Prediction markets are ushering in a world in which news becomes about gambling • Hacker News Board

Re: Prediction markets are ushering in a world in which news becomes about gambling

#241

Post by gpm » Mon, Jan 19, 2026, 4:31 PM UTC

latency-guy2 wrote: post #204

gpm wrote: post #192

Earlier quoted context omitted.

You're asking why someone hiring a hitman would be willing to part with their money? Because that's what money is for, to purchase things, like hitmen (apparently).

OK so its much a shallower thought than I anticipated. Why go through the "prediction market" at all then? The hitman still killed someone, payments are not anonymous in this market, and its certainly not clean. Further, you share the pot with however many are involved, proportional to the allotted bets on each side and presuming binary prediction. And if the winds change on the market for the bet proportional to the…

> Why go through the "prediction market" at all then

It's there. It's not actually easy to find hitman for hire. This is a publicly advertised market for it.

Plausible deniability. We weren't paying for the witness to be murdered, we were expressing our confidence that no one would murder the witness.

Price discovery. The market tells you how much you need to pay a hitman (if you overpay hedge funds swoop in and take the difference, telling you for next time. If the hedge funds underestimate the cost they end up paying a significant penalty to the people who they prevented from hiring a hitman).

Crowd funding. The market means that every can chip in however much they want towards paying the hitman, and they only end up paying if its enough. In fact the middlemen who accepted the bets in the meantime may promise to pay some small amount of damages if enough isn't collected.

It is impossible to stiff the hitman, and there is no risk for the hitman that the "winds change". The hitman takes out the entire "yes" position before committing the murder. If it's not enough, they don't commit the murder.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#242

Post by bshaughn » Mon, Jan 19, 2026, 4:54 PM UTC

scoofy wrote: post #199

b65e8bee43c2ed0 wrote: post #51

Earlier quoted context omitted.

>It gives people in power, wether it be the government or even an NBA ref, a vehicle to profit off of conflicts of interest / fixing games / etc... there is the stock market for those things, where insider trading is nigh invisible to public.

> where insider trading is nigh invisible to public ...and is illegal. It's not illegal to throw a basketball game.

Yes it is, this happened before almost 20 years ago and the NBA ref went to jail. Yet somehow the whitehouse insider trading is. Did you know someone took out a $300M BTC Short position right before a trump tarriff announcement in October?

Re: Prediction markets are ushering in a world in which news becomes about gambling

#243

Post by smeej » Mon, Jan 19, 2026, 4:59 PM UTC

gpm wrote: post #136

smeej wrote: post #127

> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout.…

If the prediction market is for a non-trivial amount, it's likely someone is going to kill you in exchange for the money the prediction market offered them . The prediction market isn't acting as a prophet here, it's acting as a plausibly deniable murder for hire service and you are its victim. The people "betting against" you dying just paid to have you killed.

It's not a bounty, though, right? It operates like other trading markets? So unless they have big money to wager, they don't have big money to gain. If it's hovering at, say, 10% odds, it's not like they can automatically 10x their money because other people have to take the opposite side. There would have to be a lot of liquidity in the market for their large bet not to move the odds, and as the odds move, they make less money.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#244

Post by smeej » Mon, Jan 19, 2026, 5:04 PM UTC

kajaktum wrote: post #158

smeej wrote: post #127

> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout.…

> I'm trying to understand what the criticism is here, because the example seems to support the point that these are meant to be a way of learning the future, not oppose it. I thought the whole point was that yes, people with inside knowledge will bet large sums of money on things they expect to happen, and that's what makes the prediction useful. The market is meant to incentivize people who know things to act on th…

Yes, but it spikes BEFORE the attack begins, which means we learnt someone thought there was a string reason to believe things were about to change earlier than we otherwise would have.

That's the whole point, isn't it?

And if you're going to tell me the paragraph I quoted nullifies what I've said, would you please explain how? Obviously I don't currently understand it the same way you do, and I have asked for help understanding what I'm missing. Saying, "You're missing it," isn't helpful.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#245

Post by smeej » Mon, Jan 19, 2026, 5:06 PM UTC

perfmode wrote: post #145

smeej wrote: post #127

> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout.…

The missing piece is the distinction between a market that observes reality and a market that instigates it. The criticism is about the systemic risk of converting prediction markets into "Assassination Markets"—mechanisms where the payout is not a reward for foresight, but a bounty for action. In the case of Maduro, the operation cost around $300 million so a $400,000 payout isn’t providing a financial incentive. Bu…

But it's not a bounty. It's a market, right? So the payout is split among everyone on your side? And the if you try to dump a ton (measured relative to the size of the market) into the market, the price tanks because there aren't enough people coming in on the other side. You get a big wick in the trading candle, so you scoop up the much less favorable terms of the bet at higher cost.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#246

Post by gpm » Mon, Jan 19, 2026, 5:12 PM UTC

smeej wrote: post #243

gpm wrote: post #136

Earlier quoted context omitted.

If the prediction market is for a non-trivial amount, it's likely someone is going to kill you in exchange for the money the prediction market offered them . The prediction market isn't acting as a prophet here, it's acting as a plausibly deniable murder for hire service and you are its victim. The people "betting against" you dying just paid to have you killed.

