The way he presents this situation as being foisted upon him against his will in that tweet comes across very different than his original disclosure where he made it sound like a positive windfall.
I'm not accusing him of doing anything wrong as he didn't originate the coin, but his original disclosure messaging on the situation was pretty horrible which is why it harmed his reputation.
> they are getting supported by the 5% who pay most of the taxes
The same 5% who in many cases run massively profitable companies that pay their workers on the bottom so much less than a living wage that they are forced into tax-funded social safety net programs like SNAP to survive.
That 5% can cry me a river about their tax burden.
> Do you think Americans are inherently more corrupt than the French?
I'm not who you asked (and I think the levels of military spending in the US are a huge problem) but IMO Americans are not inherently more corrupt than the French but they are currently much more tolerant of corruption than the French.
It is hard to imagine the level of corruption currently being openly flaunted by parts of the USA government happening in France without the country burning down.
Whether or not this tolerance is inherent or is the result of both learned helplessness and real disempowerment through the US government having already failed the average citizen for so long is up for debate.
Ok, but isn't the idea that prediction markets surface private knowledge a big part of the defense as to why they shouldn't be treated as illegal gambling?
So like, which is it, is insider trading expected, or are these just gambling sites that should be illegal in many jurisdictions?
Yes. This argument doesn't even apprehend insider trading laws on regulated securities markets in the US, where the crime is about theft, not fairness.
Matt Levine has a good take on this. His informal, distilled definition is essentially:
- There is a time gap where insiders know something material and the public does not.
- Someone with access to that material nonpublic information, who is not supposed to use it for personal gain, trades on it anyway.
- That conduct is treated by courts as a deceptive scheme against the less‑informed trading counterparty and against the information’s rightful “owner.”
In other words - you profit at another person's expense (e.g. stealing) because you have information and the other person doesn't.
Two scenarios:
(1) a US Naval Officer knows about a strike 24 hours before it happens and places a bet against someone who doesn't have knowledge about the strike.
(2) Neither a US Naval Officer knows about a strike 24 hours before it happens and someone who doesn't have knowledge about the strike do nothing.
Scenario 1 is (or should be) illegal because the officer is using the information for personal gain, when the information was explicitly given to them for national defense reasons (thus violating the rightful owner clause).
If all one cares about is the accuracy of predictions (i.e. setting aside value judgements vis-a-vis society or fairness), it does seem like "insider trading" should make prediction markets more accurate.
It makes them more accurate at the time the insider places the bet. But to maximise profit, they are incentivised to misdirect before they place the bet (and worse still from society's perspective, are incentivised to take counter-intuitive or downright harmful actions to profit at the expense of people who bet on the view that it made no sense for them to do that)
You are a spokesperson or decision maker for an entity which is bet on, like a sports team or the government. You publicly indicate that you are going to do one thing (probably the thing that makes most sense), so the market bakes that into their assumptions and offers favourable odds for bets on doing the other thing. Then you place your bet shortly before you do the other thing.
(it's true that low level insiders might have limited influence on the actual outcome, but the current suspicion with prediction markets is that some of the participants do have that influence, or are being intentionally helped by people that can)
It really isn't at all like poker and really is a lot like the predetermined flow I'm just describing. Prediction markets regard the actions of politicians, sportspeople or businesspeople as indications of their wider goals for the country/team/business, not bluffs to try to influence their betting action. If a company says they're planning to IPO this year, everybody reasonably assumes that means the board want to make the IPO happen, not that they've already decided against it but reckon they can make a decent amount of spare cash anonymously betting against it happening on Polymarket
It’s not really a game when one player gets to decide the outcome. In poker, the guy who went all in can’t peek at your cards and swap out his hand at the last second.
Agreed. So who are the outsider chumps taking the other ends of these bets? At this point, it doesn’t make sense to participate unless you’re an insider.
Prediction Markets, unlike many gambling sites, create a marketplace for odds. There's no house taking positions like in certain casinos or on DraftKings. Market makers offer shares in Yes and No while bettors buy and sell these odds to each other or to market makers.
when have we ever defined gaming/gambling as 'a thing where the house takes a rake' ? I don't understand this argument and it always feels disingenuous when brought up.
I'm not really sure what position you're taking but taking a rake can certainly change the legality of an activity; in California, playing poker in private is considered a social game and is legal, _except_ if party is taking a rake.
Er it's not. Gambling where the house takes a cut is considered a form of commercial gambling and is often made illegal or has stipulations applied to it.
