Social Prediction Markets

Reputation tracking and skin in the game could go a long way towards restoring sanity.

I was telling a friend who has simultaneous crypto and prediction market addictions about Chris@Karlstack's recent initiative to develop a memecoin-based prediction market hedge fund, and he in turn informed me about PLSPEAK (pronounced 'pulse-speak'), a project intended to develop a social network built around a blockchain-enabled prediction market.

If I've understood the concept correctly¹, the idea here is that by combining a social network and a prediction market users can see who has skin in the game, and how much, and use this as a metric to evaluate how much weight to give another user's opinion.

I didn't see it discussed anywhere, but this would especially make sense if you can see, not just how much a given user has wagered on a given market, but what their track record looks like. In fact, that strikes me as much more important than the magnitude of any given bet. Some rich idiot could roll in and drop a million fedcoins in the stablecoin of their choice², thereby giving the impression of having great confidence in his opinion, and accruing potentially undeserved gravitas. On the other hand, a user with less in the way of liquid capital might have made a much smaller wager on a given topic, while having an overall much better track record of correct predictions. When evaluating who one should listen to, the poorfag with the good track record seems like the better bet.

Contemporary social media is a cacophony of hot takes on the current thing, with users competing for shares and views by coming up with the most outrageous or incendiary remarks. Tracking the accuracy of a given pundit or e-celeb or schizo anon is practically impossible. That in turn leads to massive trust issues: determining who's likely to be right or wrong on a given question is almost impossible, and most people just revert to simple heuristics like 'this take agrees with my tribal biases' i.e. it hurts less to believe.

The current situation is readily exploited by grifters who are far more adept at ragebait tweets than they are at alethiology. It's also beneficial to the clownish pundit class of the legacy media, for whom reliably wrong predictions - inflation is temporary! the market is stable! the Afghan army will fight for democracy! the Iraqi people will welcome us with open arms! Trump is sure to lose to Hillary! no snow by 2020! - is absolutely no barrier to a continuous, lucrative career as supposedly serious men whose bloviations should be taken as something other than managerial class propaganda.

A social network/prediction market hybrid could be an absolute game changer if it enabled reputational tracking. Users with a record of successful predictions would naturally rise to the top, with their commentary floating on the auctoritas generated by their successful record. The opposite would happen to commentators who kept getting everything wrong, and in due course they'd either improve their prediction game or just shut up already. Propagandists whose entire schtick is deception on behalf of corporate or political power would find themselves ignored, and the powerful would soon realize that truthfulness is their best bet for retaining cultural influence. Grifters who thrive on sowing discord and generating rage-clicks would fade into irrelevance.

Imagine how different the last two years would have been if the public debate had taken place on PLSPEAK instead of Twitter. The hot takes on the emerging pandemic virus would have been accompanied by bets being placed on the efficacy of lockdowns, social distancing, and masks; on the true infection fatality rate; on the rate of spread under various conditions of seasonality, latitude, and population density. Within a few months, it would have been very obvious that everyone predicting (say, on the basis of the Diamond Princess results) that the infection fatality rate would be some small fraction of a percent, or that masks would be useless, or that lockdowns would accomplish nothing but to raise the opiod overdose rate, were correct; while all of those screaming hysterically that doom was imminent and confidently predicting that mass house arrest would avert the apocalypse (save in countries that didn't follow this path, such as Sweden, where everyone would surely perish), were wrong in every particular.

This having been demonstrated quantitatively and objectively, the hystericists would find their reputations to have been ruined, and everyone would know to ignore anything further they had to say on the subject. Maintaining the mass panic would have been far more difficult, and governments and institutions would have found themselves under a much higher level of public pressure to justify continued containment measures.

There are innumerable other examples. Ukraine is a very obvious one. That particular shit-show is in large part the fault of the same neocon reptiles that tricked Americans into their Mesopotamian misadventure. Had they been forced to put their money where their mouth was in the first place, they'd have lost their money, shown to be fools, and whatever noises came out of their mouths subsequently ignored. The national security state would have had a much more difficult time explaining to the citizenry why they were still acting on the advice of people who were objectively, quantitatively, and precisely measured to be fools. On the other hand, geopolitical observers that had correctly predicted that no WMDs would be found and that the occupation of Iraq would turn into organ-grinding quicksand, would have made a lot of money, and would have accrued quite a bit more clout in the national conversation. When those same people said, hey, maybe NATO shouldn't poke that Russian bear by launching a colour revolution on rightful Russian clay, that won't end well, Western governments would have been forced to listen.

I have no idea if PLSPEAK is intended to provide this sort of social reputation-tracking technology. If you glanced at their front page, you know exactly as much as I do about that particular project. A network that married prediction markets to punditry would, however, be a powerful weapon against the pandemonium of managerial class public relations psywar. It would silence the deranged shouting of the ideologues and amplify the calm voices of the alethiologues, and the planet would be a much saner place for it.

1. And there's really not a whole lot on their project page, so who even knows if this will ever materialize.

2. Fedcoins themselves not really being all that stable these days.