That's what I experienced early in my career, and then I independently discovered Rule 3: "Tell the truth to people who want to be lied to, and you'll go broke."
The key to surviving in such an environment is to let go of your ideas of the truth. The customer doesn't want to hear it, and doesn't want to know it. Deliver the lies that will make them happy and only those lies. The lies themselves are usually reasonably realistic; it's only when you combine them with your common-sense notions of truth that they become stressfully unrealistic. So give up your common sense and just deliver the lies the customer is asking for.
A less cynical way of putting this is to adopt the customer's frame of mind. The stress comes from the tension of your internal beliefs vs. the customer's internal beliefs; because they are coming from two different people, they are frequently incompatible. When you are working for a customer, you are working for a customer.
> The key to surviving in such an environment is to let go of your ideas of the truth. The customer doesn't want to hear it, and doesn't want to know it.
This is exactly it!
Like you might think "the promised features are not feasible." No, the features you will soon deliver are feasible, on account of you're about to go build them! If you fail, that is still very bad. But the point of rule 1 is you don't have to act like you signed up to deliver exactly X feature on exactly Y date. Instead you can think a little bit, and then you calmly set off on a process that should reasonably end up with the customer being happy. To many people this strategy feels like lying.
Yup, my breakdown was that I couldn't understand that the client doesn't actually care, they actually prefer to be lied to. Personally, I decided not to live in any system where either side is acting like this. Knowing the rules probably wouldn't have helped me, because I would've found the whole thing (and still do) disgusting and idiotic.
In practice there's a lot of issues with asymmetric information. The company knows its own operations and financial position better than random traders on Wall Street. It is rational for it to buy back stock when the market value is lower than the true intrinsic value of the company, and to sell stock when the market value is higher than the true intrinsic value of the company. Therefore, traders often treat buybacks as a signal that the company is "cheap" (at least in the company's own view) and pump up the price accordingly, and treat stock issuances as a sign that company management believes that the stock is "expensive" and push it down accordingly. Company management has more inside information than market participants do, but is usually prohibited from trading on it. Stock issuances and stock buybacks are one of the few cases where insider-initiated trading is legal, because the benefits accrue to the company as a whole rather than a few individuals.
I agree, and traders will also take into account the fact that there is a gold rush going on (into AI) and consequently view this issuance as not as much of a sign that company management believes that the stock is expensive as they would have if no gold rush were going on.
If people actually dumped index funds for cash en masse it would be catastrophic. To attach some numbers, MSFT averages about 35M shares in daily volume, and that includes all the market makers, HFTs, etc. BlackRock (iShares) owns 593M shares of MSFT and Vanguard owns another 482M. Together, the amount of shares that index funds own is about a month and a half of total trading volumes. I'd bet that such a crash would unfold over about 2-3 days, which brings up the specter of stocks literally going "no bid", where there are not enough buyers for every seller to sell, at any price.
Likely the government would step in and inject cash directly into the markets to support them in such a scenario, because a broad-index stock market crash is the modern-day bank run. Retirees carry the bulk of their savings in the form of stocks; if it disappears, we'd likely face revolt.
Same old story of too big to fail. The government will "inject cash", that is borrowed, so that retirees 401k accounts don't go down. But who pays back the borrowed funds? The non-retirees. Everything is optimized for the boomer generation to be fine, who cares about anyone else?
If you hit sell on a vanguard ETF and it sells on the market, then Vanguard isn’t the buyer is it? So in that situation with everyone dumping ETFs there would be a lag on the time taken for the ETF to sell and Vanguard to then dump the stocks back out in the market. It’s never occurred to me the situation where huge numbers of people dump index funds and how Vanguard/Blackrock account for that without becoming bag holders of the underlying stocks themselves.
In any case, I’m not sure that large enough numbers of ETF holders are sitting close enough “to the button” to hit sell in the event of a sharp downturn occurring over the space of even a week or two. And a lot of them would see it as an opportunity to DCA into the dip anyway.
If it's an ETF it's a little complicated. The usual mechanism for selling an ETF is that there's a buyer on the other end who's buying shares in the ETF itself, not the constituent stocks. Arbitrage keeps the price in line with the index constituents; if the ETF diverges from its constituent assets, some HFT can buy the ETF and sell the constituents and that will force them to converge.
