I was wrong about Prediction Markets
Donald Trump just got elected, and while polls showed a very close race, prediction markets such as Polymarket were confident he would win. But why? I couldn't understand how they could be so certain when regular polling showed such unclear results.
I watched an interview with a French trader who invested millions of dollars betting on Trump's victory. This helped me understand what was really happening. Instead of writing about his research like a journalist would, this trader did careful analysis and put his money behind his findings. He spotted the difference between public perception and reality – and made a lot of money for his work.
This case reveals some worrying issues. How could pollsters produce such incorrect polls? And why were these polls published without proper verification? There's clearly a problem with how information is gathered, analyzed, and shared. Prediction markets create a financial reward for people who do thorough fact-checking. Whether this is good or bad is a larger discussion for another time.
Going forward, I'll definitely use prediction markets as one of my tools to get beyond the limited perspectives that social media algorithms and news outlets might be showing me. They can help us think more critically about what's really happening.
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Meet the French trader who bet $40 million on Trump winning the election.pic.twitter.com/XXBzEA595e
— Visegrád 24 (@visegrad24) November 5, 2024