Crypto Critics' Corner

,

Episode 177 – Are prediction markets a bet against democracy?

Are prediction markets a bet against democracy? – Crypto Critics' Corner

Cas Piancey and ‪@bennettftomlin‬ discuss the onslaught of prediction markets.This episode was recorded on January 28th, 2026.

Cas Piancey and Bennett Tomlin discuss the onslaught of prediction markets.

This podcast was streamed live on January 26th, 2026.

Where to find the podcast:

Other episodes mentioned in this episode:

Other resources mentioned in this episode:

Subscribe to get each episode delivered to your inbox:

We also have a Discord Server you can join here.

Where to find Crypto Critics’ Corner:

English Transcript:

00:00:05:12 - 00:00:13:21
Cas Piancey
Welcome back everyone. I am Cas Piancey and I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. How are you today?

00:00:13:23 - 00:00:16:02
Bennett Tomlin
Well. I'm here. How are you, Cas?

00:00:16:04 - 00:00:48:09
Cas Piancey
Tired. Tired? I don't know. I don't know what else to say. Today we're talking about prediction markets. Now, I think most of our viewers, most people who tune in, probably are aware of prediction markets. I don't think we've spent a lot of time talking about them in general. But I think it's a really meaningful discussion to have right now because I think they are a possible instrument that can be used against free speech and against democratic values.

00:00:48:11 - 00:01:15:20
Cas Piancey
But before we get into that, I think it's worth, talking about what the difference is between between prediction markets and many other, many other, I don't know, like forms of I don't know what to call it. Right. There's gambling, there's sports betting, there's options trading. So let's can we, can we help people understand what the differences are between all of these things?

00:01:15:21 - 00:01:20:21
Bennett Tomlin
We can certainly try.

00:01:20:22 - 00:01:51:07
Bennett Tomlin
Prediction markets at their most basic are a binary option. You are purchasing a financial instrument for a certain amount of money that will either go to 100 or 0 at the time the contract concludes. For most of these prediction markets, what that looks like is you buy a proposition like, Donald Trump will say poop four times within the first three months of his presidency.

00:01:51:09 - 00:02:21:19
Bennett Tomlin
And if Donald Trump does say poop four times, you get the hundred. And if he doesn't, you get the zero. This looks and feels a lot like other forms of gambling. Especially like prop bets and things like that. The and again, like in sports betting, it looks you can achieve many of the same things you could with a bookie by instead going to a prediction market.

00:02:21:21 - 00:02:39:06
Bennett Tomlin
The exact structure of your bet, like if you were to break it down as like a financial instrument might sometimes look a little bit different, but practically it ends up working out kind of the same. You put in a certain amount of money, and at the end, if the event goes in your favor, you get more money.

00:02:39:06 - 00:02:43:13
Bennett Tomlin
Or if the event goes against you, you lose the money you put in.

00:02:43:15 - 00:03:13:05
Cas Piancey
Yeah. I mean, that's the that's the basic that's the basic idea. But I think there's a lot of weird intricacies, involved in why these are classified differently, why some of these, are dealt with by very different, dealt with by very different regulators. And that's worth discussing. I don't know, I don't know if that delineation is going to exist in a decade or something.

00:03:13:05 - 00:03:24:02
Cas Piancey
Right. But but I will say that, for instance, Kalshi is, regulated. Haklshi is a prediction market. Kalshi is regulated by the CFTC. So.

00:03:24:02 - 00:03:26:00
Bennett Tomlin
So is PolyMarket

00:03:26:02 - 00:04:01:05
Cas Piancey
Sort of regardless. Right. So those are they're, they're looked at by the CFTC. But then when you have DraftKings, there's a bunch of state gambling regulators that are that are overseeing, what they're doing. And if they mistreat a customer, what what have you, and when it comes to options trading, it's also the CFTC. So if you're trading, if you're trading options on Robinhood or whatever, you you would if you wanted to seek relief, you would talk to the CFTC.

