Comment by rmb177 | Hacker News Reader

Comment by rmb177 | Hacker News Reader

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I realize I'm an N of 1, but I've participated in prediction markets since 2019 and am just above 5 figures in profit. Not life-changing money, but it certainly doesn't hurt.

I'm pretty conservative in my predictions and just think there is a lot of free money on these sites. Maybe that just supports the sentiments of this article and most of the negative comments on this post.

There are certainly cases where I got run over by the steamroller picking up nickels, but in general that's few and far between. A good example is getting trump losing the 2020 election at 90% after the election in November. If you find those types of markets and compound the earnings it's a pretty nice savings account.

I've also been burned by insider trading and vague rule interpretations but at this point, you chalk it up to the nature of prediction markets. I now try to stay away from markets that are more manipulative (e.g. mention markets).

I don't understand the hostility to prediction markets. There are definitely hedging opportunities and we're all adults.

Have you heard of the Sucker Effect? Your gains come solely from the those who made the wrong bet. There is no inherent value generation in the prediction markets unlike the stock markets. Yes, there is money to be made, but at a net loss to the society, so many would not consider these bets "opportunities" but rather "gambling".

There is no value generation in trading stocks either beyond IPO, as stocks are then simply second-hand markets and can be completely irrational. The main value is just like the lottery : entertainment, excitment.

There is strong signal that companies then listen to and act on. The market serves (whether you like it or not) as the final board of executives.

There is value beyond IPO- companies continue to sell ("issue") shares on the public market as a way of generating cash. They also buy back shares when with excess cash, usually when the market value is low but sometimes, irrationally IMO, when it is high. They also use this as an incentive-backed compensation pool. The relative value of these is debatable, but I don't think it is correct that post-IPO public shares are just traded between third-parties making short-term bets. Happy to be corrected.

Define "net loss to the society." Society is just a group of individuals. If my counter-party was a democratic aide hedging that they wouldn't have a job come January, was it a real loss for them? The money I've earned on prediction markets has certainly allowed me to spend more money in the economy. What if a trump supporter watching the market saw what a longshot it was and decided not to go to the Capitol on January 6th?

The value generation is for passive observers: it is theoretically more informative to be told that there is a y% chance of x from someone with a financial incentive to be right.

(also, we allow plenty of zero and negative sum interactions in society. I don't know why this is special.)

This one is regulated as a commodities derivative rather than gambling

Call a spade a spade, rather than calling it a club because the president’s son is on the board

Corruption is corruption.

I think the problem with prediction markets is the ease of people changing the outcome and profiting on it from others expense.

It’s worse than insider trading as it’s betting that Kyle’s mom will bomb Gaza and then making it happen.

Any societal good from knowing is outweighed by the injustice.

If there was any regulation by government or the markets themselves then it would be better. Betting in things you can’t affect like the weather or earthquakes or elections or whatever is actually pretty useful for awareness.

> Betting in things you can’t affect like the weather

get a hairdryer and you too can control the weather

I understand the hostility to them getting into sports betting since that seems to trigger a particular unhealthy impulse in young men but your anger should be first directed at the companies that are 100% sports betting (DraftKings and their ilk). I don't think the normal things prediction markets do subject young men to the same temptations.

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