In their various implementations, Prediction Markets have been around for centuries. As it happens, the advent of the blockchain technology opened up new possibilities, enabling completely trustless, uncensored prediction markets with no central authority that could manipulate the result and affect the payouts. Naturally, with new possibilities came new challenges.

In order to find out more about what is currently going on in the field, what the future may hold and what challenges need to be solved, we talked to several developers, advocates, thinkers and evangelists of prediction markets. In this first edition of #3Questions, we hear from Zack Hess, the creator of Amoveo.

Question 1: What do you think the future of Prediction Markets looks like?

Zack: ‘I imagine a future where whether you get to keep your job is determined by prediction markets instead of a boss. Instead of giving your resume to an employer, you post it online so that info is available to people making bets, and you ask futarchy whether you would be good for the job.

It is a future where people don’t care if your politics is different from theirs. Decisions for the community will be made by futarchy, not voting, so we won’t feel threatened by people having differing beliefs from our own. We will stop making the “enemy of my enemy is my friend” logic that is so common in democracy, so the number of cultures per country will explode. We will no longer be constrained to fit inside a 2-party system, so our culture won’t be constrained to fit one of the 2 narratives.

Businesses won’t be able to lobby lawmakers to get an advantage, so instead they will reinvest their profit into producing a cheaper better product. Women won’t have to wonder if they are being paid less than male competitors, because their job is assigned by futarchy, not by a sexist manager.

We can finally have a proactive strategy to staying safe from nuclear weapons, so we won’t depend on the insanity of Mutually assured destruction, so we can finally destroy all the nuclear weapons.

The government will no longer be able to enforce any monopolies in who can make derivatives. Increased competition means that the cost will go down and quality will go up. It will no longer be possible to restrict access to financial derivatives. Everyone will have access that cannot be taken away. This means we will all be better able to hedge our risks. This will destroy classism in many cases. Upper classes often use exclusive access to financial derivatives as a way to maintain their power over everyone else.’

Question 2: If or when mass-adopted, what do you think will be their main use-case?

Zack: ‘Most popular use-cases in terms of quantity of value locked up:

Hedging price risk.

Circumventing legal restrictions on investing.

Avoiding capital gains when hedging.

Most popular in terms of number of eyeballs:

Recreational gambling

Most popular in terms of number of times mentioned in conversations:

For persuasive reasons. You can prove that you honestly believe something by being willing to risk money on it.

Most popular in terms of lives changed:

Futarchy + dominant assurance contracts [DACs] together are a better way to give back and help others. We can use futarchy to find out who needs our help most, and we can use dominant assurance contracts to efficiently collect the resources they need.

We can use futarchy to find out who is bad at their job and get them all fired.

We can use DACs to efficiently hire people who live on the other side of the world. It overcomes the trust barrier. This will create jobs for a lot of people who really need them.’

Question 3: What are the current challenges that need to be solved?

Zack: ‘We need a better UX and documentation so people don’t get confused trying to use these new tools.

We need to convince people that prediction markets are the most accurate source of info, that way people will actually use them.

There is a lot of economics denialism today, so we may have to wait for some survival of the fittest action to happen until we can all appreciate the accuracy of markets.

People who don’t understand will be economically out competed by people who do. Eventually a culture that appreciates prediction markets will come to dominate, but it could take time.’