Vitalik emphasizes that prediction markets are not just gambling, but a social cognitive tool that can accurately predict future events.
Author: Gairika Mitra
Translation: Mars Finance, Eason
Vitalik Buterin, co-founder of Ethereum, recently emphasized a common misunderstanding people have about prediction markets such as Polymarket. He strongly opposes the viewpoint that categorizes prediction markets as mere "gambling" platforms.
Buterin's article demonstrates the important role played by prediction markets and the increasing significance they hold, attracting the attention of economists and policy experts.
In a post on X (formerly Twitter), Buterin revealed that categorizing Polymarket as "gambling" is a huge misconception. He also expressed concerns about why economists and policy intellectuals are excited about Polymarket.
"The reason prediction markets are interesting is because they are a social cognitive tool: the public can understand the importance of certain events and what might happen, and unlike social media or news websites, prediction markets are less susceptible to biased editorial opinions. Conditional prediction markets have applications in governance, and we are already beginning to see this," he said.
His post has received mixed reactions. While some believe "this is purely gambling," others agree with his stance.
"I agree that prediction markets offer more than just gambling. Thank you for pointing that out. I didn't find it particularly interesting because to me, it feels better than DeFi tools," one user said.
Just last week, Buterin purchased a new Ethereum Name Service (ENS) domain "dacc.eth" for 0.187 ETH, worth slightly less than $500. In a previous blog post, he also warned against blindly voting for political candidates who highly praise cryptocurrencies.
He presented some fair points in his blog and stated that just because a politician now claims to be crypto-friendly does not mean they will always be so in the future.
He also urged readers to delve into research and find out the stance of this politician five years ago. This applies to some politicians as well, such as Donald Trump, who was once a blunt critic of cryptocurrencies but now has a friendly attitude towards them.
Richard Chen, a general partner at the cryptocurrency-focused investment firm 1confirmation, shared a weekly trading volume chart of election markets versus non-election markets on X. He said, "Since the beginning of 2024, 88% of the trading volume has been related to elections." This indicates that a considerable number of people are using Polymarket for opinion polls to understand public consensus.
Summary
Prediction markets primarily predict the future by aggregating various viewpoints. Participants use their knowledge and insights when trading contracts based on the prediction results. Therefore, this can help create collective wisdom and provide valuable insights into future trends.
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