Daily Crypto Thought #3: Put Your đź’°Where Your đź‘… Is
Crypto tends to attract people who make wild predictions.
In hindsight, these predictions may look a bit silly, but given the trajectory of “Bircoin” last year, it probably didn’t seem crazy at the times when those predictions are made.
While making wild predictions is free for these soothsayers, it was extremely expensive for the hordes of retail investors who rushed to buy Bitcoin after seeing these types of stories.
Predictors should use prediction markets
Now that Augur, a prediction market where anyone can place a bet on a future outcome, is live, the first question we should ask these folks is whether they have put their money where their mouth is.
For example, CNBC’s resident Bitcoin pumper Tom Lee recently stood by his prediction that Bitcoin would exceed $20,000 by the end of 2018.
It looks like someone has created an Augur market for this prediction.
Hey Tom, if you’re reading this, go to this market and put in a large buy order at a price of 0.5.
This means that you’re willing to bet that the probability of this happening is greater than 50%. If you have enough conviction to set a 20k year end BTC price target, you must believe that the probability of it happening is at least better than a coin flip, right?
Currently, the market expects that the probability of Bitcoin exceeding $20k by end of 2018 is 8–10%. If you actually put in a buy order at 50%, I and other Augur traders will fill you all day long.