However, most ETFs are also setup such that they can create or destroy shares in response to large shifts in demand. In this case, if enough people hit sell, the ETF itself will buy back shares and use the proceeds to sell the underlying assets, in a transaction that mechanically should be market-neutral and just propagate the supply/demand of the fund down to the individual stocks.
With Vanguard specifically, it's even more complicated, because VTI is not a separate ETF. It's a share class of the Vanguard Total Stock Market Index Fund. But the mechanism is largely the same - it has the same Authorized Participant system to mint new shares in case of high demand and redeem shares if everybody sells, and then passes these requests on to the underlying mutual fund, which can then piggyback on some of the tax efficiency benefits of the ETF.
> CRSP indexes were also recently changed to better accommodate fast entry. New IPOs are eligible for CRSP's suite of indexes after five trading days, provided they pass the index's eligibility and investability screens. Previously, these screens included having at least 10% of shares qualifying as freely tradeable (known as float shares outstanding, or FSO). However, in April the methodology changed to allow stocks with either 10% FSO or approximately $3.3 billion in float-adjusted market capitalization to be eligible for index inclusion. The weighting of stocks in CRSP indexes is also based on free float, which should help address the investability challenges associated with thinly traded stocks.
The staccato style is often effective for emphasis, but the paragraphing is wrong on this article. It should've been:
> The headlines say yes.
> Patriot crews shot down a Kinzhal over Kyiv on the night of May 4, 2023. Arrow-3 batteries killed Iranian ballistic missiles over Tel Aviv in April and October 2024. A pair of THAAD batteries in Israel emptied something close to a quarter of the US national inventory across twelve days of war in June 2025. The headline word in every one of those engagements was hypersonic.
> The headline is wrong.
> No maneuvering boost-glide hypersonic vehicle has ever been fired in combat against a defended target. Every “hypersonic intercept” the press has reported in the last three years was a different class of weapon: an air-launched aeroballistic missile, a quasi-ballistic short-range ballistic missile with a maneuvering reentry vehicle, or in one case a MIRV bus on an intermediate-range ballistic missile that the press could not stop calling hypersonic. The Avangard, the only Russian vehicle that meets the strict definition, has sat in silos in Orenburg since 2019 without being touched. The Chinese DF-17 has never been used. The American Dark Eagle has not yet been ordered to fire.
> So when we ask “can you stop a hypersonic,” we are partly asking “what would happen if anyone fired one.”
There are assorted other issues with the article as well, like excessive use of passive voice, lack of parallelism, and too much meta-talk.
It's still sandboxed and deleted when the user clears private data for the website.
The main advantage it has over things like cookies, local storage, etc. is that it provides a byte-oriented, random access API and as a result, you can use third-party libraries like SQLite that expect a file API. Which is more important now that we have tools like Emscripten and WebAssembly that let you use existing C libraries on the web. At the same time it has security guarantees such that webpages cannot write arbitrary files that will be viewed and executed by the user.
Also, in theory you could use this side-channel attack on localStorage and sessionStorage. Its only requirement is that it needs an API that writes to disk where you can measure the latency of a synchronous call, since the fingerprinting is just measuring the interference pattern between disk accesses the attacking website does vs. disk accesses that other websites do.
Attacking website periodically makes random reads from a large file in localStorage. Other tabs and websites open have Javascript running that periodically performs operations that will result in SSD traffic. For example, GMail has a certain polling interval to check for new mail, and each request is going to result in a cache write that makes the SSD busy and delays other conflicting IO operations. Reddit checks for new chat messages. Large memory-heavy websites get paged out of RAM.
The pattern of IO operations that a website makes creates a fingerprint of interference with the IO ops that the attacking website is doing, showing up as differing amounts of latency as the SSD is periodically busy. This fingerprint can then be reconstructed to a specific website by training a CNN on it, basically using a neural net to classify a certain pattern of delays to the IO ops that other websites are doing.
In theory it makes sense, but it seems very noisy. Anything that makes absolutely zero requests or IO operations in the background (like say HN, or most old-school text sites) wouldn't show up, and would be indistinguishable from any other zero-request site. And having other sources of IOps on the same computer - say you're running an Ethereum client that's perpetually updating the blockchain, or you're downloading a bunch of torrents, or you've got DropBox and it's syncing your directory - would introduce noise that throws off the classifier.
