BitBet Prediction Market Review
Bitcoin prediction market trailblazer bit bet is unfortunately no longer with us. Check out the alternative prediction markets.
Say hello to bitbet.us, the grandfather of the bitcoin prediction market, which opened up waaaaay back in 2012, when most of us still thought dollars were here to stay and SWIFT was a necessary evil. Bitbet has the largest number of resolved bets in the market, with a whopping 1174 settled and paid for a total of 23,818 bitcoin – and counting!
We enjoy the irreverent humor of the unknown (at least in the physical, non-internet handle manifestation of their actual bodies) ownership, who for some unknown reason have chosen the “got milk”? tagline to be the two word manifestation of their brand, and demonstrate their catchy wit on the frequently asked question section, usually a bastion of dry and boring tomes.
But how is the product? Read on, dear reader, and find out.
Opening an Account
To quote bitbet: “You do not need an account to use BitBet, sorry to disappoint”. Excellently succinct and and quite humorous. Indeed, the statement most likely fulfills the definition of a joke as defined by noted linguist Robert Hetzron: “A joke is a short humorous piece of oral literature in which the funniness culminates in the final sentence, called the punchline”. The punchline, according to the same wikipedia entry, makes aware to the audience a “conflicted meaning” and can be done using “…logical incompatibility”. In the above example, the “sorry to disappoint” would best be characterized as a logical incompatibility and so…a classic joke.
But we digress.
So bitbet is a truly anonymous prediction market, and users will be unable to register even if they are so inclined. Users don’t so much deposit as they place a bet on a particular prediction, which is done simply by clicking on the desired prediction, choosing “yes” or “no”, after which winnings will be sent back to the address from which the bet originated.
After the selection is made, a bitcoin address is displayed, and the btc sent will show in the “confirmed bets” list after the first confirmation.
Winning bets will be sent automatically to the user after the event has been settled.
A Bit about Betting
Each bet must be phrased as a yes/no question, unlike some of the other markets which allow multiple options per bet. This is somewhat limiting as one may no longer ask “who will win the democratic primary election” but must rather open multiple bets, one for each candidate (i.e. will Hillary Clinton win the democratic primary, etc). The style of bet is known as parimutuel, which means means that the bets are pooled, and the side that wins will split the pot of the side that loses.
The pot is split according to two factors – the amount each user has bet, and the proximity of the user’s bet to the actual event. The former factor is self-explanatory – if I bet 1 bitcoin and you bet 10, you would obviously be entitled to a larger percentage of the pot than I. In terms of bet proximity – consider the difference in betting that the bitcoin price will rise above $300 by the end of November 2015 when placed in March 2015 versus October 2015. The March 2015 bet is obviously much more speculative in nature, and thus deserves a greater portion of the pot in the event that the prediction is accurate.
In the above screenshot of the prediction “will the next US president be female”, we see that there is a current weight, which is a number between 100,000 and 1, as well as the weight between yes and no respondents. Supposing a user were to bet a bitcoin today, whilst the weight is at 99,900 that yes, the next president would be female, the winnings would be calculated like this:
First, one percent would be taken from the bet as a fee to bitbet, so the bet would be calculated at .99 btc. Next, the weight of the bet would be divided by the total amount of weight within the winning category, so that if a total of 1 million weight has accrued, our savvy punter would be entitled to 99,900/1,000,000 or approximately 1/10 of the total weight.
Let us further imagine that there was a total of 10 bitcoin was wagered on the false prediction that no, the next president would not be female. Our better would thus be entitled to the following percentage of the losing pot: The bet minus one percent multiplied by the losing side’s pot, multiplied by our betters weight divided by the overall weight of the winning side. Or:
.99*10*99,900/1,000,000 =.989 bitcoin. And of course, the initial bet would be returned as well.
Hosting a Bet
Users can also create their own bets through the “new bet” tab on the homepage. Each proposed bet is vetted by bitbet moderators who, at their own discretion, determine whether or not to accept and publish the bet. If a bet is published, bitbet will “fund” the bet, by splitting at least 0.1 btc across the yes and no sides. The user who suggested the bet will have his address associated with the smaller bet amount, which bitbet does to incentivize users to come up with engaging bets for the community.
Betting ceases 5 days prior to the specified end date of the bet. When a bet is closed, bitbet moderators are responsible for researching and displaying the resolution of the relevant event. The resolution is displayed for two days, during which time the results may be contested. After this period has closed with no contestations, the bets are paid out and no further contestations will be heard.
Bitbet’s design works splendidly on mobile devices, though the site is not responsively designed.
Bitbet can be reached via email at firstname.lastname@example.org and generally gets back to queries quickly.
Bitbet is a simple and relatively liquid bitcoin prediction market. The 1% fee is probably the lowest in the market, and placing a bet can be done easily and anonymously. Though perhaps not as beautiful as some of the other bitcoin betting exchanges, liquidity is the name of the game, and bitbet has…won the game. Give it a shot, it’s a really cool product.