Rising cryptocurrency trends and improved blockchain technology are creating new opportunities for financial gain in many different ways. The lasted popular method to gain reward from the growing blockchain and volatile markets are the Prediction market.
Prediction markets provide people the opportunity to buy and sell event contracts with the sole purpose to make a non-financial reward. Although no real profit is made, the Prediction market is the best way to gain market knowledge since the predictions are considered the most accurate ways to predict future events.
Prediction markets are becoming more popular thanks to the blockchain technology improving each day that goes by. Although the prediction markets are gaining favoritism amongst new investors, the market is also facing threats. Because of the reward and risk standing at 50/50 for a win or lose the Prediction market has been frequently associated with gambling due to the similarities.
Representing the world of finance and information technology, Fintech is one of the parties behind the gambling claim. In 2012 a civil suit was even filed against the Irish prediction market by The United States government when the Irish prediction market started to draw in U.S citizens to take part in this unorthodox method of trading. This was still when commodities like gold and crude oil were the go-to for investors and traders. However, with something like Bitcoin which is anonymous by nature, there are no reporting requirements.
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So why continue to move forward with prediction markets through blockchain technology? Prediction markets are as mentioned the best way to generate knowledge and to help make information and data available for investors. And since prediction markets have been implemented on the blockchain a lot of advantages have surfaced.
Because the blockchain system is decentralized the outcome of events are always honest and with the blockchain system, a user’s predictions are recorded in order to gather information to know how accurate a user’s predictions are. Also when you combine prediction markets and the blockchain you also eliminate entry barriers and betting limits completely.
In the past, a great number of prediction markets were shut down for various reasons, but now that the prediction market runs on blockchain technology the market is also decentralized meaning that it can never be shut down. This is a true benefit from using no centralized databases. If the blockchain is running ethereum smart contracts as well then predictions can be made while payments are being collected. The entire process is automated so once the event outcome has been made known the users will immediately be informed.
The implementing of prediction markets onto blockchain technology is allowing more people to engage in predicting event outcomes. In the past predictions were left to only a hand full of experts and now the prediction market consists of an entire community. It’s understandable that thanks to blockchain technology prediction markets will draw in more traders and investors because investing or trading decisions will be easier knowing that hundreds of people have predicted the outcome already.
And not like 2012 when the commodity prediction market led to terrorist attack predictions and assassination on public figures predictions, the prediction markets running on blockchain technology are heading towards a positive outcome. However, the subject is still being opposed by a number of people who have financial say so debates concerning prediction markets are to be expected.