00:04:01:07 - 00:04:27:16
Cas Piancey
But those are, those are completely different regulators and, and the main distinction I noticed and you you can get into this little get into the weeds of this more, if you want. But the main distinction I'm seeing between something like DraftKings or FanDuel and Kalshi and PolyMarket are that there's the house. That's who you're playing against when you're betting on DraftKings.

00:04:27:18 - 00:04:43:19
Cas Piancey
Or there's market makers, which are who the the people taking the risk to create markets by putting liquidity in it and basically getting more people to want to put money into these markets.

00:04:43:21 - 00:05:10:05
Bennett Tomlin
Yeah. And it's not like quite the convenient 1 to 1 there that we kind of wish it was like in a lot of the market on something like Poly Market or Kelsey may be dominated by a market maker or something like that, but there is also still like other retail traders in there who are participating in the market, where it's like at a bookie that your counterparty is always the bookie.

00:05:10:07 - 00:05:34:16
Bennett Tomlin
Like the way a prediction market works, like if you go on Poly Market right now and look at one of the markets and it's trading at, say with God, I hate that they put their percentages a 32% chance. Generally, that means you can like buy that asset for like pretty close to $0.32 and sell it for pretty close to $0.32.

00:05:34:18 - 00:05:54:00
Bennett Tomlin
They're not always as close as you might think. They have like up to a ten cent disparity between bid and ask. And they'll still like just put your price in between them. And so yeah you get the asset and then it either goes to 100 or 0. And like your counterparty could be a market maker who originally sold you that.

00:05:54:00 - 00:06:02:14
Bennett Tomlin
Or it could be just some other person who decided, I've made enough for this bet is no longer favorable. And they exited their position.

00:06:02:16 - 00:06:34:02
Cas Piancey
Yeah, I it's it's a topic that's coming up a lot right now because of commodities. Another CFTC regulated, another CFTC regulated group of assets. And that seems to be an issue right now because silver and gold have gone so, so high in value, have gone up so quickly that some people are having difficulty selling physical gold and silver in their local markets.

00:06:34:04 - 00:06:53:20
Cas Piancey
So liquidity plays a role in all markets, in stocks, in all of this stuff. Right? Like liquidity is a real, we used to see it a lot in crypto. Slippage was crazy. In in the days when we were at the beginning of covering cryptocurrency, when we started, in 2017, 2018, so slippage is very real.

00:06:53:20 - 00:07:16:13
Cas Piancey
And of course, it's going to be real in prediction markets and stuff. And I want to talk about this too, because, some market makers are I don't know how to put this, but other than they have more liquidity. But like, market makers do market making for many. There's different types of market makers and there's different reasons to get involved in it.

00:07:16:13 - 00:07:18:23
Cas Piancey
Right?

00:07:19:01 - 00:07:45:17
Cas Piancey
Yes. Yeah. Can I can you expand on what like what are the differences. Why would someone like I think I was listening to a podcast today and the guy was he was basically describing all the different frauds he's, perpetrate, perpetrate, perpetrated on different prediction markets. And it was like, okay, he was using very little money to accomplish these, these gains that he would eventually acquire.

00:07:45:23 - 00:08:03:16
Cas Piancey
And this was not delta neutral options trading. This was not a hedge, which you can get into this, but it was a guy who was scalping off the top because he knew he could do a specific arbitrage move to get money. And there are market makers who operate that way, right?

00:08:03:18 - 00:08:24:06
Bennett Tomlin
Yeah. So there's probably a few different types of actors you're looking at in this space right now. There are market makers who are like arbitrage between, say, PolyMarket and Kalshi. And their primary goal is like when they see a disparity between those markets that's larger than their transaction costs. They work to bring them up to parity, because then they can make the money.

00:08:24:06 - 00:08:47:03
Bennett Tomlin
And the difference there. The other type of like large trader you're probably seeing a lot of is what I was describing to you before we got on as the next Sam Bankman-Fried, which is like someone who's got in overinflated sense of their edge and is willing to take large directional bets. They're not remaining delta neutral. They are directional.

