“What is truth?”
It is a profound question which philosophers have been tackling for millennia. And whilst there is no definitive answer to the question, there is nonetheless a reasonable substitute – consensus.
And it is consensus which the blockchain does best. And as such, it now offers up a real solution to business models which depend on nothing more than the truth.
One example of such a business model is blockchain start-up meVu that is setting out to create the world’s first mass adoption decentralised betting network. The project’s technical lead, Tim McCulloch, CTO of meVU, wants to build a platform where no-one is in charge. Instead, he wants the platform to be entirely automated by smart contracts which gather in the wagers and redistribute the winnings according to the outcomes that have been declared.
Ask the Oracle
But this raises the question – if no-one is in charge, who then decides what the result of a bet is. In other words, how does a decentralised, automated network come to a decision about what the “truth” of an outcome is?
“To build our decentralised source of truth, we use Oracles,” McCulloch states. “Oracles,” he explains in one of the project’s promotional videos, “are users of our platform who hold MVU token and who stake some of those tokens to determine who actually won an event.”
As Oracles stake their tokens, they will subsequently receive a share in the losing bettor’s winnings – if and only if the outcome they have submitted (e.g. Manchester United WON their game today against Arsenal) falls in line with the majority of the outcomes reported by other Oracles – i.e. if they are part of the consensus.
Oracles also receive rewards in proportion to the size of their stake as it compares to the overall universe of Oracle stakes. And “truthful” Oracles receive money from those Oracles whose reporting on the outcome of an event does not fall in line with the consensus. And because this is all done anonymously, the theory goes that Oracles will be incapable of manipulating the consensus.
At the same time, any individual Oracle or group of organised Oracles who spam the network with incorrectly reported outcomes will only be able to do so at a cost to themselves. It may be, however, that “bad” Oracles do come to dominate a given market and thus manipulate the reporting of an outcome to their own advantage. For this scenario, however, McCulloch has built in a fall-back mechanism: reputation scores. When Oracles are seen to be reporting outcomes which plainly do not coincide with reality as perceived by the remaining universe of Oracles, they clock up a poor reputation score.
It is an example of how basic game theory underpinned by blockchain technology is now offering up the ability for platforms to safeguard the truth – or at least our shared perception of it. And its use cases extend well beyond betting – new blockchain-based media organisations are now emerging, for example, hoping to exploit exactly the same kind of gamification strategies employed by meVu to combat the phenomenon of “fake news”.
Oscar Wilde once stated that if you ” … give man a mask, he will tell you the truth.” The twenty-first century version of that mask is blockchain technology, and it is a mask which does more than simply cover the faces of individuals, it extends to entire fields of human activity.