Polymarket Hints at an Alternative News Medium, Stirring Discussion Regarding Its Potential Role in Future Journalism
If you're a high-stakes gambler or justplain interested in events, you may have heard about Polymarket, the hot prediction market platform where you can bet on a variety of outcomes using crypto. But, if you're not familiar with its operations, you might be wondering, what exactly is Polymarket?
In essence, it's a gambling website, funded by venture capital, offering users a place to bet on different events, from politics to sports to entertainment. It also has features like a newsletter, comments section, and AI content generation deals, all centered around crypto betting.
Polymarket gained massive attention when famed prognosticator Nate Silver joined as an advisor and Peter Thiel invested $70 million in it. It has even caught the attention of The Wall Street Journal, which shares its modeling and reports on its predictions.
But, if you fancy placing a bet on the U.S. election, Polymarket is the place to be. Here's a breakdown of its workings:
Every outcome on Polymarket has a clear answer—will it be Trump or Kamala in 2024? Will the U.S. have a case of MPox by September 30? Will Trump ever say "mog"? Such questions, each with varying answers, are often simplified into binary yes or no options. For instance, what will the box office for Beetlejuice 2 be? Less than $75 million, yes or no? More than $105 million?
How Polymarket Works:
Users can buy either a yes or no "share" to make a bet on an answer. The cost for a share on Trump winning the presidency is 49.8 cents at the moment. If he wins, users earn the difference, up to a dollar, back. Thus, with a Trump win, earning 50.2 cents is possible if a user locked in at 49.8.
Users can also sell off their shares as the prices fluctuate, making a profit if they correctly predicted market movements. For example, someone could buy a share of Trump at 49.8 cents and later sell them if the odds on Polymarket for Trump improved.
A lot of money moves through the site, with users investing $93 million in a Trump "yes" and $85 million in a Kamala "yes." Interestingly, Polymarket doesn't take any cut from these bets.
The company doesn't just rely on gambling for revenue. It aims to be the future of news, as declared by its founder, Shayne Coplan, who believes that Polymarket offers a novel information format that is driven by financial incentives for truth.
Polymarket's Vision:
Coplan argues that while traditional forms of media may be biased or influenced by engagement baiting, prediction markets, like Polymarket, provide more accurate indicators of reality and the future due to their financial incentives. In his words: "Research has shown prediction markets to be considerably more accurate, on average, than polls and pundits. Traders combine all available information: news, polls, and expert opinions, and make informed trades based on that combined knowledge."
Coplan envisions Polymarket as the future of news, selling this vision to Substack by offering an Axios-style newsletter called "The Oracle." This partnership allows Substack users to embed Polymarket prediction tables in their stories.
Despite being criticized for offering unbiased information, Polymarket's predictions have gained popularity. However, it's essential to note that these financial incentives can occasionally lead to overwhelmingly biased views, as observed in the artificial intelligence (AI) debacle with controversial AI company Perplexity.
Polymarket partnered with Perplexity to provide summaries of news relevant to bets; however, this partnership raised concerns when Perplexity was accused of plagiarism by Forbes, threatening legal action. Later, Wired extensively reported on the AI, calling it a "bullshit machine." Hours after Wired's expose, Perplexity was found to have plagiarized the article.
Prediction markets themselves are not new, and betting on election outcomes is common in some places, such as the U.K. It's worth noting that such activities are not entirely legal in the United States, although VPNs and crypto transactions attempt to circumvent these restrictions. It's advisable to consult a financial advisor regarding taxes before investing in Polymarket or similar platforms.
Regulatory bodies also keep a close eye on these proceedings. In 2022, the Commodities Futures Trading Commission (CFTC) fined Polymarket $1.4 million for failing to get regulatory approval. The CFTC proposed an outright ban on the practice of derivative market betting on U.S. elections in May 2022, citing potential harm to the election process.
While Polymarket's current version of "The Future of News" might seem like the old world with an added dash of AI and crypto, its predictions have garnered attention for their accurate forecasts. As its popularity grows, it remains to be seen whether it can continue to stand against potential regulatory scrutiny.
- Polymarket, the prediction market platform, is often compared to a gambling website due to its crypto-based betting feature on various events, attracting both high-stakes gamblers and tech enthusiasts.
- In the tech-driven future, Polymarket's founder, Shayne Coplan, envisions the platform as more than just a gambling site; he sees it as the future of news, providing a unique information format driven by financial incentives for truth.
- The famed Wall Street Journal features Polymarket's modeling and reports on its predictions, indicating a high level of trust and attention in the tech industry.
- Despite the promise of unbiased information, Polymarket's partnership with controversial AI company Perplexity sparked concerns about providing accurate and original content, raising questions about its commitment to maintaining balanced and reliable reports.
