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	8.0	4.0	7.0	4.0	29.00%	21.97%	27.05%	21.97%	25.86073367	25.86073367	$24,134	$25,000	43.95%	$24,515	6.00
17		2	14.0	10.0	13.0	8.0	29.84%	22.62%	27.85%	19.69%	31.44438941	5.583655739	$24,134	$23,270	42.31%	$23,768	8.84
18		3	18.0	16.0	17.0	16.0	27.22%	23.69%	25.39%	23.69%	36.77404291	5.3296535	$24,134	$25,000	47.39%	$24,544	12.79
19		4	26.0	22.0	21.0	23.0	30.51%	23.13%	21.58%	24.78%	43.12471407	6.35067116	$20,711	$25,866	47.91%	$23,181	19.87
20		5	33.0	30.0	29.0	31.0	29.06%	23.61%	22.03%	25.30%	50.82685856	7.702144491	$21,556	$25,866	48.91%	$23,664	33.89
21		6	41.0	34.0	37.0	39.0	30.83%	18.98%	23.36%	26.84%	57.97765393	7.150795377	$21,556	$29,289	45.81%	$25,099	55.63
22		7	48.0	41.0	45.0	43.0	31.90%	19.64%	25.91%	22.56%	64.48433866	6.50668473	$22,410	$26,730	42.19%	$24,233	87.33
23		8	55.0	47.0	50.0	50.0	33.46%	19.22%	23.66%	23.66%	70.7945183	6.310179637	$20,711	$27,590	42.88%	$23,660	135.25
24		9	60.0	53.0	58.0	56.0	30.83%	18.98%	26.84%	23.36%	76.97765393	6.183135633	$23,270	$27,590	42.34%	$25,099	207.61
25		10	67.0	59.0	63.0	63.0	32.36%	18.59%	24.53%	24.53%	83.27637533	6.298721397	$21,556	$28,444	43.11%	$24,526	321.27
26		11	71.0	65.0	69.0	71.0	28.33%	18.69%	24.66%	28.33%	89.19792634	5.921551004	$23,270	$30,125	47.01%	$26,493	484.31
27		12	72.0	65.0	70.0	73.1	28.02%	17.25%	24.39%	30.34%	90.35519946	1.157273125	$23,270	$31,878	47.59%	$27,367	524.76
28		13	79.2	71.5	77.0	80.5	28.28%	16.58%	24.28%	30.86%	97.42329083	7.068091368	$23,098	$32,526	47.45%	$27,571	856.51
29		14	82.2	74.5	80.0	83.5	28.28%	16.58%	24.28%	30.86%	100.4232908	3	$23,098	$32,526	47.45%	$27,571	1054.49
30		15	85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0.7016696312	$23,098	$47,165	38.37%	$32,332	1107.04
31		16	85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0	$23,098	$47,165	38.37%	$32,332	1107.04
32		17	85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0	$23,098	$47,165	38.37%	$32,332	1107.04
33		18	85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0	$23,098	$47,165	38.37%	$32,332	1107.04
34		19	85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0	$23,098	$47,165	38.37%	$32,332	1107.04
35			85.2	45.9	83.0	86.5	33.16%	2.18%	28.47%	36.19%	101.1249605	0	$23,098	$47,165	38.37%	$32,332	1107.04
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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	2.15	<-->	0.00	2.15
43	...and it cost...			1.1573
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...			1.1385	..(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...			$26,493	...when the "pro-increase portfolio" was purchased (t=11)...
49	...implying a Bitcoin Return of...			-81.882%	.
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51			States	Goal Metric (USD/BTC)
52				Min (0$)	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 ($50,000)
61			Blocksize 1 MB	0%	0%	0.00%	<----------- Now, this half.
62			Blocksize >1 MB	90%	10%	100.00%
63				90.40%	9.60%
64	Revenue	0.2063
65	b-indep Cost	1.1385	(if bought at avaliable prices)
66	Infinite Liquidity Cost	1.0000	(if bought at avaliable prices under infinite liquidity)
67	b-indep Return	-81.882%	(equal to E49...fully replicated)
68	IL Return	-79.372%	(approaches E49 as liquidity increases or ERs equalize)
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70	If the blocksize does not increase...
71			States	Goal Metric (USD/BTC)
72				Min (0$)	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	1.1385	(if bought at avaliable prices)
78	Infinite Liquidity Cost	1.0000	(if bought at avaliable prices under infinite liquidity)
79	b-indep Return	-12.165%	(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	4.808	0.999	0.995	0.431	0.959	0.541	0.063	0.338	0.481
98	Initial Prices		20.78%	20.69%	8.96%	19.96%	11.25%	1.32%	7.03%	10.01%
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100	Random Numbers	0.884		0.332		0.103		0.054		0.395