> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout. Or maybe someone with inside information was looking for easy money.

I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.

If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death, I would use that as a trigger for whatever defense strategies I had in place. Someone has really good reason to bet a lot of money on the prospect that I'm about to die. It's probably someone who knows of an active plot in motion to try to kill me! The sooner I can find out about that, the better. I would much rather give them an incentive to make that known somewhat earlier than wait.

I feel like there must be some big piece of this puzzle that I'm missing that makes it so these cannot operate the way I imagine them, but I haven't heard anyone explaining what it is. Someone fill me in on what I'm missing here?

If the prediction market is for a non-trivial amount, it's likely someone is going to kill you in exchange for the money the prediction market offered them. The prediction market isn't acting as a prophet here, it's acting as a plausibly deniable murder for hire service and you are its victim.

The people "betting against" you dying just paid to have you killed.

The missing piece is the distinction between a market that observes reality and a market that instigates it.

The criticism is about the systemic risk of converting prediction markets into "Assassination Markets"—mechanisms where the payout is not a reward for foresight, but a bounty for action.

In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive.

But in the case of assassination, a $400,000 payout is sufficient motivation.

> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on them in a way that makes them known.

Except the paragraph you quoted nullify this benefit

> The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro

So we learnt nothing. For the entire duration the stock is online, its pretty much 50/50 then suddenly 1 day before, the ticker spikes to yes.

> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it.

Indeed. Insider trading is a feature of prediction markets, not a bug. There are two kinds of people who participate in prediction markets:

1. People who have insider information, or at least more sophisticated predictive capability than your average person.

2. Gamblers.

In effect, prediction markets are a way to move wealth from the second group to the first. If you understand that and still want to participate, cool. It's your money, and you're allowed to gamble it away if you find that entertaining.

At any rate, given the relatively small-potatoes level of bets going on at Polymarket and Kalshi, the article author's breathless anxiety about this is a bit overblown.

> I'm trying to understand what the criticism is here

> If I knew someone wanted me dead, of course I would want a prediction market on it, and if the odds suddenly shifted dramatically in favor of my death

No, you definitely would not want that. You don't want to live in the world like this. That's the point.

It's fucking horrible and dystopian, people betting on extra-legal invasions of countries, murders, things that could hurt or harm people where they have incentives to do something else that you've just distorted.

Gambling has been illegal, immoral, and proscribed by religions for literally thousands of years, in all sorts of different forms and iterations, for a reason. Because it's incredibly toxic to society.

You can make some arguments that pure games of chance, like casino games, and even maybe sports betting (since sports is a spectacle) aren't that bad. Based on what we've seen recently, I tend to disagree, but at least it's an argument.

But now we're talking about betting on all sorts of political issues, things that are illegal, things where people are acting in an official capacity and shouldn't be given incentives to subvert that. And all these other examples are just bad. There's not really any upside to this at all. It's just bad for society and it shouldn't happen. It's horrible.

If you feel like you're missing a big piece of the puzzle you should take a couple of steps back and think about the consequences of a world where this is common.