00:08:47:03 - 00:09:18:21
Bennett Tomlin
One way and are hoping that between that and the other, providing liquidity activities, still doing, they'll end up ahead. And like in the case you're talking about back in the old days, like with predictit, which I used to gamble on a little bit back when I was in college, back when I was in college. Excuse me, some of the people who would be trading that their goal was to arbitrage it with, like bovada, the offshore casino, because they would sometimes have election markets and like the implied rate of return from the ads.

00:09:18:21 - 00:09:35:22
Bennett Tomlin
And there would diverge from predicted. And so you could like move one of those markets or move the line and one of those until you were eventually back at parity. There's some limits to how you can do that, because you can't exit a bet on an offshore casino the way you can, like exit a position on a, prediction market.

00:09:36:00 - 00:09:56:11
Bennett Tomlin
But like, there's a lot of those kind of strategies. So I think the, like two big institutional actors you're seeing, there probably are some people who try to stay mostly delta neutral and are just providing liquidity via like limit orders to these various markets. Then I think there's a bunch of shops that think they have an edge and are trying to do prop trading in these markets.

00:09:56:13 - 00:10:31:00
Cas Piancey
Right. Yeah. And I think, a, a distinction I want to make between like, options trading is obviously dangerous. If you don't know if you don't know what you're doing, you shouldn't get involved. Period. If you think it's easy, you're wrong. But I, I do think that there's a big, a big difference insofar as the institutions doing the market making in the options market, they make mistakes and some of them have blown up, but like it is generally not the case.

00:10:31:02 - 00:10:56:07
Cas Piancey
Whereas I think the market makers involved in a lot of these, these prediction markets are relatively small fries. In the scheme of things, they are not dealing with billions of dollars. They are not trying to necessarily remain delta neutral. And I also think it's really easy to in many ways game these markets.

00:10:56:09 - 00:11:29:18
Bennett Tomlin
I think that's a point we should kind of sit on here for a minute is like the possibility to game these markets like because that's one of I think the societal harms that can come from prediction markets. Besides just whether or not these markets function as advertised, is that like once you have people who say, for example, start integrating poly market markets into their like political reporting and treat the current clearing value of that market as like a probability a certain candidate will win.

00:11:29:20 - 00:11:57:07
Bennett Tomlin
That ends up being something where you can meaningfully affect, like a political race. Right? You can, suppress someone's chances early in a campaign, like suppress their market early in a campaign so they get fewer donations and can never mount the same kind of campaign, closer to an election date. You might actually want to, like, show someone overperforming compared to polling, because it might help suppress voters or things like that.

00:11:57:09 - 00:12:25:17
Bennett Tomlin
And like that gets at the fundamental truth here, which is that, like, as much as these markets want to say a thing is a chance, like what they represent with these markets is a chance. It's not really like often times they are like the better descriptor for what they are is like the a rough measure of the belief of the current participants in that market, as to its final outcome.

00:12:25:17 - 00:12:36:20
Bennett Tomlin
Right. Like it's a limited set of people with a limited set of information, it is not a chance or a probability in any meaningful sense, regardless of what poly marketing Kelsey say.

00:12:37:02 - 00:13:03:17
Cas Piancey
And a really important point here is that it's not about like votes or something, right? It's not like the more people that want to do this thing, the higher the odds are. It is strictly monetary based. So the if there's a billion billionaire who wants to place $1 billion bet on something, they can, and that will change the odds significantly.

00:13:03:19 - 00:13:40:13
Bennett Tomlin
I think well, I think related to that, one of the most troubling aspects about prediction markets, and it's one of the things that you hear their advocates like, claim is a strength, is that prediction markets will tend to integrate information that might not show up in other markets, aka people will insider trade people with a real edge, real information about what a certain outcome will be, or the ability themselves to affect that outcome will participate in these markets and in so doing, be able to extract money from every other participant in that market.

