Introduction
The rise of the online economy and the internet era has changed the way in which we live, do business, and invest. While generations prior needed to resort to a newspaper and a telephone – or perhaps a visit to their broker – to make some conventional investments on Wall Street, today’s investor has the opportunity to pursue growth of a sophisticated and diverse portfolio.
While this is wonderful, and the opportunities for wealth generation in cryptocurrency are often discussed, the sheer diversity of all the areas for investment can feel a bit overwhelming to newcomers, and even veteran investors. The prediction market is a chief example of this, often discussed but more rarely understood. Let’s look now in-depth at this exciting financial sphere.
Future markets
Speculation on the future of the market is not new. In fact, this happens every day in its most basic form. By buying a conventional blue chip share, someone makes a purchase today with the hope that investment will grow tomorrow. This is also seen in other areas of investment like real estate, and to a lesser extent, bank interest and term deposits.
The predictions market is built on this principle, but then supercharged. Instead of purchasing an investment with the prediction that the investment will grow over time, prediction markets are built upon the future event itself being the asset.
A simple example of this (and one that is seen in prediction markets) is predicting a politician will lose an upcoming election. While at first this may appear to be close to gambling, the chief interest of many who engage in the market is actually on the data the market gathers, as opposed to profit.
For example, mass predictions a politician may lose an election is usually a good indicator their policies and approach to governing is proving unpopular with the voters. While predictions unfold in a variety of ways, it’s certain today our tomorrow shall see great popularity of prediction markets within the cryptosphere. Two in particular are pioneering work in this field.
Augur
Utilizing etherium and built upon a Javascript platform, Augur is a open-source prediction market that promises its users accuracy and opportunity for profit. As aforementioned, one of the great advances of a prediction market is the opportunity to gain data.
Augur allows the opportunity for meaningful, live, and insightful data to be extracted, and do so with a diversity of investors buying-in. It also offers the chance to buy a share in a predicted outcome of a real world event. Feel sure the Golden State Warriors shall repeat in the NBA, or the Cubs will not in MLB? Buy a share and there is the opportunity to not only lead the market data, but gain a profit if you’re prediction proves right.
Gnosis
Gnosis is a prediction market that oozes ambition. Not only does it offer a cutting-edge platform that offers the opportunity to buy a share in future outcomes, but it also seeks to disrupt existing industries. Promising to delivering a user friendly opt-in insurance market, the Gnosis platform is testament to the growing convergence of finance and market research into one field.
In tandem to their aspirations within the insurance sphere, Gnosis also seeks to integrate itself with pop culture and current affairs. Its ‘Hunch Game’ offers the chance for buyers to invest in an outcome on events like a celebrity wedding being announced or movie becoming a blockbuster. Gnosis also seeks to pioneer a new form of civics, offering its own market-based form of voting and governance!
Conclusion
At its core the future is always going to be driven by the present, and progress underpinned by the work of those who imagine the possibilities of tomorrow, and seek to create them today. Prediction markets may have had a long time history as a practical feature of our investment world, but the opportunity for live digital integration and real time interaction is a real game changer. From Augur to Gnosis and across the board, we are entering an exciting era for prediction markets.
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