A prediction market allows, that you can bet on a different type of future events. The event price can show what is the opinion of the people. So, It will be possible to bet on events like sports, politics or celebrity marriage.
First of all, you can make money by betting on these events, which can be very interesting. If you are expert in some special topic, you can have far better decision-making ability then others. Profitability of each event is based on math algorithm. Every event has own market contract, which represents actual mood of an event. A contract is traded between 0 – 100% and it is defined by Binary option system.
Another use of prediction market can be for probability determination of event result, because current values are represented by an opinion of average people. This information can be very valuable for all sides. Generally, society can express there their opinions based on the underlying value of bets.
Most of all prediction markets were always centralized system with central decision power, which is the big problem. Technology didn’t allow to create the decentralized solution. As a result of evolution blockchain technology and Ethereum platform, decentralized prediction market can become a reality. The entire system will be defined by smart contracts with clear rules and conditions, which nobody can change.
Actually, there are in development a few projects. Most popular are Augur and Gnosis (according to coinmarketcap). Augur and Gnosis are trying to create decentralized prediction market based on the blockchain technology thru Ethereum DApp. The decentralized solution will be definitely more popular then centralized prediction markets. Also, you can look at deep Wikipedia definition, where you can find much more information.
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