How Does Bitcoin Hivemind Work? – LIFESTYLE BY PS icon

How Does Bitcoin Hivemind Work?

Bitcoin Hivemind (originally known as Truthcoin) is an open-source, peer-to-peer Oracle protocol and conditional prediction market. The protocol was proposed by Paul Sztorc and is designed to function as a sidechain on the bitcoin exchange. Hivemind specifically focuses on governance issues such as multi-factor decision-making through its use of a conditional prediction market structure.

This protocol is specifically designed to help groups of people reach a consensus when making multi-factor decisions, such as those related to voting systems. It's an ambitious concept that offers valuable insight into governance and what project managers are capable of accomplishing.

Information, Governance and Prediction Markets

Sztorc has pointed out that a lot of blockchain applications are not dealing with real-world issues, which can lead to their failure in terms of staying practical and relevant. Hivemind is a Bitcoin sidechain that solves the problem of information aggregation. By building on current existing market protocols, such as InTrade, Hivemind provides access to an immutable repository of knowledge with censorship-resistant and transparent properties.

No other means currently offers the same level of efficiency in gathering data while leveraging aspects from already established monetary network effects found within legacy cryptocurrencies. Using a phenomenon known as the "Wisdom of the Crowd," Bitcoin Hivemind is an effective tool for achieving market-driven decisions while reducing noise and vagueness. Similar to Augur and Gnosis, Bitcoin Hivemind crowdsources probabilities regarding events, gaining several advantages like those seen in Bitcoin: transparency, fortitude, censorship avoidance, and financial influence.

Predictive markets (PMs) have a range of applications, including sports gambling and governance decisions. While PMs are not perfect, they provide superior insights than other data sources because they draw information from numerous experts along with financially motivated market players to generate more comprehensive results.

With market-driven PMs, if you don't agree with the conclusions that come from the data in the blockchain, it's within your rights to take advantage of those discrepancies and go against them. Furthermore, due to this data being monetarily backed by sources vested in providing accurate information and facts free of bias, it ensures reliable results each time.

How does Bitcoin Hivemind work?

Hivemind is an incredibly complex and intricate protocol, with a corresponding whitepaper that spans 81 pages. To ensure its efficacy, well-known experts Andrew Poelstra and Gregory Maxwell were independently commissioned to review the system.

Paul Sztorc envisions that Hivemind could eventually be the go-to system for decision-making related to politics and governance. However, this process will take time as users want assurance in terms of the accuracy and reliability of prediction markets (PM). Nonetheless, Paul has identified three primary properties required to bring about a successful solution when it comes to issues regarding governance:

  • By leveraging the multi-dimensional properties of project management, decision-making can become less complicated and take fewer factors into account. This is due to increased relationships and forecasts between probability events which help measure their impact on each other.
  • The Bitcoin sidechain Hivemind is censorship-resistant and merge-mined with the platform, making it immutable. This provides a unique medium outside of the traditional financial system to facilitate peer-to-peer markets through a borderless currency. The immutability and cryptographic security of Bitcoin make it an ideal cryptocurrency for this purpose.
  • Prediction markets have become a reliable and inexpensive source of information, helping to draw clear definitions for topics such as climate change by converging on probabilities that are indicated in the market pricing. These markets not only aggregate and curate data but also make it readily accessible to anyone online at no cost.

Hivemind is a Bitcoin sidechain that combines the utility of two kinds of tokens—Bitcoin to store value and VoteCoins to denote user reputation.