Usually side channels get way stronger when exploited cooperatively. Think ad scripts embedded on multiple sites communicating with each other across tracking protection and other sandboxes, for example.
Thats a good explination. It does seem extremely noisy and not at all practical for fingerprinting a user compared to other methods. If you have javascript enabled assume you can be fingerprinted.
That's interesting. Thanks for the explanation. If I read this right this isn't as effective against spinning HD-based systems and there is a dependence on the user maintaining more than one tab as they browse?
If that's the case then my system which is still HD-based is not threatened and since I tend to close tabs and windows and just spin up a new private window for each site while clearing cookies, etc on exit then maybe this is a non-issue for me. Or maybe just block javascript too.
It'd have some effectiveness against spinning HDDs because it's really just measuring contention for the I/O subsystem, but it'd likely be less because the kernel usually buffers writes to HDDs internally. But then, the kernel also usually buffers writes to SSDs, just with lower latency between the call and the data being written.
I don't think too highly about this particular threat vector - it seems like the kind of attack where you could perhaps get a working proof of concept going in the lab to write a paper and demonstrate some results, but actually using it to attack people at scale seems prohibitively noisy. People that close all their tabs when not at use are not at risk (and the data I had was that most people don't actually use browser tabs, they're very much a power-user feature). People who have disk-intensive other processes like Bittorrent or various file-syncing services aren't really at risk, because those other processes inject similar noise into the data stream. The signal in general seems weak because of buffering and differing SSD latency and so on.
Yeah, your comment squares with (and the GP's point #2 contradicts) what I learned in my college Science & Gender class, which was a combined neuroscience/psychology offering where we read a bunch of papers. Most of them supported that testosterone was the primary driver of libido in both men and women, with higher T levels corresponding to higher sexual desire and lower T levels corresponding to the opposite.
E2 as a libido regulator is a cross-species conserved effect.
The landmark study in humans for this is the Finkelstein 2013 paper [0] -- they gave humans Testosterone with and without AI to block aromatization to E2. In the AI group, sexual desire and erectile function declined markedly across the board, even when they were given high doses of testosterone.
Then you have studies like [1] and [2]:
> "Both estradiol (E) and dihydrotestosterone (DHT) contribute to the activation of mating, although E is more important for copulation and DHT, for genital reflexes."
> "We show here that a single injection of estradiol (500 μg/kg) rapidly and transiently activates copulatory behavior in castrated male quail pre-treated with a dose of testosterone behaviorally ineffective by itself."
The underlying theme is that across animal species, estrogens are regulators of sexual desire/libido while androgens support the necessary biological functions (erection) required.
That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices, who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they have better information.
The unfortunate thing is that, while their academic position sounds plausible on paper, just like with most crypto things it's just a money grab.
How many crypto people (with legitimate backgrounds just like the founders of Polymarket and Kalshi) stood up and said big things about freedom and the unbanked etc., turns out they were literally just scamming people- there are so many examples besides FTX.
Letting people bet on any random thing is not at all related to this "price everything" theory. If that was their real goal they wouldn't behave so much like a normal sports betting company. I have yet to actually hear anyone defend their actual actions in a plausible way.
Did you ever consider that the crypto scammers might not be the same people as the crypto freedom folks? It wasn't one grand trick by a collective of genius con artists... Much like the cashier at the store isn't to blame for that guy calling your grandma and trying to trick her into sending money from her bank account.
Crypto is a speculative investment vehicle, its basically a lottery machine - why would people who are so invested in a lottery machine that you can avoid taxes or buy drugs with be surprised they are considered part of the con artists doing the pump and dumps?
> And why exactly are we "hoping for a global currency revolution"
So that Visa and MasterCard can't censor things they don't like. So that PayPal can't block creators from withdrawing money because they made a Japanese style game
When institutional investors and yolo 'get rich' people sell their coins it will drop to (in case of Bitcoin) 2,000 USD again, it would be closer to a currency then. However people would go crazy, because it's only very, very rarely used as a currency. Most just use it as a speculative asset.
Don't forget about regimes like Iran and North Korea using crypto to receive bribes, ransomware payments, and launder money. Crypto is a cesspool. Just wait for the bank runs when everyone tries to bail out. There's a reason we have banking regulations.
