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Comment by sam0x17 | Hacker News Reader

I really wonder whether privacy would actually be the answer here --- prediction markets as they are now where the odds are public really shouldn't be called prediction markets, they should be called "outcome-shaping markets" because largely that is what they do, they let people shape real-world outcomes with massive amounts of liquidity. If instead these were privacy protocols where you can see how much liquidity is on a specific market, but no one can decrypt how much liquidity is on each side until the outcome executes (i.e. using threshold encryption, commit reveal, etc), you'd have a very different situation where your ability to predict in advance is what gets rewarded and there is no ability to "copy trade"

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>outcome shaping markets

I heard something remarkable many years ago, that there are websites on the dark web where you can bet on which day someone is going to die. In other words you can pay to have them assassinated in a very indirect way. It's like kickstarter, for assassinations.

When enough funds are raised, a willing volunteer simply places a bet on the day when they plan to carry out the deed. So they win the bet by default.

Obviously this is a horrible use case, and I'm not sure if such websites actually exist or are just rumors. But I have to wonder about the model itself.

I often thought about an inverse Kickstarter. Where you post an idea, people fundraise the idea, so the idea itself is validated. And then worthy contenders step forth to build it. (I guess donors could vote on who ends up getting the money to actually build it, or if there's enough they could even get divided between them for prototypes.)

For example, there seems to be a lot of interest in e-ink laptops, and a successor to flash. People have been complaining for decades, but not much gets built. How much interest is there? Well we can measure that objectively! You vote with your wallet.

Right now, it's a "pull" system. You have to hope and wait for a small number of highly motivated people. You have to hope they will launch something you're interested in. But what if you could push?

I think we could do a lot more proactiveness on the crowd side of things. As a recent article here mentioned... people actually do know what they want.

And of course this idea isn't just limited to products and services. I think there's a lot of potential for this idea in government as well.

You are describing:

https://en.wikipedia.org/wiki/Assassination_market

Not acknowledging a problem doesn't make it go away. Isolating people decreases the problem, but alienates them from the wider economy. I'd rather live in a world with open, regulated [0] , assassination markets even if that increases the amount of money behind assassinations.

Of course I'd rather live in a world with no muder and death, but seriously, grow up.

[0]the value of a human life is $xM + $yM for their occupations, so now payout for hits below that amount

Kickstarter exists. The real problem is most things cost more than the average person should dare risk. Some widget today is worth more than the same tommorow. Most people should not back your eink laptop even though if it existed they would pay more for it.

Yeah it's about trust and risk.

I'm not sure how to align the incentives on that.

For the consumer the ideal case is that the money is not released from the escrow until their product actually arrives.

But that would be overly restrictive, and limit development to companies with significant funds.

Kickstarter has a balance where, you only pledge money after deciding you trust the company.

I think we could do it so the initial fundraiser is provisional. And then everyone would know that some portion of that would fall through. Over time you would learn what the ratio is. If a million is pledged, maybe you can expect 200k to be committed in the final round.

We could even divide it further. There is some portion of users which are more open-minded and enthusiastic. They might be happy to fund a round of crappy prototypes. So in this way smaller players could gain trust and credibility.

> Obviously this is a horrible use case, and I'm not sure if such websites actually exist or are just rumors.

polymarket has an @died tag, which I assume is for betting on people's deaths (I never used the site, and it's currently inaccessible) given apparently someone recently made half a mil betting on Khamenei's death, and a cool billion was traded on bets on the timing of the bombing of iran https://www.npr.org/2026/03/01/nx-s1-5731568/polymarket-trad...

> and a cool billion was traded on bets on the timing of the bombing of iran

Oh, trump made some money?

nit: The article you linked says half a billion, not a billion.

Death markets are banned in the US. Personally, I tend to think of this as a crypto problem, not a prediction market problem.

It's also fundamentally something you can't really do properly in crypto. You need a central authority to decide if "thing has happened". There's no way to properly incentivize accuracy in cases where the majority of stake benefits from an inaccuracy.

I actually really like that inverse Kickstarter idea, makes a lot of sense especially if you did some kind of enter some pain/problem, search through existing idea markets and you can throw money towards ideas that would solve whatever pain point you have. Builders would essentially just have a market of validated ideas and could submit a ‘bid’ before a set deadline and the finders would vote on which is best then the funds would resolve to whatever builder made the best product.

> But what if you could push?

There are a number of so-called "bounty" programs like this for software, I don't know how well any of them work.

If I put a tontine on the blockchain does that make it legal?

