Comment by digiown
9 days ago
Interesting theory. I'm inclined to disagree, however. Prediction markets essentially allows people to trade information for money, even the types historically more difficult to trade. There aren't enough people betting on things for deliberate misinformation to become worthwhile, IMO, and most people would stop betting after being in the wrong too often, unlike casinos which always let you win sometimes.
I believe the misinformation is largely by self-interested parties. Politicians as well as influencers trying to push agendas, and the engagement/attention farming for advertising revenue, which are largely indifferent to truth.
I agree that the payoff from prediction markets doesn't seem worth it for this kind of manipulation. Collectively they hold a lot of money but I'm not sure how much individuals or groups are making. That story of someone making half a million recently was an outlier rather than norm, as far as I know.
But, what if prediction markets are just used for information gathering, but the real money is made from market manipulation via prediction markets? I'm sure a lot of investment groups watch prediction markets very carefully, if they can manipulate the predictions, or be manipulated by them, the money to be made is big enough for any level of effort to be believable.
It's the same as with crypto rug pulls, nobody is going to fall for that several times. Was still money to make in that before everyone and their grandma wisened up.
I don't think prediction markets work well for that. It is a market and you can't really prevent anyone else from benefitting from the same victims, which dilutes your earnings.
You don't need a perfect oracle to win on prediction markets. All it takes is enough influence to tip % in your favor. Card counting is very effective.
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> It's the same as with crypto rug pulls, nobody is going to fall for that several times.
Same grift, different mask. NFTs, shitcoins, blockchain startups, AI startups. We continually see that even if it’s not the same mark, there are plenty of fools easily separated from their wallets.