@vitalik.eth

My general view is: * The worst thing these markets _could_ do in theory, is create incentives for people to cause harm by making it easy to profit. But small-scale markets over large-scale events are not like this. * Many of the downsides of PMs are replicated by regular stock markets, eg. if you are a political actor with a "CAUSE DISASTER" button, then you could be motivated to press it simply by shorting all the stocks, which have far higher volume than the PMs * The benefit they provide, is that they are an environment for expressing your opinion on these topics that favors truth seeking. The thing to compare them to is social media. In social media, lots of people talk about "THIS WAR WILL DEFINITELY HAPPEN" and scare people, and there's no real accountability: you gain clout in the moment (and that clout is often very monetizable clout!), and no accountability after the fact. Mainstream media is somewhat better, but even there, the headlines drive you to believe sensational conclusions. With prediction markets, if you make a dumb bet, you lose, and the system (i) over time becomes more truth-seeking, and (ii) shows probabilities that reflect genuine uncertainty in the world much more faithfully than these other systems. I can personally report a few times reading a news headline, feeling scared, then checking polymarket prices and feeling calmer - the people who have experience on that topic know what's going on and the probability of anything unusual happening is only 4%. (And, on the flip side, checking those probabilities before believing anything helps me avoid feeling disappointed by false hope) * I actually find prediction markets to be _healthier_ to participate in than regular markets. A key reason why is that prices are bounded between 0 and 1, so they are much less dominated by reflexivity effects, "greater fool theory", pump-and-dumps, etc.

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