I think it's clear that crypto has real market-based utility as an exchange of value. It's just that much of that utility is illegal, for a spectrum of meanings of that word. Paying crypto to murder people is not the same as wanting to get out from under your shitty government's currency into another more stable one.
The whole Epstein thing (the money, I mean) just shows that money has always wanted to be moved around, and a certain class of people don't care how it gets done- I mean the arms dealers, but also the billionaires hiding money in their charities. A libertarian would say that crypto democratizes that for everyone. I don't think it can last forever though.
It barely makes sense, though? The idea is that it will surface insider information to the public. That happens only because the insider is financially incentivized to place a bet. But they will only bet if they can win money, and they can only win money if someone is taking the other side of their bet, which necessarily means someone without their insider information.
In other words, prediction markets require suckers to lose money to insiders in order for the public to learn new information. In this case, people lost over a million dollars to an insider so the public could learn that "d4vd" was searched a lot.
People with insider information often aren't necessarily aware they even have it. "Superforecasters" are often just "good at predicting" moves within a given vertical, because they have expertise and exposure to the trends of that vertical, and are good at making deductions and extrapolating trends. Those people make money from prediction markets just as often as people with true insider info do.
And the people they're both making money from, are people who think they have enough expertise + exposure to function as superforecasters — and who probably could function as superforecasters, in a market with fewer "sharks" in the pool — but who lose out simply because they were slightly less well-calibrated than whoever they were trading with.
Which is to say: prediction markets can still work and be worthwhile to participate in, even if everyone in them is rational. They don't require suckers.
But, in practice, they certainly do seem to attract them.
> And the people they're both making money from, are people who think they have enough expertise + exposure to function as superforecasters — and who probably could function as superforecasters, in a market with fewer "sharks" in the pool — but who lose out simply because they were slightly less well-calibrated than whoever they were trading with.
This seems like a complicated way to say "suckers". Of course they don't usually self-identify as such and think they act rationally.
They're not suckers; they can win, if there's nobody who happens to be more-well-calibrated than them on a particular bet. And that can happen more-often-than not, depending on how carefully they bet.
By the conventional use of the term, a "sucker" is always a sucker; suckers suck constitutionally.
But a professional gambler in a skill-based game (e.g. poker), is only going to lose money on net, if they happen to be playing against people with "higher ELO" than them.
And in the case of a prediction market, the "ELO" isn't absolute; people's expertise "rankings" are relative to each particular question. There's no "general factor of expertise" that makes someone able to beat the odds on every question. Each question forms its own market "niche", where only people with expertise will be interested in participating; and so each such niche is to some degree illiquid, with not enough trades to make an efficient market (i.e. the kind you wouldn't expect to find a $20 bill on the ground in.)
To be more concrete: while there are "specialists" (insiders, but also ordinary experts in hyper-specialized verticals) who might clean up by betting on the things they know a lot about, they'll generally be miscalibrated as overconfident on the things outside their specialty (see: any scientist who got famous for their research and now writes pop-science books about topics they know very little about, often making incorrect statements), and so will lose out vs "generalists" who can't successfully make the in-domain bets the specialists make, but who are better-calibrated on multiple topics (or on particular odd intersections of topics) because they spend less time hyperfocused on one niche, and more time flitting between various niches.
Which is to say: there's no "house edge" here to lose against. In a prediction market, everyone's going to be the "shark" for some questions and the "sucker" for other questions. Every question is its own game, and every game has an edge, but with that edge going to a different party. If you actually know what you know, then you can identify which questions you have the edge for (probably a finite number), answer only those, and make some (very small) amount of money. You may lose sometimes because someone knew even better than you (esp. for questions that go beyond yes-or-no, where there are 3+ mutually-exclusive prediction-categories you can buy into, such that others might "hit the bullseye" while you just "hit the ring"); but on average, if you stick to your "field of pre-eminent expertise" (presuming you have such), you would make a small positive gain over time.
That being said, anyone without a "field of pre-eminent expertise", who thinks they can place correct bets purely by being rational + doing the level of research one can accomplish using public Internet sources, is 100% a sucker, yes.
