The Value of Speculation: Prediction Markets Explained

Speaker 3
And by the way, on the earlier example, when we talk about a lot, the obvious examples where it plays out is like the Carlotta Perez framework of like speculation phase followed by an installation phase as like a driver of technology cycles. There's also the example, Bern Hobart wrote a piece for me a few years ago on how bubbles are actually a good thing when they have a certain type of quality in this And he also wrote a new book about it recently for Stripe Press with Tobias Huber, which they go into greater detail about that. Oh, I should read that. It's basically an example of quote, I don't want to put moralistic terms on it necessarily, but useful speculation that kind of leads to other things as an outcome versus speculating for the sake of speculating, which is partly the distinction you're pointing out. Well,
Speaker 2
I think people, you know, in Las Vegas who are at the slot machines, they're gambling because they have no way of influencing or of improving their predictions of what the slot machine is going to show up, right? It's just pure random chance. On the other hand, there are many, many areas in which we are trying to predict the future and in which investing can help us improve our predictions. And this is why I think prediction markets should be completely legal, should be legalized, because of all the forms of gambling, of all the forms of speculation, this is one of the most useful forms. So we want to incentivize the type of speculation or gambling, which as a side product produces, you know, these useful public goods, which is trying to predict the future. This is incredibly important. You think about all of the questions that we have, you know, what is happening with climate change? Which of these scientific predictions are accurate? Who is the best candidate for the presidency? All of these questions we have, prediction markets can help us answer these questions in a way which is more objective, more accurate, and more open to everyone. So I think the case for legalizing these is very, very strong.
Speaker 3
That's amazing. I'm going to give you the last word on that, Alex. You guys, thank you so much for joining this episode. That was so fun. Thanks, Anel. Thanks, Scott. It's been fantastic being here. Thanks
Speaker 1
so much. Really fun conversation and QED. Bye,
Speaker 3
QED. Thank you for listening to Web3 with A6NZ. You can find show notes with links to resources, books, or papers discussed, transcripts, and more at A6NZCrypto.com. This episode was produced and edited by Sonal Choksi. That's me. The episode was technically edited by our audio editor, Justin Golden. Credit also to Moonshot Design for the Art and all thanks to support from a6nc crypto to follow more of our work and get updates resources from us and from others be sure to subscribe to our web 3 weekly newsletter you can find it on our website at a6nccrypto.com thank you for listening and for subscribing let's go

Prediction Markets and Beyond

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