It's not a bounty, though, right? It operates like other trading markets? So unless they have big money to wager, they don't have big money to gain. If it's hovering at, say, 10% odds, it's not like they can automatically 10x their money because other people have to take the opposite side. There would have to be a lot of liquidity in the market for their large bet not to move the odds, and as the odds move, they make…

> So unless they have big money to wager, they don't have big money to gain.

It requires that they put down collateral (the purchase of the the yes bets) that they lose if they don't meet the contract, so they do have to have starting capital.

> because other people have to take the opposite side.

That is to say that there must be people offering the bounty.

The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.

> and as the odds move, they make less money.

They have to put up more collateral for the remainder of the contract if they want that upside - but they make all the money that they already put up collateral for.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#247

Post by hackable_sand » Mon, Jan 19, 2026, 6:15 PM UTC

porksoda wrote: post #201

hackable_sand wrote: post #197

Earlier quoted context omitted.

It appears you are missing any cursory philosophy, ethics, logic, etc. courses.

Me too, and I wish you would have answered the clear request for enlightenment instead of pointing out the obvious fact that we weren't in your class.

Then pay me and I'll enlighten you.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#248

Post by scoofy » Mon, Jan 19, 2026, 7:27 PM UTC

bshaughn wrote: post #242

scoofy wrote: post #199

Earlier quoted context omitted.

> where insider trading is nigh invisible to public ...and is illegal. It's not illegal to throw a basketball game.

Yes it is, this happened before almost 20 years ago and the NBA ref went to jail. Yet somehow the whitehouse insider trading is. Did you know someone took out a $300M BTC Short position right before a trump tarriff announcement in October?

Hmm yes. I certainly hope they would both be illegal.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#249

Post by smeej » Mon, Jan 19, 2026, 8:15 PM UTC

gpm wrote: post #246

smeej wrote: post #243

Earlier quoted context omitted.

It's not a bounty, though, right? It operates like other trading markets? So unless they have big money to wager, they don't have big money to gain. If it's hovering at, say, 10% odds, it's not like they can automatically 10x their money because other people have to take the opposite side. There would have to be a lot of liquidity in the market for their large bet not to move the odds, and as the odds move, they make…

> So unless they have big money to wager, they don't have big money to gain. It requires that they put down collateral (the purchase of the the yes bets) that they lose if they don't meet the contract, so they do have to have starting capital. > because other people have to take the opposite side. That is to say that there must be people offering the bounty. The size of the bounty isn't defined by the price of the co…

> The size of the bounty isn't defined by the price of the contract, but the total upside available in the order book.

But one person doesn't get the whole thing. ALL the people holding that side of the contract split the payout, in proportion to the size of their holdings in that side of the market.

I think if I use hypothetical numbers, it will help me explain how I think it works, and maybe this will help someone figure out where my error is.

Let's imagine the market is about whether I will die by the end of the day. So far, there are $500,000 in total bets in the market, and there are 5,000 shares in this market. Let's say it's currently sitting at only 10% odds that I'm going to die. I think that means 4,500 shares, or $450,000, is on the "No" side and 500 shares, or $50,000 is on the "Yes" side. Do I have that right so far?

If nothing changes about the market and I'm still alive at the end of the day, everyone who holds a "No" share splits the $500,000 pot, correct? There are 4,500 of them, so they each get $111.11 per share.

But suppose someone has a solid plan to kill me by the end of the day. They decide they want to dump $50,000 in on the "Yes" side. That's not going to buy them 500 shares, because they would need someone willing to sell 500 shares at the current price. They'll actually get well under 500 shares, and probably not even half that many, and they'll still be splitting the pot among the other people who already have the 500 shares on the "Yes" side. So they're still at not even half the "Yes" side of the market. They can probably double or triple their money, but we're talking about making another $50-100k on top of getting their own $50k back. It's not like they get the whole $500k.

That's what I mean when I say it's "not a bounty." A "bounty" makes it sound like, "If you're the one who kills smeej, you get $500k," but that's not what's happening here.

Lots of people might be willing to try to kill me for $500k. A heck of a lot fewer are going to be willing to try to kill me for 2-3x whatever capital they can come up with right before the hit.

Am I at least understanding this part of it correctly, how the payouts actually work? If I'm not, that would go a long way toward helping me figure out what I'm missing.

Re: Prediction markets are ushering in a world in which news becomes about gambling

#250

Post by smeej » Mon, Jan 19, 2026, 8:19 PM UTC

hackable_sand wrote: post #197

smeej wrote: post #127

> The irony of prediction markets is that they are supposed to be a more trustworthy way of gleaning the future than internet clickbait and half-baked punditry, but they risk shredding whatever shared trust we still have left. The suspiciously well-timed bets that one Polymarket user placed right before the capture of Nicolás Maduro may have been just a stroke of phenomenal luck that netted a roughly $400,000 payout.…

It appears you are missing any cursory philosophy, ethics, logic, etc. courses.

Ironically, I actually have a philosophy degree. If I'm still missing the point, I really don't think it's because I haven't learned how to think.

All I can really do in this case is ask for explanation. If you're enough higher and mightier than I am that you don't care to give me one, that's fine. You don't have to. It's just kind of...unnecessarily condescending to rub my face in it without even trying?