That wouldn’t solve the issue in the article. The gamblers threatening the journalist know how much money they individually gambled on an outcome, which means they know how much they stand to lose if they cannot pressure a source to alter reporting in their favor.

Yeah. It seems like one of these two things is true:

Case 1. sam0x17 has read TFA carefully and he is proposing, without spelling it out very well, that the oracle should point at anonymous deciders instead of at vetted outlets with well-known reporters. This is the charitable case, but it seems unlikely, and it carries its own problems.

Case 2. sam0x17 goes through his life wielding a giant hammer called "privacy", which he swings about wildly without ever feeling the need to look very closely at any given nail. In fact, he'll even shout "privacy" in the face of a situation where privacy *is the problem*. Goons are hiding behind privacy to threaten a reporter and his family? Let's give them more privacy, that'll fix it!

HN can be very predictable sometimes, but hey, at least nobody ITT has suggested Rust yet.

You didn't even read my message. At no point do I say the oracle target should be private, that would be ridiculous. Public oracle, private markets on both sides of the issue, until the issue is considered closed, at which point we get to decrypt and find out who betted yes and who betted no. Liquidity would still be public, so you know how much money, but you get no intelligence signal, so world events don't get shaped by the market.

Yes, I read your message.

> At no point do I say the oracle target should be private

Yeah, that's why I said that Case 1 (the one where you actually read TFA) was unlikely. I included it out of charity, because it was the only way I could eke out something remotely relevant to the article from your original comment.

Instead, your original said stuff like:

> they let people shape real-world outcomes with massive amounts of liquidity

> no one can decrypt how much liquidity is on each side

> where your ability to predict in advance is what gets rewarded and there is no ability to "copy trade"

These things are not at issue in TFA. You are talking about completely different news stories. So now, we're in Case 2, the more likely case, where your comment has nothing to do with the news story under discussion, and you're just injecting your irrelevant fixation.

In case you didn't notice, I was replying to a commenter who exposed your irrelevance:

"The gamblers threatening the journalist know how much money they individually gambled on an outcome, which means they know how much they stand to lose if they cannot pressure a source to alter reporting in their favor."

Did you read... his comment? My comment? TFA?

> because it was the only way I could eke out something remotely relevant to the article from your original comment.

Remotely relevant? It's not like I'm talking about cats, I'm talking about prediction markets, which is the topic of the article. You would have to be extremely uncharitable to not see a holistic discussion about other problems prediction markets face and possible solutions to those problems as relevant. These topics very seldom come up on HN so a mere mention of prediction markets can and should be a very good excuse to have many side threads on the topic that have been waiting to happen.

Hmm, okay, I can see that. I guess I wasn't paying much attention to the frequency of prediction markets articles on here. From that perspective, I see where you're coming from. I was miffed by the "here" in your "I really wonder whether privacy would actually be the answer here", because I assumed it meant the story under discussion, but I suppose it's a fine comment if we think of this page as a general discussion of the industry.

As to your exact proposal, I do have some criticism (less hostile this time). I don't think it would be easy to get people to do trades when they can't see the price. It's not enough to just ask everybody for limit orders, and then only pair off the ones that cross, because you're asking people to tie up capital on a trade they don't even know the price of.

Basically, somebody does a trade on a prediction market not because he believes he knows the probability, but because he believe he knows it better than the market.

Is there a way in your proposal to get around this limitation?

Problem intrinsic to gambling is that people appropriate expected winnings instead of what they really put in, thus making the feeling of loss even greater than what it objectively is.

The problem in the article is sort of boring, this is nothing new, centralized authorities who run prediction markets have been doing a terrible job at wording the predictions and then people get pissed when those poorly written words are put through a forcing function. Incompetence is boring.

This doesn't make any sense…

If you want to bet on a binary outcome without knowing how much other participants are betting on the 2 possible outcomes, that's a bookie, not a prediction market.

The entire rationale for claiming that prediction markets "aren't just gambling" and have a legitimate social value is that they surface sentiment and valuation in a transparent and credible way.

(And that's even before we get to the fact that any kind of betting dependent on journalistic work could incentivize outcomes like the death threats reported here.)

You're still making a prediction, it's just much less likely to affect the outcome

I personally think that entire social value rationale is actually what makes prediction markets dangerous / socially bad

Seeing the total liquidity, fine, seeing the odds in real time, really really bad, will shape real-world outcomes vs if the market didn't exist once liquidity is high enough

> but no one can decrypt how much liquidity is on each side until the outcome executes

This would remove the supposed purpose of prediction markets, where you can get information about the probability of an event based on how much people are betting on it.