I think some may be using the terms "insider" and "shark" in different ways. To me:
* Insider: A person who is cheating because they actually know the answer in advance or have direct, non-public, confidential information which materially improves their odds over even domain experts. If caught, they can go to jail. Insider as in "insider trading" not just an "industry insider".
* Superforecaster: A person who has deep domain expertise and/or experience as well as strong research and estimation skills which increase their odds over a naive bettor. This may include historical data or first-hand investigation which is not commonly or easily available to others but has not been obtained illegally.
* Sucker: A person who bets despite having far less than a superforecaster's expertise, experience or knowledge. Probably over-estimates their knowledge while underestimating the degree of relevant knowledge which may be legally obtainable by others.
* Shark: Not really clear to me other than more skilled/knowledgeable than a sucker.
The other side could be someone with natural exposure to the question that wants to hedge, for example people traveling to/from the middle east were exposed to the Iran war question(s) and could get insurance against airspace closure through prediction markets.
This argument doesn't work for 90+% of the volume on PM/Kalshi but I think most of the questions there are just gambling.
Disclaimer: I have not read any literature on the economics of prediction markets, and I know nothing about the mechanics of Polymarket/Kalshi.
I would imagine that in theory, everyone thinks they have the best information at the time, something like:
House: "Odds that X happens? We'll put $1 on both sides to get it started. 50/50."
Someone comes along: "Oh dang, I'm definitely more than 50% confident that X is happening. Let me put $1 in." Now it's 67:33.
Someone else comes along: "Oh I'm more than 67% confident X is happening, let me put $1 in." Now it's 75:25.
And of course, you get people going: "I'm more than 25% confident that X is _not_ happening, let me put $1 in!" And now it's 60:40.
The murky part, I would imagine, comes when the odds and the payout actually act as something that influences the outcome, but in perfect theory-land, if everything goes as planned, this should move the odds to the most informationally-accurate measurement, which should, in theory, benefit observers by making this measurement public.
Sure but these things are not really "odds" anymore, right? The most searched terms might be a mystery to the general public, but not to the engineers at Google. It gets even murkier when you can influence the outcome. The exact temperature at an airport might be difficult to predict, but if you are able to hold up a hair drier to the sensor for a few minutes you can be pretty sure it won't be cold.
When the other side either has information that makes it not a bet, or if they have means to influence the odds, the best outcome for outsiders is to not play at all.
And of course, the entire conceit relies on the idea that more accurate information to the public is always good and always outweighs the negative externalities. But is it really all that important to the public good what the most searched artist is on Google in a certain year? Or if an announcer will say a certain word during the super bowl?
I don't think this is entirely true. Polymarket is extremely transparent on user accounts and markets so you can see who is betting what, their other bets, and so on. The article mentions that other users fingered him for insider trading. That itself opens up an opportunity for profit, by simply following the trades on what he seems to be an insider on. It'd be like if you could see in real time what Nancy Pelosi was investing it - shadow her trades and make big bucks with the soon to be announced market shifting government deal/regulation/etc.
The markets also open up the door for hedging, arbitration and other sorts of opportunities where you don't necessarily even care what the result is.
Right, and that is not some grand secret. Every person taking a side on the bet is aware of that nuance for any trivially gamed market. If you think the size of the market is sufficient to incentivize somebody to do so then that would obviously increase the yes odds.
It's akin to betting on penny stocks in the market where you are also aware that a single person could dramatically shift the market one way or the other if they wanted so you're betting not just on the stock's performance, but also on the meta-market.
it is good if the losers are voluntarily participating. They are not coerced (stupidity is not coercion) into it, and therefore, it is reasonable that they expected to win the bet.
The only problem i have with polymarket (and others like it) are that insiders can often remain anonymous. It should not, and if an insider earns, but their win requires they remain anonymous or face some social/reputational repercussions, then that should happen.
Therefore, as long as KYC is enforced for these markets, i would have zero issues with their existence.
In most modern societies, we regulate all sorts of things that people would otherwise willingly do to their own detriment. We ban drugs; we have labor laws; we have usury laws; we require seatbelts; we have securities regulations; etc. (Notably, until very recently, this included most forms of gambling.)
So the mere fact that losers are voluntary does not, IMO, make the situation good.
all of those things you mentioned have damages sustained on third parties that did not have consent. And tbh, my opinion is that the banning of drugs have done more harm than not banning it (but instead, allow it to be sold safely and cheaply).
