[olefoo]

I wonder if a poll is the best forecasting device; it seems almost axiomatic that a prediction market [1] would be a superior solution.

On the other hand; I'm guessing that you might stir a bit of controversy if you were to set up a futures market where you offered people the chance to make an offer of how much they would pay for a bitcoin delivered a year from now; and others to post offers for how much they would need to be paid to _guarantee_ delivery of a bitcoin a year from now...

Just remember that it's all fun and games until the government [2] steps in.

1. http://en.wikipedia.org/wiki/Prediction_markets

2. http://www.cftc.gov/index.htm

[Houshalter]

We could use bitcoins to set up an anonymous prediction market that the government can't shut down. Oh wait.

[SwellJoe]

https://www.predictious.com

I'm not recommending it, just pointing out that it exists, and that is exactly the sort of thing people are making predictions on. I looks a little expensive to participate (fees seem high for what the site does, to me).

[olefoo]

That's awesome. People never cease to amaze.

To be clear, I was suggesting that someone setup a full-blown futures market; not a prediction market ( which is the most neutered form of a derivative market, as near as I can tell ).

If you denominated the contracts entirely in BTC it might even be legal...

And if you had some enforcement mechanism (anything from shaming to gangsters giving amateur dental work to defectors), it might even work.

The question of whether a Bitcoin futures market would be more volatile if denominated in dollars or BTC is left as an exercise for the reader.

[SwellJoe]

I've put a small amount of money into Predictious to play with it, and they resolve the problem of contracts by locking your funds when you buy into a particular prediction.

So, if you short shares, it locks up the full amount you would owe if your prediction is wrong. Going long only takes the amount of the bet (since that's all you can lose). It's kinda confusing and difficult for me to wrap my head around it, honestly, so I probably won't be doing a lot of that sort of thing.

But, it is a necessary part of the economy, I think. Having markets for all sorts of risk provides the ability to hedge against volatility. I don't think Predictious is really doing that, right now...it's sort of a thinking mans gambling site, as far as I can tell. Which is, as you note, less exciting and interesting than a proper futures and derivatives market.

But, legality is definitely up in the air. Americans can't participate in Intrade, for example, so I guess futures markets aren't legal in the US. I'm gonna guess that once Bitcoin looks like a currency to the US government there might be a stink about Predictious, too. I'm sure I'll be bored of the concept before then.

[frinxor]

a poll should NOT be a forecasting device. do not go out and buy bitcoins because people on average hit the 1000-2000 option. unless of course, you mark one of the 1000+ options independently of the results of the poll, then you should go speculate in them (hell, if you were one of the several that marked 10k+, you should buy a ton!)

imo, bitcoin is very speculative and volatile, its a crazy market and these posts don't help that fact...

[tedsanders]

If there's no cost to storing a good, then the price today is the best predictor of the price in six months. There is no difference between a market and prediction market in this case.