Yes. It is an exchange that allows you to trade the likelihood of a specific event occurring. It can be used for entertainment, but its true value is unlocked as a predictive tool. Many studies have shown that the “wisdom of the crowd” is more accurate than any individual person’s opinion.
For example, in the US presidential race Hillary Clinton is trading at $0.90 and the rest of the field is at $0.10. This is the market saying that Hillary Clinton will likely win the Democratic Party nomination, and that she will easily win the general election in November 2016. Prediction market outcomes are usually priced as a portion of $1.00. Someone can “buy” Hillary Clinton winning for $0.90 to win $1.00, or “buy” the field for $0.10 to win $1.00. The field is more lucrative, but less likely to occur.
A website called ForceRank is pioneering a fantasy-style stock picking game that will produce quantitative data it can sell to hedge funds. I expect that regulatory bodies will eventually shut it down, because a similar manual style of game a few years ago produced incredible profits for the hedge fund that ran it. If Augur works as intended, it could quickly expand into a source of market knowledge that would impact financial exchanges across the globe.