00:13:40:18 - 00:13:55:20
Bennett Tomlin
And I think that's the other thing that people aren't fully appreciating and like from that you lead into like the assassination markets and things like that, but like that's just one example of a market that, like, someone can influence the outcome after having invested in it.

00:13:55:22 - 00:14:29:20
Cas Piancey
Yeah. There's also like there is an argument that people make that we've heard a lot that all insider trading is good. Basically, it's getting the information out there to retail traders and everyone else faster because you're moving the market in a very significant way. We saw this, specifically with the Venezuela invasion. I think it was all over the news about a specific bet made where, we don't know who were who it was, but the user had the last name Wycoff.

00:14:29:22 - 00:14:32:15
Cas Piancey
So who knows that I like that. Could be a user.

00:14:32:15 - 00:14:44:02
Bennett Tomlin
Had an INS hand with the name with graph in it. Right. It may not have been one of the World Liberty founders who were related to the Special envoy for peace, or whatever his fucking title is.

00:14:44:02 - 00:15:06:02
Cas Piancey
Could very well be anyone. But apparently somebody, figured this out shortly before the invasion happened, put a bunch of money on it, and made something like $500,000, $450,000. So we've seen this play out in real time, and people will argue that that is actually a good thing, right?

00:15:06:04 - 00:15:31:15
Bennett Tomlin
Yes, they absolutely will. And I think the thing like this is especially asinine when they're talking about prediction markets on financial assets which exist, like you can participate in a polymer market bet as to like whether or not Bitcoin will hit 150 K by a certain date or something like that. Those markets exist. And like one of the arguments that's been made about them is these markets will integrate that information.

00:15:31:20 - 00:16:10:06
Bennett Tomlin
But like the process of that integration is a process of extraction from other traders that benefits the person with the edge, even if in some sense that information is revealed earlier. The process by which it's revealed is a process of pure extraction from the other participants in the market, and it only benefits the person who is using that nonpublic information it in no way like, obviates or changes any of the like historical ethical arguments around insider trading and is actually like it ties into the same arguments as to why insider trading was originally made illegal.

00:16:10:06 - 00:16:31:16
Bennett Tomlin
Right? Like you are gaining an unfair benefit from information that not all the participants have that works as a descriptor, just as well in these prediction markets as any other. And the asinine belief that the current clearing price of these markets represents some kind of cosmic truth is warping the minds of these simpletons.

00:16:31:18 - 00:17:03:00
Cas Piancey
Well, it's not just simpletons, and I want to that there's. So today Bloomberg put out an article that said, Carl. She said forecasts are as good as Wall Street's, so the, the thinking here is that just for anyone who's not following that headline, the the concept is they looked at all the different forecasts that, people betting on Koski have made for, rate hikes or, rate cuts on the fed.

00:17:03:05 - 00:17:16:03
Cas Piancey
And they were about right as often or better than Wall Street traders. I don't know if that's a particularly good refutation because I.

00:17:16:03 - 00:17:34:18
Bennett Tomlin
Well and like it's also like it's, it's it's silly right. Like of course they're going to cluster near where the analysts are predicting, they're reading the analysts, you know, or they're reading an AI summary of the analysts, because some of the traders in these prediction markets are borderline illiterate. But like, the point is still they're taking in that same set of information.

00:17:34:18 - 00:17:38:05
Bennett Tomlin
Of course, they're going to come to roughly the same consensus. Sure.

00:17:38:07 - 00:18:12:09
Cas Piancey
The the idea also being that, you know what? I, I'm sure that that Wall Street insiders are better than 60% or something. Right? I like okay. You know, I think that's not a 100% strike rate. It's I but yeah, I, I, I think it's interesting that the, the real issue I'm seeing is not just a consumer facing issue where I think a lot of consumers just see this as the truth.

00:18:12:09 - 00:18:20:20
Cas Piancey
They see if the odds are 75%, the odds must be 75% in real life that this thing is going to happen.

