Vitalik defends prediction markets: They should not be classified as "gambling"

Original title: Vitalik Buterin Defends Prediction Markets Against "Gambling" Misconceptions

Original author: Gairika Mitra, The Shib Daily

Original translation: Eason, MarsBit

Ethereum co-founder Vitalik Buterin recently highlighted a common misunderstanding about prediction markets such as Polymarket. He strongly opposes the view that prediction markets are classified as pure "gambling" platforms.

Buterin's article shows the important role played by prediction markets and the reasons for their increasing importance, attracting the attention of economists and policy experts.

In a post on X (formerly Twitter), Buterin revealed that it is a huge misunderstanding to classify Polymarket as "gambling". He also expressed concerns about why economists and policy intellectuals are excited about Polymarket.

“Prediction markets are interesting because they are a social cognition tool: the public can learn about the importance of certain events and what is likely to happen, and they are less susceptible to biased editorial opinions than social media or news sites. Conditional prediction markets have applications in governance, which we are already starting to see,” he said.

His post has received mixed reactions. While some people believe that “it’s all gambling,” others agree with his stance.

“I agree that prediction markets offer more than just gambling. Thanks for pointing that out. I don’t find it particularly interesting because to me it feels a little better than a DeFi tool,” said one user.

Just last week, Buterin acquired a new Ethereum Name Service (ENS) domain “dacc.eth” for 0.187 ETH, worth just under $500. In one of his previous blog posts, he also warned against blindly voting for political candidates who speak highly of cryptocurrencies.

He made some pertinent points in his blog post and said that just because a politician claims to be crypto-friendly now, it doesn’t mean he will always be so in the future.

He also asked readers to dig deeper and find out where the politician stood five years ago. This is also true for some politicians, such as Donald Trump, who was once a vocal critic of crypto and now has a friendly attitude towards crypto.

Richard Chen, general partner at crypto-centric investment firm 1confirmation, shared a weekly trading volume chart of election markets versus non-election markets on X. "Since the beginning of 2024, 88% of trading volume is related to elections," he said. This shows that a considerable number of people use Polymarket to conduct polls to understand public consensus.

Summary

Prediction markets mainly predict the future by aggregating various opinions. Participants apply their knowledge and insights when trading contracts based on the predicted results. Therefore, this can help create a collective wisdom that provides valuable insights into future trends.

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