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Comment by tptacek | Hacker News Reader

Yeah, I mean, they're a wretched hive of scum and villainy, I preemptively agree. I'm just saying, insider bets don't have the same ethical or legal valence on a prediction market that they do in the financial markets (even there, at least in the US, the principles underlying insider trading law are really poorly understood.)

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It's funny to think that the most villainous markets might be some of the humorous prop bets where the person creating the market (or a friend of the person creating the market) literally completely controls the outcome. Like "will I say SOME_WEIRD_WORD on stage at the conference tomorrow?".

Although maybe the villainy would come in more from deceiving people about whether or not an event was under your control, more than merely encouraging people to bet on an event that was clearly and unambiguously under your control.

I agree that is funny and want to take this opportunity to say I think things like Polymarket are bad, a real corruption of the original idea. I'm not sticking up for them!

What uses or structures of prediction markets would you like to see? For things like Polymarket, are you more particularly concerned about the kinds of participants (e.g. people who really are just gambling for entertainment), or about the kinds of questions that are the subjects of contracts?

The original prediction markets were internal things at large companies, which I think are a great idea. I've flirted for a long time with doing a vulnerability prediction market. The good-faith incarnations of prediction markets aren't open to all comers; they're structured so you can't meaningfully gamble on them.

How isn’t a knowledgeable person incentivized to find vulnerabilities but not disclose them?

I don't understand your question, sorry.

Yeah, sorry for not being clear enough. I just struggle how a good faith market can even exist. I immediately start thinking how participants would be incentivized to cheat by neglecting or even introducing vulnerabilities to win. Maybe I’m just a bit too cynical and/or should do more reading on the topic.

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