00:18:20:22 - 00:18:25:02
Cas Piancey
But it is also a media problem. Now.

00:18:25:04 - 00:18:56:03
Bennett Tomlin
That's been like one of the scariest parts for me about it is how quickly so many outlets have, like, integrated it into their political reporting. How many like sports places have polymer, get things running in the car, run like it is. People seem to have, including a lot of writers and journalists wholesale committed to the idea that, like that number represents a chance, which it doesn't really.

00:18:56:08 - 00:19:32:20
Bennett Tomlin
And again, you can kind of see this by like looking at the markets themselves. They're highly volatile. Are you really saying that like the chance this morning was 20 and the chance tonight is 30 like that. The actual chance probably hasn't changed that much. What you're looking at is like a consensus clearly. And like you can even kind of see this in like like if I flip this coin right here and I would open a prediction market on it, it would probably pretty quickly end up at about $0.50 as to whether or not it's heads or tails, but there's a 100% chance this penny is actually heads, because that's where it had already landed, right?

00:19:32:20 - 00:19:44:20
Bennett Tomlin
Like there are certain things that are already going to happen or already committed. And that helps you understand, like probability wise, why this isn't really like a chance or an odd or something like that. It is a market clearing price.

00:19:44:22 - 00:19:59:00
Cas Piancey
Yeah. And and the reason I, I guess the reason for me that it's so troubling and I, and I know we were early with tether and stablecoins, which have proven to be.

00:19:59:02 - 00:20:01:05
Bennett Tomlin
Successful beyond our wildest imaginings.

00:20:01:05 - 00:20:25:03
Cas Piancey
Yes. But also more important in the ad, like we said, it was an important thing to cover. It was fascinating, and it was only growing exponentially. We said that, and that played out exactly as we said. I think we were hoping for some sort of regulatory or law enforcement action that never arrived, but full naivete. Yeah, yeah, but we've been over that for several years now.

00:20:25:03 - 00:20:48:09
Cas Piancey
I think we've been over that for 3 or 4 years. So I like the idea that that was troubling us and we were concerned, so we wanted to talk about it early. I'm seeing the same thing with these prediction markets, but my fear is different than with stablecoins, which stablecoins I largely see as serving sanctioned countries and speculators and criminals.

00:20:48:11 - 00:20:51:00
Cas Piancey
That's the main use case for them.

00:20:51:00 - 00:20:57:05
Bennett Tomlin
People who want dollars, but where current financial regulations or norms prevent them from getting dollars, which.

00:20:57:05 - 00:21:20:23
Cas Piancey
We do for a reason. But if you want, if you think it's important that we don't do that, okay, that's that's perfectly fine. So I like there I, I see the issues financially with stablecoins. The issue for me with prediction markets is not that everyone is going to go broke, that everyone is going to become a gambling addict.

00:21:21:01 - 00:21:47:14
Cas Piancey
I think we'll hopefully be able to stop it before that happens. My my issue is that these markets damage, they truly do damage democracy. They damage free speech. They damage what good objective reporting looks like. And that's because we are humans and we we seek new information all the time. And prediction markets do that. They're constantly updated information.

00:21:47:16 - 00:22:02:23
Cas Piancey
Right. So we are deeply attracted to that. But that doesn't make it beneficial to society. And it certainly doesn't make it beneficial to democratic ideals like freedom of speech or, freedom of press.

00:22:03:01 - 00:22:25:04
Bennett Tomlin
Yeah, yeah. Well, and one, I'm not convinced that one of the end results of this won't be a huge, like, gambling epidemic where a huge number of people become addicted to gambling. Right? Like this is a really high availability and really high prevalence of some of these things in like, a way we kind of haven't seen before or in a long time.

00:22:25:06 - 00:23:01:05
Bennett Tomlin
And like, yeah, I think it is. There's this corrosive belief among certain technologies, and it appears more so in crypto than in other places that, like the age of journalism, is gone. Information is now encoded in random social media posts and in the prediction markets that aggregate their insights. And everything else is basically superfluous. And I think that fundamentally misses like what makes journalism and even punditry important.

