Date: Tue, 18 May 2021 12:15:58 +0000
To: Prayank <prayank@tutanota.de>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Prediction Markets and Bitcoin
Precedence: list

Good morning Prayank,

>
> >=C2=A0Of course the people ultimately funding the development must impos=
e what direction that development goes to, after all, it is their money tha=
t is being modified. Thus development must follow the market.
>
> Disagree.=C2=A0
>
> 1.A position in a futures market about possible outcomes of an event is n=
ot equivalent to funding Bitcoin development.
>
> 2.People or organizations funding Bitcoin developers or projects can alwa=
ys have some opinion, influence and disagreements. They can never impose or=
 force something at least in Bitcoin protocol.

Sorry for the late reply.

I expect that many Bitcoin developers have a nontrivial amount of their lif=
e savings in Bitcoin.

Any change in Bitcoin price represents a significant change in the value of=
 these life savings.

A position in a futures market represents a prediction by the one taking th=
e position that they expect the price of Bitcoin to change in a particular =
direction, possibly based on some condition, including the direction where =
development goes.

This signal then represents an implicit threat ("if Bitcoin goes against th=
is position, I will liquidate my Bitcoin and drop the Bitcoin price") which=
 can be sufficient to "fund" or "de-fund" developers who have a significant=
 stake in Bitcoin.


> I don't think futures market in this case will be able to aggregate and r=
eflect all available information so everything mentioned above has its own =
importance which should be considered. Maybe I missed few things.

*Some* information > *No* information

>
> 3.Incorrect usage of futures markets in Bitcoin and other issues:

Well, yes, this is the hard part, sigh.


Regards,
ZmnSCPxj