It’s fun to talk about athletes, musicians, and cultural figures in financial terms. “His stock is low right now” or “he’s overrated.”
It makes for fun conversation, but what if you could buy low and sell high in reality and not just in the barber shop? What if you could put money on it. With cryptocurrency and decentralized prediction markets, you will be able to.
Betting on Everything
Up to now government regulation of gambling has kept betting to a limited scope. Sports mostly but occasional prop bets in politics and entertainment. This regulation appears at first glance to be a small annoyance, preventing some fun from being had, but it actually deeply harms the transmission of information through society.
Take music for example. Discovery of new artists is still driven largely by word of mouth. You likely have friends that have more musicians on their radar who help you discover new bands. These cultural influencers do this because they enjoy it. There is a pleasure that comes from being the one who knows about a great musician before they blow up. But what if there was a financial incentive for cultural discovery functions?
Take a rising artist. Right now Latin Trap is growing in popularity and at the head of it is a Puerto Rican rapper Bad Bunny. As a native English speaker, most people I know in Canada and the US, haven’t heard of him, but in the next two years, I’m almost certain you will.
What if I could make a bet that Bad Bunny will be a top 50 streaming artist on Spotify in 2018? What if everyone could bet on it?
This market would give us an opportunity to have fun and make money, but it would also be a great source of music discovery.
Instead of relying on friends or shitty click bait online magazine prediction lists, where there is no incentive to be right. You would see predictions from people who are confident enough to put money on it. You could check the market, see who has large bets to become popular in 2018, 2019, etc and check out their music.
Because the information you are getting is a consensus among people with skin in the game they have a much higher incentive to think deeply and the accumulated result is better information.
This isn’t a new insight–it’s well known that gambling markets are much more accurate than polls in elections around the world– but people underestimate how powerful the knowledge generated by prediction markets would be to society.
Beyond music, movie, and cultural recommendations we would find out a lot about what “society” actually thinks. Instead of low-cost virtue signaling, you would be able to find out what the consensus is for people that are actually willing to put money down.
Whether it is top streaming artists, global temperature changes, election results, or millions of other things it would create a larger incentive to be correct and improve the information we have to live our lives.