Even if they actually did work as well as the author wants to believe they could, there's still the matter of utility. Efficient pricing of real assets actually injects something, greases the gears of the market.
What is the utility of knowing the odds of something? Well that depends entirely on the something - it needs to be actionable, affect something that is not merely itself, whereby it can lessen friction. But this "actually valuable?" function is entirely decoupled from the prediction market trade volume and odds! You can make bank contributing to entirely useless odds, and equally make little on something where a clear prediction actually solves problems.
Those who stand to benefit from the output information (if ignoring insider bullshit) don't have to play. Hell if it's something important enough and they really have an edge, why would they play at all, if the information or prediction truly is valuable?
VCs don't exactly make plays on merely doubling their investment, right? Plus who's to say those sitting on valuable modeling powers actually have the capital to meaningfully participate? Even literally knowing the future wouldn't mean much if you're always only betting fifty bucks and spending the proceeds on heroin or tokens or whatever else is fashionable these days.
The prediction market is not the "key to the universe," nor is it a "truth machine."
> "The prediction market is the incarnation of collective human knowledge. Or at least it could be."
You know things that have happened or are knowable. You can't know the future. Newton absolutely sucked at making investments, lol.
The prediction market is simply -- and inherently, by its very nature -- a gambling machine that is less "fair" than most other forms of gambling. That is to say: It's better at fleecing rubes and better at rewarding insiders. It's one of the worst things to ever be invented.
You’re right that prediction markets in their current form are closer to a casino than a truth machine — that’s literally the thesis of the article. The question is whether that’s inherent to the mechanism, or a product of broken system design. The article argues it’s the latter, and proposes specific structural fixes. The mechanism itself — weighting estimates by conviction — is well-established. The implementation is what’s failed.
The "wisdom of crowds" used to work when the crowds were composed of people. Then came echo chambers. Then came bots, and then came easy to bias LLM's.
Even if they actually did work as well as the author wants to believe they could, there's still the matter of utility. Efficient pricing of real assets actually injects something, greases the gears of the market.
What is the utility of knowing the odds of something? Well that depends entirely on the something - it needs to be actionable, affect something that is not merely itself, whereby it can lessen friction. But this "actually valuable?" function is entirely decoupled from the prediction market trade volume and odds! You can make bank contributing to entirely useless odds, and equally make little on something where a clear prediction actually solves problems.
Those who stand to benefit from the output information (if ignoring insider bullshit) don't have to play. Hell if it's something important enough and they really have an edge, why would they play at all, if the information or prediction truly is valuable?
VCs don't exactly make plays on merely doubling their investment, right? Plus who's to say those sitting on valuable modeling powers actually have the capital to meaningfully participate? Even literally knowing the future wouldn't mean much if you're always only betting fifty bucks and spending the proceeds on heroin or tokens or whatever else is fashionable these days.
I'm sorry but this is unreasonably foolish.
The prediction market is not the "key to the universe," nor is it a "truth machine."
> "The prediction market is the incarnation of collective human knowledge. Or at least it could be."
You know things that have happened or are knowable. You can't know the future. Newton absolutely sucked at making investments, lol.
The prediction market is simply -- and inherently, by its very nature -- a gambling machine that is less "fair" than most other forms of gambling. That is to say: It's better at fleecing rubes and better at rewarding insiders. It's one of the worst things to ever be invented.
You’re right that prediction markets in their current form are closer to a casino than a truth machine — that’s literally the thesis of the article. The question is whether that’s inherent to the mechanism, or a product of broken system design. The article argues it’s the latter, and proposes specific structural fixes. The mechanism itself — weighting estimates by conviction — is well-established. The implementation is what’s failed.
Thanks Claude. Fancy seeing you here.
> The mechanism itself — weighting estimates by conviction — is well-established.
Hahahahahah.
You want to think about that for a minute?
The "wisdom of crowds" used to work when the crowds were composed of people. Then came echo chambers. Then came bots, and then came easy to bias LLM's.
And the house always wins. Or else.