Prediction Markets of the Future: A Crowd Sourced Answer for Everything
Many often ask ‘’what real world problems do prediction markets solve?’’ As we know, very often the wisdom of the crowd is more accurate in determining the vast majority of short term predictions published on most platforms. However, when one tries to get more accurate predictions on longer term events, very often one finds there is a lack of patience to wait for long term outcomes, so the overall votes are lower than those for markets with shorter conclusion dates.
At Stox, we aim to make prediction markets part of everyday life, giving our platform members the ability to cast their vote on a variety of different markets, and even create their own. We believe that when people have the ability to ask ‘’Will X or Y happen?’’ or questions about which team will score more points or win a match, they are able to contribute to their ideas, knowledge and experience to answer the probability of a possible outcome, giving value to their individual voice and point of view.
In prediction markets, a great thing about blockchain technology is that through decentralization, the ‘power of one’ is returned to the collective group; giving strength to the individual predictor while simultaneously strengthening the crowd’s wisdom. When each predictor/voter is empowered to review a particular question and answer knowing that their point of view is impacting the accuracy of the crowd sourced answer, the vast majority take the opportunity with the hope of gaining stature by being correct.
Gain Better Insights with the Crowd
Research and numerous studies have indicated that when predictors collaborate, better and wiser answers are often found. This is why prediction markets are often so efficient, because they rely on the wisdom of many contributors, and the strength in numbers factor of many opinions increases the quality of the crowd’s response.
Further, each predictor/voter has a vested interest to predict as accurately as possible as they have usually have either a financial interest or personal reputation element staked on their preferred outcome. These factors strengthen the value of prediction markets.
The incentive for individuals to gain either reputation or financial benefits contributes to valuable, quality insights and voting patterns, as the majority of individuals respond positively to either:
a) financial gain for their opinions on matters, or
b) heightened or enhanced status for a record of being accurate.
Both elements provide quality incentives for accurate predictions from as many people as are interested in the given market. The more people that are interested in the markets the better; as more predictors leads to a higher rate of accuracy in predictions.
