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Government leaders and political policy advisors, intelligence agencies, hedge funds & quants, and large corporations doing crowdsourced forecasting for sure. That's probably why they haven't just been made illegal - the very policy makers are utilizing the data streams from this to predict the near-future to a decent degree. Companies like Cultivate Labs [1] go into the maths of it all but if you prefer videos Hypermind has some good ones [2] - anyone thinking this is just some degenerate gambler thing and criticizing them on those terms likely has no idea that people are doing pretty serious quantitative analysis on these things, to which use I will leave to your imagination

[1] https://www.cultivatelabs.com/crowdsourced-forecasting-guide

[2] https://www.hypermind.com/master-class

by tenahu3 hours ago|

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Thanks for the links, very interesting.

by jamal-kumar2 hours ago|

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It's pretty much the same math behind weather prediction. Very roughly speaking, they have models to rank predictors (Or say, weather forecasting models) on accuracy and then figure out where the best predictors are all agreeing and the worst predictors are all saying the opposite of those best predictors.

It's worth noting that these prediction markets just run on blockchains, so pretty much anyone with the mathematical and technical knowhow can analyze those data streams and do much better than your average degenerate gambler who has no idea what they're getting into

Key is reconstructing the historical data from the smart contracts that run these things, that's a bit of a challenge but last I checked there's some companies which have figured this out [1]

[1] https://www.probalytics.io

by SirMaster6 hours ago|

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I thought the point of them is they are “truth machines” they give a financial incentive for the insider class to essentially share what they know.

The benefit to those outside the insider class are that we now have a better idea of the potential outcome.

by dvt6 hours ago|

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This is what their argument is, and personally I think it's a pretty good one. But the main issue is that retail is getting fleeced and lives are being destroyed by gambling, so non-professional investors should not be able to use it. Imo, the upside (some fisherman with insider knowledge betting on the Strait of Hormuz) doesn't outweight the downside (a large-scale societal gambling epidemic[1]).

[1] https://www.psychologytoday.com/us/blog/inside-out-outside-i...

by jamal-kumar6 hours ago|

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I think it's worth noting that my bank lets me ruin my own life too if I want with their own trading platform

by avaer6 hours ago|

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What are they sharing that they know though? That someone's getting bombed in an hour? That the government is rampant with corruption?

The first seems arguably treasonous. And the latter seems directly supported and funded by these "prediction markets".

If the argument is that prediction markets are truth machines, their social function seems to be support crime on a massive scale and get away with it.

by bostik6 hours ago|

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Well, that's the entire point.

If we take a completely utilitarian and amoral viewpoint, the insiders are selling their material, non-public information. The rest of the market participants are buying. From the latter's utilitarian perspective the former are providing a valuable service and getting paid for it. I'm pretty sure there was a legal term for such sales activity...

The only people playing fair are those who don't know how to cheat well enough.

by low_tech_love3 hours ago|

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How can anyone differentiate an insider bet from a normal one enough to actually make use of it?

by dvt6 hours ago|

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Afaik, Polymarket removes predictions that break CFTC's regulations (this includes assassinations, etc., at least in the US). They basically provide no value unless you're an insider, but they do tend to be leading indicators so it might inform some decisions (like: should you keep your money in oil?) that could be contingent on Polymarket predictions.

by paulpauper6 hours ago|

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Anyone can profit from an information asymmetry or mispriced markets--not just insiders with connections. If you are willing do do enough research you can in theory gain such an advantage. This is what some hedge funds do.

by 6 hours ago|

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by dogtorwoof6 hours ago|

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I would argue that the sole value of prediction markets is to make insider knowledge accessible to the general public, quicker than it normally would.

That’s why these platforms saying things like “we will roll out insider trading” is laughable.

by operatingthetan6 hours ago|

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>I would argue that their sole value is to make insider knowledge accessible quicker to the general public.

Is anyone using AI to track these audacious and large bets? Seems like you could actually do this to tell which ones are insider info and which are just stupid random bets?

by OutOfHere5 hours ago|

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I would just count which side of the bet has more bets above the median bet size with a zero or near-zero bet history. Insiders are more likely to use throwaway accounts than are non-insiders. Spoofers may however deter such analysis. AI may not strictly be needed for analysis.

by operatingthetan5 hours ago|

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I haven't actually used the platforms except looking at betting odds for elections. Do they give any tools for looking at past results and analyzing?

by 6 hours ago|

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by OutOfHere5 hours ago|

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Just because an insider bets on something does not in any way make the bet obvious to onlookers until the event is materialized for all to see. There is absolutely no surfacing of intelligence here because big bets are on both sides, winning and losing.