Gambling to me, is like that. Banning it doesn't stop it, and it has barely any harm other than to the person who over-indulge. Regulating it is a good idea - where regulating means there's oversight on cheating, on the platform's governance etc.
> all of those things you mentioned have damages sustained on third parties that did not have consent.
The family that suddenly finds themselves homeless because one parent decided to go deep into debt to fuel their gambling addiction sure seems to have "damages sustained on third parties that did not have consent."
Gambling addiction has impacts beyond the person gambling, because we live in a society. They might gamble away their kid's college fund, lose their house, or resort to stealing money from family members. When they take out loans that they default on, it impacts the balls and raises costs for everyone else.
All of these are very similar to secondary and societal effects of hard drug addiction. It should at the very least be regulated. And most being is worthless from an information standpoint, so isn't providing any societal upside - a man doesn't hurt us. The world was strictly better before we had rampant gambling everywhere.
Imagine bad (incorrect and potentially harmful) information is public knowledge. Examples are "X cures cancer" or "Is Y dangerous to consume".
A prediction market will be seeded by public knowledge (of course it cures cancer or its safe to consume), which you describe "suckers". History is filled with many examples of bad public knowledge that turned out to be false (e.g. DDT is safe pesticide).
An insider (someone who knows the drug trial results, or works at the Corp creating the harmful substance) is incentivized to trade on that knowledge, which creates a better informed public (via people who pay attention to prediction markets).
Why does secret(insider) knowledge exist? To the benefit of the organization that wants to keep the knowledge secret. Insider trading laws purpose is to keep Corp and gov orgs in power. They prevent the dissemination of true information (for private power). Prediction markets incentivize the dissemination of true information, a public good.
That is the beauty of the Resolution part of prediction markets. If evil DDT Corp bets money to skew the market, then they lose even more money on the Resolution (assuming the resolution is deterministic of harm and has not been manipulated).
Oh good, the entire premise of the value of the system rests on an axiom with such giant and obvious flaws that you could drive a supertanker through it.
Does the resolution use the scientific paper that says "DDT is safe" or the one that says "DDT is unsafe"? There's no objective resolution of scientific facts.
"Prediction markets provide better information" in the exact same way that "Markets are efficient". You need to interrogate what "Better information"/"efficient" actually means even if you take the claim at face value, and also it's just not a model that maps to reality well.
The public didn’t even learn the most searched term from the market. The public had a better idea it might be “d4vd” from the market, but only slightly before they learned it for real from Google.
What I can’t figure out is why this person is being charged but the companies running the bets are not.
That’s the academic theory behind these markets, but there’s no actual value to knowing who the most searched celebrity will be or any of this other garbage. It’s just an unregulated casino with guesses about the popularity of Google searches instead of guessing black or red.
It's not being regulated as a casino (which would limit what the casino could do). It is being regulated, to a limited extent, like a commodity market (which does limit what the participants can do).
I believe Polymarket wants it to fall under the regulations of cftc as it is implemented like an option/event contract. And cftc says that they don't care about which technology is used. But as far as I now this is the first case it will be tested for real and the views of cftc and a judge may not be the same. I fail to see how it can be classified as insider trading. But, it is till fraud so I'm not sure how much it matters in the end.
How is it fraud? Wouldnt it just be a tos violation?
In my view, anyone participating in these markets does so knowing that the outcomes are within the control of other participants. I can't think of any other reason individual account activity is public.
US have wire fraud laws which I believe includes this. But it will be an interesting case to follow. Personally I don't see anything that should be a crime here at all.
It’s not rare nowadays that speculation on some topic will include the Polymarket rates. Google searches: Maybe not. Maybe that’s just gambling for the fun of it.
Couldn’t that same argument be used to justify stock market insider trading? The problem with insiders is not just that they can surface information, but they can actually manipulate the results. It’s why baseball players can’t bet on the results of their games, even if a prediction market guru might argue “their bets surface valuable information” or something.
That’s not the basis of insider trading in US securities law. US securities insider trading is premised on the idea that insiders are stealing from people they have an obligation to (the shareholders).
Sure, but let’s consider the bet the accused took: who is the most searched person in 2025. What benefit is there in knowing this ahead of time? Who is making decisions based on this?