I mean the real purpose is to make money on intelligence-based bets. And what's great is after the fact when everything decrypts you would still get to see the exact timeline of sentiment as it changes, completely undisturbed by the market's existence. This is extremely good data for designing systems to make the correct prediction next time based on things happening in the real world, instead of following the herd and looking for tea leaves in the odds graph. It's the only way to get pure, dollar-weighted sentiment data without the market skewing itself.

Speaking of privacy, there's a cost to fame and notoriety in societies in which these systems exist. imho markets like this, taken to their extremes, incentivize small local communities, local governance, and very effective communication across boundaries between communities, since they have an event horizon that means individuals needn't be known outside -- where you never want to be known too much as an individual outside your circle of community.

I'm not sure that sounds like such a bad world tbh. I just don't like how it gets there

Should be the opposite IMO. I don't think anonymity should exist on websites that are publicly accessible.

If people want to start forming their own meshnets over wifi or LoRA or whatever and remain anonymous, then all the power to them - because those kind of people are the exact opposite of the type of people who make death threats to journalists.

Surely I am misreading what you mean here. But your comment very much reads like you think "Iran strikes Israel on March 10" at 25% odds is what in fact caused Iran to strike Israel on March 10. I'll search the space of other interpretations in the mean time, but if you could help me out here and clarify…

I'm not even talking about the specific situation. The problem with prediction markets that has been talked about for months is the predictions themselves are being used as an indicator that "thing will happen" and eventually there is so much liquidity on certain markets that the market determines the outcome not the other way around

Do you have an example of polymarket betters changing the outcome of an event?

many many, like that stuff with the "will someone throw something at X basketball game" and then someone kept doing it, etc

Here's one:

https://www.zerohedge.com/crypto/coinbase-ceos-bizarre-final...

I'm not parent commenter, but any example of an event that actually matters?

Elections, wars, the economy, healthcare systems, laws, court cases?

The example you provided does look like some insider trading type of stuff, just like how 1v1 professional sports players will sometimes intentionally lose after receiving a bribe to do so, but both your example and sports don't really seem to have any kind of meaningful impact on anything or anyone who isn't gambling, no?

I don't know. I imagine if someone was going to adjust the timing or targets of strikes in a war in response to a prediction market bet, or the decisions of a high-profile court case etc, they wouldn't say so in public the way the CEO of Coinbase did on that earnings call. It's pretty rare that someone would actually claim they're taking an action specifically with the purpose of altering the outcome of the prediction market bet, rather than giving some other reason. So even if it were happening, the only evidence I might expect to find would be suspicious prediction-market trades around low-probability events.

In situations like this, where you wouldn't expect to see evidence of something even if it were happening, you're basically left to make a judgement based on prior probability. So here that would come down to: is the financial incentive provided by the prediction market high enough relative to the decisionmaker's perceived risk and penalty of being caught? IMO, the answer is currently 'no' for most high-profile cases, but in a future where more money is riding on the bets, or where decisionmakers are insulated from consequences, that could swing to 'yes'.

The decision-makers don't need change their decision whatsoever to corruptly profit from it, though, they can just place bets on the timeframe or outcome of whatever decision they originally intended to make. Why risk operational disruptions and a greater chance of getting caught when you can still profit exorbitantly from insider trading on your knowledge without incurring those unnecessary risks?

> I'm not parent commenter, but any example of an event that actually matters? Elections, wars, the economy, healthcare systems, laws, court cases?

I think the point is more that if it's already happening at this level of adoption, and these are only the ones we know about, surely there are many more where this is happening and we don't know, and as adoption increases, it will get worse and worse since the liquidity on the line will be much higher.

How can we possibly find an example, if the names of the betters aren't public? There are public bets on activities from the IS government that can easily be used by people that control the outcome.

https://www.bbc.com/news/articles/cjwz8051y0lo

https://www.bbc.com/news/articles/cx2gn93292do

Not Polymatket, but there's a humorous case of the Sutton FC goalkeeper eating a pork pie on TV, thus resolving a bet on whether he would do so.

> But your comment very much reads like you think "Iran strikes Israel on March 10" at 25% odds is what in fact caused Iran to strike Israel on March 10

I don't know how you extrapolated that from the parent's comment. It literally said nothing about the cause and effect of this particular event.

Knowing the odds in a prediction market IS a big part of the problem brought up in the linked article though (and the bets themselves). Knowing how much can be made from being right creates an upper-bound on what a financially-rational malicious actor will spend in trying to change the outcome.

Their comment proposed something that would "be the answer here".

