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Qwert Luiop
@qwertluiop
Inside look at Prediction Markets Prediction markets, some calls it betting markets, are platforms where participants can wager on the outcomes of future events — ranging from commodity prices and company earnings to election results. Much like stock exchanges, the 'price' of a bet in these markets reflects the collective belief in the likelihood of a specific outcome. These markets aren't new; they've been around for over 500 years, with roots in political betting during the 1500s. By the late 19th century, Wall Street had adopted prediction markets, linking stock market outcomes to presidential elections. Here, prices represent the market's consensus on an event’s probability higher prices typically suggest a higher likelihood of occurrence. While traditional markets involve indirect bets on events (like buying stocks that might soar if a particular candidate wins), prediction markets allow direct bets on specific outcomes, such as predicting the next president. Types of Prediction Markets 1. Con…
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Qwert Luiop
@qwertluiop
2. Automated Market Makers & Market Scoring Rules: To ensure liquidity, this system has the platform act as the counterparty to all trades, setting prices based on market scoring rules. 3. Real Money vs. Play Money: Some prediction markets operate with real money, while others use virtual currencies. In play money markets, participants trade using virtual capital, accumulating gains as virtual currency. 4. Other Crowdsourced Forecasting: Other methods include opinion polls, which rely on collective opinions without employing stock market mechanisms. In essence, prediction markets provide a platform for wagering on future events, with various systems from real money to virtual currency ensuring broad participation and liquidity.
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