bridge between blockchains

Illegal activities are nevertheless possible through Augur – and they could prove difficult to trace. Prediction markets are generally not permitted in the USA. Federal and state laws prohibit online games and “it is unclear in many ways how much prediction markets differ from gambling,” explains Aaron Wright, professor at the Cardozo School of Law in New York. In addition, some Augur contracts allow users to bet on the later value of things, such as the coming value of the crypto currency ether. These binary options actually require the approval of the Securities and Exchange Commission.

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When Napster, Limewire and other peer-to-peer file-sharing networks began freely distributing music, films and other files on the Internet two decades ago, similar problems arose for law enforcement agencies. But in each of these cases there was one entity that was sued for copyright infringement. Software like Augur, which is open source, downloadable for free and runs on a blockchain, creates completely new challenges.