Ethereum co-founder Vitalik Buterin has expressed his optimism on the use of prediction applications in the space of finance.
According to his latest article, published earlier today, on 9th November, the multifold use of prediction applications like that of Polymarket can help people make better decisions about buying coins and other features online.
Buterin Expresses Prediction Market Strength In Elections
To understand the importance of how prediction applications influence a person’s decisions, Buterin explained taking the example of this US 2024 elections. He expressed that for a lot of people, prediction markets are about placing bets on elections, which is gambling. While it’s nice if it makes people happy, it’s not really any more fascinating than purchasing random coins at the pump.enjoyable.
To put it briefly, Buterin thinks that prediction markets, even in their current form, are a very helpful tool for the world, but they are just one part of a much larger and incredibly powerful category that has the potential to improve governance, science, news, social media, and other areas.
Buterin Sees Prediction Market Providing Useful Information In Finance Sector
Buterin highlights that Polymarket has been a very good source of information about the US election over the last week. In addition to predicting Trump would win with 60/40 odds, whereas other sources predicted 50/50, which isn’t particularly impressive on its own, Polymarket also demonstrated other virtues.
But he things that election prediction is only the first app. The general idea is that one can align incentives using finance to give viewers useful information. One can learn a lot about the world by reading market prices, and different actors make different buy and sell decisions based on their thoughts about the future (as well as personal needs like risk tolerance and hedging desire).
Buterin adds that Info finance, like software engineering’s correct-by-construction concept, is a field in which one can start with a fact you wish to know and then purposefully create a market to best extract that information from market participants.
He additionally believes that AI (whether in the form of LLMs or some other future technology) is one technology that will revolutionize information finance over the next ten years.
This is due to the fact that many of the most intriguing uses of information finance are focused on “micro” issues, or millions of mini-markets for choices that, taken separately, have comparatively little impact. This will help traders manage, utilize, analyze and use their time better.