Prediction markets have resonated with me since I started in crypto 12 yrs ago. It was initially bc I was a degen & wanted quick cash. Now I’m using prediction markets daily not to bet but as an info consumer to better understand the world.

Augur, Veil & others failed. Polymarket now working. How can we accelerate?

been trying to wrap my head around:

1) does it matter that someone bets on the underdog because the potential payout is outsized, not because they believe they’ll win?

2) how is a "prediction market" different from sports betting? isn’t it just a fancy term to describe the same thing wrt other aspects of society?

1) Matter in what sense? The promise of PMs is many different people with knowledge put skin in the game and contribute to price. Price is a piece of information that reflects sentiment. PMs don’t “predict” outcomes they reflect current sentiment

2) Most sports betting is binary. You win or lose. PMs are scalar

1) ya

2) most sports betting is you bet yes/no on final outcome and you win or lose all your money

On a pm, you bet yes/no and the final outcome is binary but when you bet, you’re actually buying shares that can be traded up until the outcome is final.

1) got it. would a good example be: most dems thought hilary would win and were surprised by trump. if PMs were popular then they would’ve been less surprised?

how do you use sentiment as an input on decision-making? why is it valuable?

2) i don’t understand, can you say more? aren’t PMs also binary?