Would the average gambler rather place a wager against a friend — with a winner take all approach — or rely on the liquidity of a casino along with the considerable rules and regulations that comes with placing wagers with a traditional gambling property?
Answering this question means diving deep into what a predictive market is and what the advantages of such a market are. It’s also important to understand the similarities between both. After all, whether a gambler is using a cryptocurrency or blockchain project to try to earn money by predicting outcomes or they use a traditional website or casino to place a wager, the goal is the same, to put more money or Bitcoin in one’s wallet.
The twist in comparing these two options comes with the fact that many traditional betting sites like Bodog and 5Dimes now accept Bitcoin anyway. This means that the average gambler who may be knows a little bit about Bitcoin but not a ton won’t see the value in exploring predictive market platforms.
Rest assured, there are reasons to explore predictive market platforms above traditional betting properties.
Predictive Markets Might Top Traditional Gambling
First thing’s first. Predictive market platforms are cryptocurrency projects that allow individuals to place wagers on binary events against one another without the need for any third party. This is all made possible thanks to blockchain technology, which makes transferring value from one person to another without the two parties having to trust each other possible. It’s also the technology that makes it secure.
There are several predictive market platforms available to the public right now (and the list below does not include all of them):
- Bitcoin Hivemind
Predictive Markets are Decentralized
Betting with Bitcoin on a site like Bodog and placing a bet on a predictive market blockchain platform like Augur or Gnosis is not the same thing, even if the player is using Bitcoin on Bodog.com. Both options benefit players because there is no need to pay fees to third party payment providers and blockchain technology can be used to provide provably fair play and also to reduce the cost of depositing, placing wagers and withdrawing funds.
However, in the case of using a traditional gambling site like Bodog, the house still maintains an edge. Likely the same as the player would be giving up at a traditional brick-and-mortar casino. After all, centralized businesses like Bodog (and for that matter any other business in the world) exist to make a profit. To capitalize on the small percentages and fees that govern the world of both odds making and financial transactions.
Predictive markets on the other hand take it back to the old school. These platforms allow users to settle bets based on binary events. In other words, events that have only two possible outcomes. An example could be whether or not whether or not Amazon will start accepting Bitcoin by 2021. Or it could be something as simple as picking the winner of this year’s Super Bowl.
In a predictive market, the parties involved only take bets where they feel the odds are agreeable. If only one person takes a bet, there is no bet. This means that the efficiencies of a given market are still at play, which means any given wager is still fair. If it’s not fair it simply doesn’t happen. But the real advantage to using a predictive market is that nobody is paying a percentage to the house. Only the gamblers involved stand to win or lose all the money, with the exception of a very small if not minuscule transaction fee that gets paid out to maintain the participants that secure the blockchain.
Are Predictive Markets the Future of Gambling?
As usual, newer technologies are harder to understand and involve quite a learning curve. In order for predictive markets to become the future of gambling, Bitcoin likely needs to go through a much larger wave of adoption. That may or may not happen in the very near future. But the fact is, gambling is almost as old as time itself. It’s believed that the first playing cards were invented and distributed all the way in back ninth-century China.
Even well after that when brick-and-mortar casinos first arrived on the scene in North America, it was much easier for the average gambler to win because the house wasn’t always taking an edge. In other words the idea of two players competing against each other for all the spoils with no third party taking a cut isn’t new. Predictive market projects like the ones listed above will serve to prove that again. They won’t just prove that gambling is indeed one of the biggest use cases for Bitcoin. They’ll prove that history repeats itself again and again. That’s something anybody can bet on whether they use Bitcoin to make the bet or not.