00:23:01:05 - 00:23:37:01
Bennett Tomlin
Right? It's like part of this sense making process wherein you have to use like discernment. You have to think critically about a variety of pieces of information and how they fit together. Whereas the prediction markets just try to distill that into a single numerical value. There is a 67% chance Trump is going to shit himself at inauguration or whatever you know, like whatever it is, it has reduced any meaning or anything related to it and fundamentally financialized it in a way that favors like it.

00:23:37:03 - 00:23:42:14
Bennett Tomlin
It's favoring the simulacrum over the real. If you want to go like Baudrillard on it, you know.

00:23:42:16 - 00:24:11:22
Cas Piancey
Yeah, yeah, I, I, I guess I don't know, I part of, part of the problem is that I think we often bring up these issues and for, for us tether was like, okay, well tether and these other stablecoins that sprung up Terra, whatever. Our general solution that we provided for these problems was like, well, law enforcement and regulators have to do something to it doesn't mean stomp them out.

00:24:11:22 - 00:24:35:05
Cas Piancey
It just means do something to change the status quo. And I think our lesson that we learned was, well, that's not probably going to happen. Like if you are relying on law enforcement to do something that you want them to do, they're probably not going to do it. Instead, they're probably going to shoot civilians in the head, and, and kidnap little kids like so.

00:24:35:05 - 00:25:00:18
Cas Piancey
So if you can't rely on them in the way that you want to, I think it's really important if we're going to discuss these problems and these fears that we have for the future, that we also try to think about, what do you do, though? Right? So if we're worried about a gambling problem being preeminent in our country and free press and free speech, getting eaten away by prediction markets, what do you do outside of, say, like what was the CFTC going to do anything?

00:25:00:18 - 00:25:04:06
Cas Piancey
Because that's very paralyzing.

00:25:04:08 - 00:25:23:15
Bennett Tomlin
I don't have a great answer for you. Like, and, it it scared me how rapidly these have been integrated, because it takes that much more like political will or whatever to try to remove them after that. Like we kind of talked about with query fray or regulation tends to be a one way ratchet. It's easier to deregulate than deregulate.

00:25:23:17 - 00:25:53:21
Bennett Tomlin
And like the president's son is invested via his venture capital fund. 1789 Capital in Poly Market. He is an advisor to Poly Market, and I think he's also a paid. I know he's an advisor to Kalshi and I think he's a paid advisor to Kalshi, too, which is an absurd state of affairs. Like broadly, the norm used to be that venture capitalists wouldn't even invest in like a competitor company in the same niche.

00:25:53:23 - 00:26:36:08
Bennett Tomlin
And now what's supposedly happening here is not only did this venture capitalists invest in one company in the niche, he's providing strategic advice to another company in that same niche about how to beat, presumably, the company he's invested in, like the that kind of self-dealing suggest to me that, like over the remaining period of this administration, they went to make it very hard to remove kind of people's expectations that they're going to have access to this kind of gambling prediction market, this kind of financial market where they can predict the price of eggs in a year without having to go to the Chicago Mercantile Exchange.

00:26:36:10 - 00:27:03:02
Cas Piancey
And I don't I don't want to sound defeatist, but perhaps, perhaps the solution then, is that these markets just need to eat themselves like this just needs to be something where the liquidity gobbles itself up. You know, like I'm sure that prediction markets are stealing market share from from option trading houses. I'm sure they're, you know, from brokers and dealers I like I'm sure they are.

00:27:03:06 - 00:27:20:17
Cas Piancey
And I'm, I'm sure that they're also taking market share from DraftKings and taking market share from FanDuel. And I'm sure FanDuel is taking market share from them. And you know what I mean? Like at a certain point it's a snake eating its tail. And I and we're seeing it in a lot of different industries right now.

