One should be able to predict the consequences of its doings before doing the same. We human beings have the behavior of betting on everything we think we have the full surety of happening in the future. There are a lot of times when people place bets on something happening shortly. And there are only two possibilities of these bets or predictions: whether these things that we have said are going to happen, happen and we win the bet or these things go in a way other than our predicted one and we lose. You can join any reliable trading platform like BitiCodes to effectively trade Bitcoin.
Sometimes people place these bets in which there could be or could not be the money involved. While some other times these could be based on only the money. The bets or predictions which are based on money can either be risky or fruitful at the same time. If the betting or predictions done by people are this much fun and can make them get fruitful outcomes then think what will happen if people do it often based on the data and logic. It will be wonderful, won’t it? Well, this is the reason which has given rise to the world of predictions where people predict something for some value of money, and this world of prediction is called prediction markets. In this article, we will discuss the prediction markets and how blockchain can be revolutionary in this market if both of them work together.
Based on the definition of a prediction market in the dictionary it can be defined as “A speculative market to make predictions.” which means the market in which people guess the probability of happening an event. In this market, the price is based on the predictions of the people. This type of market is very spectacular because in this market the outcome can either be 100% fruitful or nothing which means the outcome can be ‘zero’ as there are only two possibilities of anything that is either it will happen or not. The principle of the prediction market is very simple which states that if something is asked to a large no. of people and the average answer is considered then it would be nearer to perfection than asking any expert in the field. And this market is attracting more and more people these days and people are trying to study the behavior of the market and are placing predictions based on the data and logic. But to be able to do this one has to put some value in it because it is a kind of trading in which you put some money and the outcome can be that you multiply your amount of money or lose all the money you have put in.
Problems with the prediction market
The only problem with this market is that this is more prone to fraud and one can lose all the hard-earned money in this. This is because the market can be manipulated by anyone which can lead to a crash in the market. Various examples have witnessed this in the market. One such example is Intrade.com in which many people lost their money and now the company has to give the money of its users back to them. But there is one thing common in all these kinds of crashes: somewhere it was connected to the central banking system. This can be revolutionized by introducing the decentralized way of banking that is blockchain. If the prediction market is combined with the blockchain system it would be great and can deliver marvelously in the future.