31–40 of 191 posts
One thing he didn't talk about was capital gains tax. If I wanted to bet on the election, I would first have to realize my short term capital gains.
"The best way to predict the future is to create it." I always thought the the problem with prediction markets is you have the incentive to make the prediction come true. And that gets ugly fast. But hell, I guess that's what all this is at the end of the day.
"The best way to predict the future is to create it." I always thought the the problem with prediction markets is you have the incentive to make the prediction come true. And that gets ugly fast. But hell, I guess that's what all this is at the end of the day.
Yep, it clearly leads into assassination markets - for example, opening a large bet that person X will die on a specific date.
One thing he didn't talk about was capital gains tax. If I wanted to bet on the election, I would first have to realize my short term capital gains.
He avoids capital gains in the article by using a MakerDAO CDP. This is a loan that is collateralized by his Ethereum holdings. (IIRC 1.5 ETH to the amount of DAI you want)
If the value of the ETH collateral that you deposited drops to less than 150% the value of the DAI you withdrew, anyone can come in and "liquidate" the vault, forcibly selling the ETH to buy back the DAI and charging you a high penalty. Hence, it's a good idea to have a high collateralization ratio in case of sudden price movements; I had over $3 worth of ETH in my CDP for every $1 that I withdrew.
There may be a broader message there about representation too: if you are sitting in a meeting and 8 people think something is going to happen, but you disagree, and they are all upper class men (for example), and you’re a lower class woman, you probably have a better than 1 in 9 chance of being right, if it’s an issue that affects the public generally. People don’t realize their views are non representative if they live in an echo chamber.
"The best way to predict the future is to create it." I always thought the the problem with prediction markets is you have the incentive to make the prediction come true. And that gets ugly fast. But hell, I guess that's what all this is at the end of the day.
That's why you have counterfactual prediction markets. You don't have markets on an outcome; you have two markets of an outcome conditional on some action, and on an outcome conditional on that action not being taken.
The conclusion is disheartening "It shows a lot about how market efficiency actually works in practice, what are the limits of it and what could be done to improve it." Yes at a small scale, but at the current rate of adoption of crypto it will not go well if it is still treated as a playground.
Earlier quoted context omitted.
Isn't that just life insurance?
That got ugly too until they prevented people from taking out life insurance on people without their knowledge/consent
See https://www.bankrate.com/insurance/life-insurance/dead-peasa... for an overview of current regulations that resulted from that.
"The best way to predict the future is to create it." I always thought the the problem with prediction markets is you have the incentive to make the prediction come true. And that gets ugly fast. But hell, I guess that's what all this is at the end of the day.
Earlier quoted context omitted.
He avoids capital gains in the article by using a MakerDAO CDP. This is a loan that is collateralized by his Ethereum holdings. (IIRC 1.5 ETH to the amount of DAI you want)
Indeed, though at 3:2 you are apparently at considerable risk of the loan being called by anyone (with no margin call beforehand): If the value of the ETH collateral that you deposited drops to less than 150% the value of the DAI you withdrew, anyone can come in and "liquidate" the vault, forcibly selling the ETH to buy back the DAI and charging you a high penalty. Hence, it's a good idea to have a high collateraliza…