If you're asking about why prediction markets fall under the CFTC, this is actively evolving but generally prediction markets are considered to be under the CFTC because they can be used to hedge against events.
For example if you're trying to do business in Oman but you're worried about Iran tensions spilling over, you could take a Yes position on an Iran conflict bet as a hedge. You may lose business but can make some of it up in the hedge.
"Gambling" the concept legally is very complicated and has a lot to be understood, so I'd suggest doing some searching or LLM asking if you want an intro on philosophical definitions or the legal landscape.
I didn't actually define gambling? I just said it's complicated. I just mentioned that if a house takes a cut this is a form of regulated commercial gambling, distinct from social gambling.
There's a body of legislation and legal precedent that actually defines gambling and how that's distinct from markets.
On the Polymarket homepage right now, one of the featured markets is whether or not Bitcoin will be up or down over the next 5 minutes. It's hard to justify that as anything more than illegal gambling.
I find prediction markets to be interesting on two fronts:
1) They like a really good way to determine the probability of something happening, which is interesting for events like elections
2) It provides an avenue for smart bettors to take advantage and sharpen their skill, whereas they get severely limited or banned from traditional sports books
However, it seems like all incentive structures for the markets and consumer behavior will steer these things to degenerate gambling.
Polymarket is not CFTC regulated, it's considered illegal in the US. CFTC does not allow betting on securities prices. Cryptocurrency is a bit of a gray area because it's not considered a registered security.
N.B. it becomes a bit frustrating to talk about financial and regulatory things on this site because the level of knowledge is generally "I read some articles on social media about markets" level.
> Cryptocurrency is a bit of a gray area because it's not considered a registered security
Additionally, the SEC and CFTC guidance on what digital asset can be treated as a security and what can be treated as a commodity was only released a couple weeks ago [0].
Stuff is changing rapidly so it's best to keep an experienced regulatory lawyer on retainer.
> N.B. it becomes a bit frustrating to talk about financial and regulatory things on this site because the level of knowledge is generally "I read some articles on social media about markets" level.
> Their defense is that they are a gamified futures contracts and hence should fall under CFTC regulation.
That might be the defense. They are inherently designed to leverage insider trading though. I made a top level comment with links/resources that argues why.
Prediction markets don’t need to surface private knowledge, they can surface sophisticated interpretations of public knowledge. They are certainly gambling if you’re an unsophisticated rube (which is most of the users).
I mean that's why insiders are being investigated right?
But sometimes the answer is more difficult than it seems. Is a mid level military officer an insider? If you overheard a conversation on Capitol Hill are you an insider?
First, you’re describing the insider trading that is not permitted.
Second, the majority of prediction markets are predicting utterly mundane things like sports. The tiny number of news grabbing markets are not representative.
I was at 2) until the end of last year, then LLM/agent/harnesses had a capability jump that didn't quite bring me to be a 1) but was a big enough jump in that direction that I don't see why I shouldn't believe we get there soonish.
So now I tend to think a lot of people are in heavy denial in thinking that LLMs are going to stop getting better before they personally end up under the steamroller, but I'm not sure what this faith is based on.
I also think people tend to treat the "will LLMs replace <job>" question in too much of a binary manner. LLMs don't have to replace every last person that does a specific job to be wildly disruptive, if they replace 90% of the people that do a particular job by making the last 10% much more productive that's still a cataclysmic amount of job displacement in economic terms.
Even if they replace just 10-30% that's still a huge amount of displacement, for reference the unemployment rate during the Great Depression was 25%.
Agreed. As a kid it felt there was so much energy to make things better, to fight the system. So depressing growing up and seeing so many peers and idols becoming the same inward-looking grey old farts they used to mock.
There is certainly some logic behind the old joke about young people with no heart and old people with no brain. It's natural to become a bit more conservative as you age. Though I would clarify that I think it is natural to become more of a normal conservative; the current conservative party in the US is ... not.
I'm not seeing that. Trump support in 2024 was pretty strong across the board. The born-in-1960s edged out the other decades, but it was not by a wide margin (and I consider GenX more of a 1970s phenomenon than 1960s anyway).
If you want to pick a generation to complain about, look how hard the younger folks swung in favor of Trump in 2020 and then even more in 2024.
What if this story took place on a planet where the inhabitants collectively decided to value at-all-costs economic growth over a sustainable ecosystem, resulting in a situation where they were losing over a trillion metric tons of ice per year and that is what caused the mysterious island to be revealed...?
I'm not accusing him of doing anything wrong as he didn't originate the coin, but his original disclosure messaging on the situation was pretty horrible which is why it harmed his reputation.
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