I understand betting on something as a hedge - for example a farmer betting there will be no rain as a way to hedge the failure of his crops.
But nobodies life depends which singer is most searched (apart from maybe the singers themselves trying to have a more stable income). Surely that doesn't equate to millions of dollars though.
As opposed to the publicly available Google Trends data? As opposed to running legitimate market research? Wouldn't you rather know the most searched person in your vertical, market, etc?
The data in this example was going to be made public anyways. All the examples of prediction markets are predicated on them becoming public. You not only need the info, you need the info before it becomes public.
and that's exactly how the Google engineer made money, right? He knew it beforehand, and once it was made public other people did too
Realtime access to internal Google search data may help you predict a lot of things that might be worth money, for example there's an existing market where companies buy usage estimation for competitors products (not though Google). I don't see why so many people are completely sure this information is worthless
> For example, d4vd is a famous musician, and search stats may indicate his potential popularity and future record sales.
I wasn't really aware of that as I guess I am not the target demography. However, I can think of multiple ways of making money off this information, I still don't see why people are so sure it is worthless
Hmm, not following. The insider trade in this case was small enough to not change the lines meaningfully, no? D4vd's chances of being #1 went from <1% to >99% nearly overnight, was a huge upset.
Polymarket might be different, but conventional Vegas-style lines change with the amount of $$ bet, if the pool is $50M and an insider bets $10k on the long shot, the line isn't moving -- I don't see how insider information can be surfaced in this scenario except after the fact (and only maybe then).
In other words, if the line changes enough to signal insider info, it's not really insider info anymore.
Because these markets aren't all that efficient yet (possibly because other potential market participants are scared off by insider trading charges). You don't have multiple people that all have insider information betting against each other, you have one person with insider information that cleans out everybody else. If this repeats enough, all the people without insider information will get cleaned out and exit the market, all the other people with insider information will enter the market for profit, and prices should converge to true likelihood.
And yes, the whole purpose of prediction markets is to turn insider info into public info.
> And yes, the whole purpose of prediction markets is to turn insider info into public info.
You realize that betting on an event you have insider info on is against their terms and conditions, right? So while it may be your personal goal, it's certainly not Polymarket's or Kalshi's.
But you just said "The benefit is to people watching the prices" -- but if the odds haven't properly converged what information does watching the prices get you before-the-fact?
Maybe I'm just not getting it, could you lay out a scenario?
> if the odds haven't properly converged what information does watching the prices get you before-the-fact?
How do you know we are "before-the fact"? Because these numbers are bananas?
Somebody just tanked their job, their life, for a million bucks.
Anybody who took that bet, might've individually spent only a few bucks to see that.
Everyone else (the people watching) learned the price of entertainment is a few bucks, and ruining someone's life is a million bucks.
Was that a surprise to you? If not, then the (market) prices may be said to have converged (close to) reality.
But maybe it is, and you think people would ruin their lives for less, or would pay more for human misery. In any event, the distance between whatever you think that probability is, and the return earned on these odds is information, that we all can enjoy (as benefit) before-the-fact.
I think they are open about it. John Oliver did a piece on it last month and I recall an interview where the founder of one of these prediction markets shared this as a beneficial effect of the product.
What Polymarket says on the topic (https://integrity.polymarket.com/) is that they do not surface insider information and you mustn't trade if you have any.
Because the prediction market community is filled with liars and fraudsters, of course, it does seem to be common knowledge that this restriction isn't meant to be taken seriously, much like Polymarket's fake rule that Americans aren't allowed to use it.
But once you start from the premise that everything prediction markets say about their rules and practices is a lie, why should we believe they provide any genuine signal for anything?
The point is to make money by letting people gamble on the future. What you said is a second order effect of doing the first thing. They should at least be regulated under gambling laws, doesnt make sense without it
So far it seems insiders are mostly incentivized to bet on their insider information at the last possible minute, so that the market doesn't have time to adjust toward their position and lessen their profits. That doesn't leave non-insiders a lot of time to do anything useful with the information, even if it happens to be something that would benefit them to know about.
Cool. So we benefit by prediction markets surfacing insider information about Trump's plans in the Iran conflict, and unknown insiders making hundreds of millions on that information with massive trades minutes before each announcement benefited the people watching prices in the oil market? That doesn't seem right.
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