Blocksize Prediction Market

	B	C	D	E	F	G	H	I	J	K	L	M	O	P	Q	R	S
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3	A light web version of the Excel spreadsheet at: http://www.truthcoin.info/papers/LogMSR_Demo.xlsx
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5	Total Capital Supplied (BTC)	20
6	Liquidity Parameter	14.42695041
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8	States	Goal Metric (USD/BTC)
9		Min (0$)	Max ($50,000)
10	Blocksize 1 MB	#1	#3
11	Blocksize >1 MB	#2	#4					Red: higher blocksize, Blue: 1 MB blocksize, (Orange: today's expected future value)
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13			EDITABLE (Numbers only, please)														exp_sum
14			Shares				Share Prices				LMSR (Market Account)	Update Cost (User Pays)	Exchange Rate		P(Increase)
15		Time	#1	#2	#3	#4	#1	#2	#3	#4	0	--	1 MB	>1 MB		expected
16		1	7.0	4.0	7.0	4.0	27.59%	22.41%	27.59%	22.41%	25.57783897	25.57783897	$25,000	$25,000	44.82%	$25,000	5.89
17		2	13.0	8.0	13.0	11.0	27.95%	19.76%	27.95%	24.33%	31.39015218	5.81231321	$25,000	$27,590	44.10%	$26,142	8.81
18		3	21.0	16.0	18.0	15.0	31.46%	22.24%	25.55%	20.75%	37.68624358	6.296091399	$22,410	$24,134	43.00%	$23,151	13.63
19		4	28.0	21.0	22.0	22.0	34.07%	20.97%	22.48%	22.48%	43.53399884	5.847755268	$19,875	$25,866	43.45%	$22,478	20.44
20		5	33.0	29.0	29.0	27.0	31.49%	23.87%	23.87%	20.78%	49.66970377	6.135704931	$21,556	$23,270	44.64%	$22,321	31.28
21		6	41.0	37.0	34.0	32.0	34.37%	26.05%	21.16%	18.42%	56.40680611	6.737102337	$19,051	$20,711	44.47%	$19,789	49.89
22		7	46.0	44.0	39.0	36.0	33.49%	29.15%	20.61%	16.74%	61.78273481	5.375928698	$19,051	$18,241	45.90%	$18,679	72.42
23		8	52.0	50.0	45.0	42.0	33.49%	29.15%	20.61%	16.74%	67.78273481	6	$19,051	$18,241	45.90%	$18,679	109.76
24		9	58.0	58.0	52.0	46.0	32.31%	32.31%	21.32%	14.06%	74.29953038	6.516795569	$19,875	$15,163	46.37%	$17,690	172.44
25		10	64.0	63.0	57.0	54.0	32.80%	30.61%	20.19%	16.40%	80.0814933	5.781962921	$19,051	$17,446	47.01%	$18,296	257.45
26		11	71.0	67.0	65.0	59.0	35.05%	26.56%	23.13%	15.26%	86.12422867	6.042735375	$19,875	$18,241	41.82%	$19,192	391.38
27		12	72.0	67.0	66.0	61.5	35.08%	24.81%	23.15%	16.96%	87.11141778	0.9871891083	$19,875	$20,305	41.77%	$20,054	419.10
28		13	79.2	73.7	72.6	67.7	36.16%	24.70%	22.88%	16.26%	93.8754194	6.764001617	$19,379	$19,848	40.96%	$19,571	669.78
29		14	82.2	76.7	75.6	70.7	36.16%	24.70%	22.88%	16.26%	96.8754194	3	$19,379	$19,848	40.96%	$19,571	824.60
30		15	85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	-0.6448734707	$19,379	$43,633	23.98%	$25,196	788.55
31		16	85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	0	$19,379	$43,633	23.98%	$25,196	788.55
32		17	85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	0	$19,379	$43,633	23.98%	$25,196	788.55
33		18	85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	0	$19,379	$43,633	23.98%	$25,196	788.55
34		19	85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	0	$19,379	$43,633	23.98%	$25,196	788.55
35			85.2	45.9	78.6	73.7	46.55%	3.05%	29.46%	20.93%	96.23054593	0	$19,379	$43,633	23.98%	$25,196	788.55
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39
40	At t = 12 someone purchases the "pro-increase portfolio".							("pro-increase portfolio" shares in box form)
41	At the given level of Initial Capital Supplied (cell C5)...							1.00	1.00
42	...it consisted of these shares...		1.00	0.00	1.00	2.52	<-->	0.00	2.52
43	...and it cost...			0.9872
44	...but if we had infinitely liquid markets it would have cost 1 (try increasing "total capital supplied" at the top).
45	...the b-independent price, by naive multiplication...			0.9656	..(while currently ~8% overexpensive, this is sometimes underexpensive, depends on price-distribution).
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47	Now, assume that the future Bitcoin price is...			$4,800	...or...	9.60%	...of the way between 0 and 50,000
48	...and recall that it was...			$19,192	...when the "pro-increase portfolio" was purchased (t=11)...
49	...implying a Bitcoin Return of...			-74.989%	.
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51			States	Goal Metric (USD/BTC)
52				Min (0$)	Max ($50,000)
53			Blocksize 1 MB	?	?	?
54			Blocksize >1 MB	?	?	?
55	So, we can fill in this half ---------------------------------->			90.40%	9.60%
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57
58	If the blocksize does increase...
59			States	Goal Metric (USD/BTC)
60				Min (0$)	Max ($50,000)
61			Blocksize 1 MB	0%	0%	0.00%	<----------- Now, this half.
62			Blocksize >1 MB	90%	10%	100.00%
63				90.40%	9.60%
64	Revenue	0.2415
65	b-indep Cost	0.9656	(if bought at avaliable prices)
66	Infinite Liquidity Cost	1.0000	(if bought at avaliable prices under infinite liquidity)
67	b-indep Return	-74.989%	(equal to E49...fully replicated)
68	IL Return	-75.849%	(approaches E49 as liquidity increases or ERs equalize)
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70	If the blocksize does not increase...
71			States	Goal Metric (USD/BTC)
72				Min (0$)	Max ($50,000)
73			Blocksize 1 MB	90%	10%	100.00%	<----------- Reversed.
74			Blocksize >1 MB	0%	0%	0.00%
75				90.40%	9.60%
76	Revenue	1.0000
77	b-indep Cost	0.9656	(if bought at avaliable prices)
78	Infinite Liquidity Cost	1.0000	(if bought at avaliable prices under infinite liquidity)
79	b-indep Return	3.561%	(approaches zero as liquidity increases or ERs equalize)
80	IL Return	0.000%	(equal to zero, full refund)
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84	It is best to have the b-indep and IL returns equal each other...
85	...this happens when b is high (ie large "Total Capital Supplied")....
86	...which costs money, so take out your wallets, please!
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93	Changing the Units from BTC to USD
94
95	Setup
96		Sum	#1	#2	#3	#4	#5	#6	#7	#8
97	Random Numbers	4.865	0.924	0.697	0.957	0.121	0.050	0.605	0.817	0.695
98	Initial Prices		18.98%	14.33%	19.66%	2.48%	1.03%	12.44%	16.78%	14.29%
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100	Random Numbers	2.535		0.749		0.550		0.709		0.527