00:27:20:19 - 00:27:42:04
Bennett Tomlin
When we recorded like 7 or 8 months ago, I had a line in, I think it was the Molly episode, but it might have been and we had an intuition, whereas like Vlad Tenev and Robinhood would stab three regulators in the heart if it meant he could list binary options on like, a presidential election. And now we're kind of at the point where Vlad Tenev can list binary options on a presidential election if he so chooses.

00:27:42:10 - 00:28:04:01
Bennett Tomlin
Right. Like these are going to be fully adopted by a bunch of brokers and by a bunch of institutions. They're going to provide very little utility. A lot of regular people are going to become addicted, lose huge amounts of money, destroy their relationships, and the overall benefit to society will be sometimes someone will be motivated to commit murder,

00:28:04:03 - 00:28:33:21
Cas Piancey
Or or inside trades. So you find out about something before you would have found out about it. Anyway, I like those are I, I don't know what to say about that as a they'll say it's a truth oracle I think is the basic thing you hear from from prediction market advocates is that it's an oracle of truth, and it is doing everything to present objective truth to everyone as quickly as possible.

00:28:33:23 - 00:28:52:05
Cas Piancey
And I don't know if that's actually a good thing. There's other stuff we've done in history where you could clearly look at it and be like, yeah, there's going to be issues with this, but at least there's all these beneficial aspects to it, right?

00:28:52:07 - 00:29:13:13
Bennett Tomlin
This does feel a little bit like we're back in 2018 and someone is describing which is funny because the first ever crypto article I wrote was about a prediction market back then. But, more broadly, like it feels like we're listening to advocates talk and we go to them and we say, okay, is that a good thing?

00:29:13:19 - 00:29:33:02
Bennett Tomlin
What's the benefit of having that thing you just described existing in the world, whose life is made better besides your own, in the money you got from A16z besides your own, whose life is made better by this product, and in so many cases, it feels like prediction markets are still one of those things that don't have a great answer to that question.

00:29:33:04 - 00:30:11:17
Cas Piancey
Yeah, yeah. And and I like you. I think that plenty of people can look at AI and see actual productive use use cases for, for them or for LMS. I think a lot of people can look at, even the fact that like ETFs, I like cryptocurrencies are certainly I don't know if it's necessarily good, but are certainly opening up a lot of new, new people to financial markets that generally complicated financial markets.

00:30:11:19 - 00:30:40:04
Cas Piancey
Like maybe that's it's not as clearly good or bad, but for me, these feel like it's very clear that unless they're super regulated, there are mostly bad things that they present for society and that we're just kind of going to let that happen. And if we are just going to let that happen, then I think that is true, that this has to just come to its its end, however it will.

00:30:40:04 - 00:30:41:13
Cas Piancey
I like I wouldn't.

00:30:41:15 - 00:30:45:11
Bennett Tomlin
Want to be I mean, to be frank with you, I don't think it's going to end right.

00:30:45:12 - 00:30:47:19
Cas Piancey
Think like crypto. Like crypto.

00:30:47:21 - 00:31:19:10
Bennett Tomlin
Yeah, I think I think this will in many ways be more pervasive than the crypto we recognize from our origin. I think there will be a larger number of users for, like most prediction markets than there are people who have like a self-custody Ethereum wallet, if not yet within like five years. And like pretty soon after that, it'll pass the bitcoin and there'll be more people interacting with this instance of like semi regulated gambling than there is with the like more unregulated gambling of crypto speculation.

00:31:19:12 - 00:31:39:06
Bennett Tomlin
It's gone really far really fast. And like the situations that would you would need like a really prominent assassination market that I think might break through to people and like that's why poly marketing, Kelsey try to avoid having any like super obvious assassination markets on their home page. Right.

00:31:39:08 - 00:32:09:19
Cas Piancey
Well, we've talked about this before, but I remember when they Poly Market put up a, a market for whether the Pacific Palisades fire was going to spread to Santa Monica by some specific date, which to me is that's basically an assassination market. You're basically asking people to go set this fire, because if somebody put enough money on know, then all you have to do is bet a little bit, set that fire, and you just made millions of dollars, right?

