> I sat through some early presentations of Augur at the big monthly Bitcoin meeting that's been running for years in Amsterdam, and my first thought upon seeing it was, "who says what the factual outcome is?".
Is that a genuine question, or are you confused about the consensus mechanism? The answer to 'who says' is the core of what Augur is: people vote on what the outcome was, in a way that incentivizes them to vote for the answer they believe to be correct.
> So it's back to the original problem with smart contracts - you still have to trust an oracle, and I would bet ;) that if the stakes are high enough, an oracle will be manipulated in some way.
No, you do not have to trust an oracle. The whole mechanism is actually quite cool, you should check it out:
https://www.augur.net/whitepaper.pdf
> Let's take an election for example. We've had enough madness just in the US in the last 20 years to be skeptical of initially reported outcomes. In fact, some elections get reversed after study and investigation. Augur isn't going to reverse a funds exchange. And if someone has enough riding on an outcome, they may find it worth spending extra money to at least temporarily cause the outcome to match their bet. They just need to win briefly, even if the results get overturned later.
That's easy to solve. You simply define the question in a way that obviates those kinds of issues. In Augur, people vote on the outcome they believe is correct. The outcome of this process is defined as the truth, within the system. Since this is transparent, you place your bets with this in mind. You aren't betting on who will win the 2020 election, you're betting on which answer people will converge on for the winner of the 2020 election. A subtle, but important difference.