[georgehotz]

There's no such thing as "insider trading" on prediction markets. Are you telling me people with secret knowledge profited by making correct predictions? That's the whole point of prediction markets! Provide accurate information = get paid. It doesn't matter where the information came from, as long as it's correct.

[olalonde]

If you hold confidential information, using it to bet on prediction markets could arguably violate secrecy rules since the market effectively receives the information. If you are not bound by confidentiality, participating should be fine.

Note that this isn't about making the market "fair" for other participants but about ensuring confidential information remains confidential (especially relevant in the context of national defense).

[protocolture]

If they provided the information, "Hey I am bob in the pentagon and we are doing war soon", it wouldnt be insider trading.

But all they are doing is updating a financial instrument that suggests an increased likelihood, and getting massive bank for not providing the information that would make everyone else bet the same way.

[gruez]

>But all they are doing is updating a financial instrument that suggests an increased likelihood, and getting massive bank for not providing the information that would make everyone else bet the same way.

That's the incorrect way of thinking about this, at least according to how US insider trading laws work. If a hedge fund has reason to believe oil prices will spike due to some secret info (eg. they paid some intern to camp out at US airbases and spot outgoing flights), and then they made massive bank on that trade, that's not insider trading. It's not a crime to hoard material nonpublic information and trade on it (ie. "updating a financial instrument ... and getting massive bank for not providing the information that would make everyone else bet the same way"). Now, if they paid off some guy inside the base, that might be breaking a bunch of laws around national security, but still not insider trading.

[mlazos]

That’s 100% insider trading. If you use material non-public (including confidential) information to perform the trade it’s illegal. Paying someone to provide confidential info is still insider trading. Paying someone to observe planes (public information) is not insider trading. Researching using publicly available information (even though you don’t share your research) is not insider trading. The key point is the channel from which you receive the information.

[s1artibartfast]

The distinction isnt public private information. If I am a farmer and I know harvest will be poor, buying futures isnt insider information. I pay to conduct a confidential survey of farmers, that still isnt insider trading.

[HWR_14]

Of course insider trading is a US federal crime in prediction marketplaces.

[exogeny]

There’s two different things to argue here.

First, yes, you’re right.

Second, they raised a shit ton of money under the bull case of mass consumer adoption, which is going to be impossible if that said consumer feels it is rigged.

Let’s all be real here; for 95% of their use cases both now and in the future, they’re a sportsbook. Which is fine! But they’re not going to get to anywhere near returning a multiple on their manic valuation until they act like one. And the first thing to do is to stop with all of the pseudo-academic bullshit about what a prediction market is. And the second is for them to hire someone, anyone, who knows even the first thing about sports because everyone even tangentially connected to this market knows that before six months ago, Tarek and Shayne couldn’t differentiate between a football and a buttplug.

[camillomiller]

Yeah well you outlined perfectly well why they should be banned from the known universe

[watwut]

Whole point of prediction market is unregulated gambling and manoy extraction and facilitatiom for psychopats.

It is not about "accurate prediction". That is just dumb rationalization.

[bdangubic]

I bet I’ll punch you in a mouth and then I punch you in a mouth and collect a billion dollars

[georgehotz]

Who took the other side of that bet? I sure didn't. Participants in a market should be well aware that other participants can alter the outcome and bet accordingly.

[creato]

> other participants can alter the outcome and bet accordingly.

Do you think it is acceptable that someone may have altered their behavior due to the outcome of a bet on attacking Iran?

[metalcrow]

What you're describing is know as an "assassination market". To my knowledge it's considered mostly a non-issue (It's talked about in good detail here https://www.astralcodexten.com/p/prediction-market-faq?open=...), because you could do a lot of the same stuff with the normal stock market. If you have advance knowledge that Iran is gonna be attacked, it's just as easy to trade on that info there via oil or similar, with the added downside that now no one else gains extra info about if Iran will be attacked or not, and anything more hyper-specific would just be illegal to bet on for normal law reasons.

[hedora]

I didn't read the link, but you have a fundamental misunderstanding of assassination markets.

  I bet $1B that Julius Caesar will not be killed on March 13 with nightshade.
  I bet $1B that Julius Caesar will not be killed on March 13 with hemlock.
  ...
  I bet $1B that Julius Caesar will not be killed on March 15 by being stabbed to death in the back.
  ...
  I bet $1B that Julius Caesar will not be killed on March 17 with nightshade.
  I bet $1B that Julius Caesar will not be killed on March 17 with hemlock.
  ...
  1,000,000 automatically generated bets omitted.

Since there can only be one assassination of Julius Caesar, the person ordering the hit only has to pay $1B, and only if the assassination succeeds.

Sure, people can bet some cash and attempt to get a cut of the assassin's money. Traditionally, you put that cash back into the pot, so (for all but the successful event) it goes to the assassin's pockets.

The first-order issue is that the assassin needs to bet a bunch of cash to out-bet the zero-information speculators. Some Roman trillionaire could bet $100K that the assassination would happen for each slot, drowning out the cash of the actual assassin. Of course, this would cost them $100B if placing bets are free, and there are a million scenarios.

The next big problem arises if people can watch for movements on a given position in real time. The market can fix that by running the feed on, say, a 1 hour delay. So, while they're sharpening their knives at the Senate, the Roman congress-critters can each put in a bet via cell phone.

Of course, then the (totally ethical, I'm sure) people running the assassination market could siphon money off by spying on the realtime feed. This tertiary problem is solved by making sure those people are generally well-known, giving them an incentive to not piss off assassins.

[hedora]

The person that wants them to be punched in the face takes the bet, of course!

This was the primary use case for polymarkets before they were banned, and the reason they were banned.

(Well, secondary use case, and secondary reason for the ban. The first was stealing retail investors' retirement funds, and a series of financial panics that led to the Great Depression and creation of the SEC.)

[QuadmasterXLII]

If some addled gambling addict is dumb enough to take the bet, it’s their dollars and your mouth.

[bdangubic]

exactly

[NoOn3]

Maybe even someone who wants you to get punched in the face. :)

[bdangubic]

For example, In my comment replace “I” with “Trump” and replace punch with “started another war”

We can go on and on (I can give you 7 million other examples too, this is easy one), the entire prediction market is meant for idiots to give their money to non-idiots that are rigging the whole thing (without any regulation).

[collingreen]

That's roughly correct though? Like the alleged point is exactly that - provide an incentive to establish true information earlier than otherwise. If you view prediction markets like that it's only weird to see people taking the other side with no information (I was going to say "like bar bets" but that's the same kind of thing! Don't bet on things you know nothing about if you hate losing money!)

[s1artibartfast]

Yep. And it will have been predicted. What seems to be the problem?

Do you want to bet what I'll eat for dinner next?

[bdangubic]

Idiots will always bet on rigged outcomes, the “prediction” markets are living proof of that

[camillomiller]

Congrats! You provided correct information! That is apparently more valuable than anything according to a lot of deranged data nerds nowadays, so enacting violence to get to that outcome is perfectly fine! Good job!