00:32:09:19 - 00:32:32:23
Cas Piancey
So like, I've seen them do pretty egregious stuff before and it didn't result in anything. So I don't necessarily think that like I said, I don't think Lee and regulators are worth putting any money on when it comes to this bet. And, for me that does mean, though, we've this is something we talked about with Jim Chanos, too.

00:32:33:01 - 00:33:02:19
Cas Piancey
I used to believe in, like, education being a great way for possibly people to not get scammed and not fall victim to just addiction in gambling and finance. I don't think that's necessarily true anymore. But I also don't think Jim's answer, which is like, well, the way to learn is to have it happen to you and then you get, you know, dust yourself off and don't do it again is like, no, I think what happens is you we see it.

00:33:02:19 - 00:33:11:11
Cas Piancey
People betting all their money on some prediction market or on DraftKings. They lose everything. And then when they get their next paycheck, they just do it again.

00:33:11:13 - 00:33:32:04
Bennett Tomlin
Yeah, we've seen that a lot in crypto, right? In some sense losing it all. Like there have been traders who have described losing it all as like the formative experience that makes a long term crypto trader. Like, if you're going to be sticking around for more than one cycle, you need to like in an embarrassing way, blow it and lose it all, and then, like you're you're addicted.

00:33:32:04 - 00:34:01:07
Bennett Tomlin
You're in it because you've seen other people make big money. You yourself have like felt the sting of pain. And probably before the pain had a few brief moments where you were euphoric as it was up. And like that emotional high and low becomes addictive. And so broadly, I think prediction markets, along with the proliferation of gambling and betting in general, is going to be a corrosive element in society that is going to continue to propagate for at least the next decade.

00:34:01:09 - 00:34:16:07
Bennett Tomlin
And it's going to be like a long time until we can develop political will to really grapple with the consequences of that action. I think it's going to be a net negative for society, and I think are levers to affect it, are pretty small.

00:34:16:09 - 00:34:30:03
Cas Piancey
All right. Well, I mean, I guess that's it. I, I don't know what to say. I know that, today is earnings day. So most people are probably paying attention to a whole different set of circumstances. I know gold is like.

00:34:30:05 - 00:34:31:22
Bennett Tomlin
Missed five fucking.

00:34:32:02 - 00:34:49:03
Cas Piancey
It doesn't matter. It's up. Tesla's up I know that it missed. As usual. Also they gave $2 billion to Z. And so they're eating their own tail. And also Microsoft, what was it like 45%.

00:34:49:03 - 00:34:52:15
Bennett Tomlin
45% of their, growth came from OpenAI or.

00:34:52:15 - 00:35:22:03
Cas Piancey
Something? Yeah, yeah. So they're also eating their own tail prickles, eating their own tail. And all of these are the companies that are producing all the growth for the S&P 500 and the Dow Jones Industrial Average and all that. So so it's happening everywhere, I guess is the only thing I can say that it's not even optimistic. It's just realistic that I'm like, okay, well at least it seems like liquidity is just drying up everywhere because everything is eating itself.

00:35:22:05 - 00:36:01:12
Bennett Tomlin
It is really hard not to embrace like a financial nihilism. When you look around and see some of these things and their proliferation and the legalization and non enforcement of every kind of fraud and scam you can imagine, it is deeply corrosive, in my opinion, to like the long term public's trust in finance, in banking, in the economy as a whole, in the economic system as a whole, all of these things are like rotting at the core of all of these core societal and like, government things.

00:36:01:14 - 00:36:04:00
Bennett Tomlin
And I don't know what to do about it.

00:36:04:02 - 00:36:06:04
Cas Piancey
Yeah, cars going by, cars going.

00:36:06:06 - 00:36:07:04
Bennett Tomlin
That's right.

←

Leave a comment