Let’s say you don’t want a fire, like it’s your data center. You’ll want to get paid if the fire does happen. So you bet on fire, like you’re buying insurance against it.
Two interesting differences from existing fire insurance.
If you’re not an asshole, then now you’re just getting insurance at a better rate because there’s more competing insurers.
If you are an asshole, then you’ll find yourself now paying the external cost of owning the data center, as higher insurance rates.
That’s the real point of this software. It would allow crowdfunded defense against people who are destroying the world and own the legal system. Most participants would just be minimizing costs or gambling, not ideologically motivated.
My point is that people would have an incentive to bet for the fire and then cause the fire, so once a bet is published chances are that the fire will happen.
There would need to be sufficient market depth to pay someone to act. So we couldn’t just publish $0.01 bets on everything and watch the town burn. “Coasian” solutions like this are limited by transaction costs.
In practice, the owner of the datacenter would need to either eliminate the externality or watch it burn. If the datacenter is worth more than its external cost, then they can reimburse their victims or pay for cleanup. If the revenue from the datacenter is less than its external costs, then it’s a net loss for society and ought to be shut down.
Let’s say you don’t want a fire, like it’s your data center. You’ll want to get paid if the fire does happen. So you bet on fire, like you’re buying insurance against it.
Two interesting differences from existing fire insurance.
That’s the real point of this software. It would allow crowdfunded defense against people who are destroying the world and own the legal system. Most participants would just be minimizing costs or gambling, not ideologically motivated.
My point is that people would have an incentive to bet for the fire and then cause the fire, so once a bet is published chances are that the fire will happen.
There would need to be sufficient market depth to pay someone to act. So we couldn’t just publish $0.01 bets on everything and watch the town burn. “Coasian” solutions like this are limited by transaction costs.
In practice, the owner of the datacenter would need to either eliminate the externality or watch it burn. If the datacenter is worth more than its external cost, then they can reimburse their victims or pay for cleanup. If the revenue from the datacenter is less than its external costs, then it’s a net loss for society and ought to be shut down.