What does "here" mean? It's logical to expect "here" to refer to a scenario that includes cases like the one in the article. If it's some scenario that excludes cases like the one in the article, then it's not actually relevant to the discussion.

(Tangents are OK. It's just confusing if they're introduced with phrasing that makes them sound like they're not tangents.)

"here" in that comment is not referring to any specific scenario. It is referring to the problem discussed in the sentence immediately following it, that public prediction markets can shape the outcome of the events they are predicting.

>how you extrapolated that

I wasn't extrapolating - it was the literal meaning of the words. The context was that someone commented "shouldn't be called prediction markets, they should be called outcome-shaping markets" in direct reply to "Polymarket gamblers threaten to kill me over…[the prediction market "Iran strikes Israel on March 10"]. I interpret that as polymarket gamblers outcome-shaped Iran striking Israel. It was at 25% odds when they struck. I don't think the commenter actually meant that literally, which is why I asked them to clarify. I'm just doing my best here.

Maybe not directly so clearly, but there is some influence factor for sure. For example we see this with sports betting, at the far end of the spectrum it is literally players or coaches fixing games to satisfy bets. But somewhere in between that overt fraud, there is influence making going on. Submarine stories on ESPN or sports blogs highlighting a players bad shoulder, hurting their perceived value going into a free agency period.

This applies to governance as well. Note how there was a bet placed on polymarket on maduros capture mere hours before the raid were conducted, and this has lead to legislation moving forward in effort to combat suspicious prediction market activity based on whitehouse insider knowledge.

https://ritchietorres.house.gov/posts/in-response-to-suspici...

I was confused as well: After further consideration, I realized that Polymarket only resolves on actual event outcomes insofar as mainstream journalism accurately and credibly reports on those events and their resolution criteria rely on those reports. When it's easier or more reliable to influence reporting around outcomes than the outcomes themselves, bettors will seek to influence the behavior of reporters rather than the behavior of eg. national militaries.

"Iran strikes Israel on March 10" is a difficult outcome to force one way or the other. But "The Times of Israel’s military correspondent or other credible sources reports that Iran strikes Israel on March 10" merely requires intimidating or bribing one journalist. The existence of the bet didn't cause the missile strike or the failed interception. But it did cause a significant, heavily motivated dis-information campaign from people who stood to lose a lot of money.

In a similar way, people fear that prediction markets estimating times of death are equivalent to assassination markets. But murder is an aggressively prosecuted serious crime. It seems that it would be far easier and lower risk to bribe, coerce, pretend to be, or literally be a reporter who got a false obituary published - wait until the "victim" is going to be offline for a few days and can't be contacted to prove they're not dead, trick some tropical country's coast guard into confirming that the victim's yacht exploded offshore, point Polymarket at the obituaries, grab all the crypto, and disappear. If you fail to disappear successfully, your worst crime is publishing a fictional news article/bribing/threatening a journalist. You don't have to risk being in the legal jurisdiction of the victim and getting your hands bloody, you don't even have to be in the same hemisphere: you only need convince the prediction market resolution criteria that something happened.

Scott Alexander wrote about a related issue last month in the colorfully named section [1] "Annals of the Rulescucks", where he described a half dozen scenarios where the outcome may or may not have diverged from the actual event. A bet isn't resolved by eyewitnesses, it's resolved over the Internet through another financial instrument.

[1]: https://www.astralcodexten.com/i/184065379/annals-of-the-rul...

I guess the next step in this evolution is to set up controlled news sources. You get people who have an official press card to report on things as you need as part of the reporting manipulation business.

"Hey there's this newspaper that says this obscure thing happened, please resolve the bet in my favour"

> you only need convince the prediction market resolution criteria that something happened.

You don't even need the market to actually resolve, as soon as your rumor becomes credible the market pricing will adjust and you can just sell your shares before resolution.

That's superb. A very good literature story could be written based on that.

Why would anybody make a bet if they don't know the odds or payout?

A lot of people habitually make bets out of addiction without thinking carefully about the expected payoff.

Slot machines are popular for a reason. Most folks playing them don’t know or care about the odds.

One reason could be to correct uncalibrated markets. This only works if your intuition is better than the market's current intuition. If a big whale with a big idea makes a big splash, you can profit off of the instability by gently betting against them. This doesn't require you to have any particular knowledge.

That's how pari mutuel betting works; the odds are set by the bettors betting and unknown until the book closes.

That's in fact the entire argument behind Kalshi: the betting is the means of odds discovery.

I assume a lot of people don't know the fundamental odds of something happening but have a vague sense on if Mr. Market has gone bananas or not.

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