There’s this idea of wisdom of the crowds, where if you poll enough people you’ll eventually converge upon the truth. But people are quick to give opinions, and not too careful with those opinions when they’re cost-free.
What if you ask them to bet money on their answers? Things start to get a little more interesting.
It turns out that when people have skin in the game, they are usually more careful with their opinions. This is what makes betting markets so interesting.
But rather than harnessing the power of prediction markets, the US started targeting them.
Enter decentralized prediction markets, like Augur, with no middlemen or gatekeepers. They allow consenting individuals to voice their opinions whilst laying money on the line.
I explain how they work, and why they could be an incredibly powerful tool for predicting the future.
By C. Edward Kelso and Naomi Brockwell
https://twitter.com/CryptoKelso
Visit Augur:
https://www.augur.net/
Learn more about DARPA’s proposed prediction markets:
http://mason.gmu.edu/~rhanson/policyanalysismarket.html
DARPA’s announcement of closure:
https://web.archive.org/web/20040807091819/http://www.darpa.mil/body/NewsItems/pdf/FutureMappressrelease2.pdf
See the current odds from centralized betting markets across the world:
https://www.electionbettingodds.com/
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Note: This episode was not sponsored in any way by Augur. I just like decentralized things.