As the name suggests prediction markets is all about predicting how the business and money markets will behave in the future and making the most out of the accurate predictions that you make. Although, prediction markets sound like a new concept, but the fact is that they have a long history and has evolved in the middle of the twentieth century when people in the United States were crazy about betting during the election times. However, the craze for speculating the future events became more famous and people started speculating and predicting different economic events based on the current scenarios which finally gave rise to prediction markets.
Currently there are different kinds of prediction markets available like TradeSports, Iowa Electronics Market, Bet2Give, Hollywood Stock Exchange and NewsFutures. Each prediction market revolves around a specific domain and therefore, experts from that domain can predict how the future events will happen and therefore, they can bet accordingly to ensure that they make the most profit from their accurate prediction. However, most of the prediction markets make use of fake money rather than betting using the real money. Hence, you can always be assured that you are not adding more debts on your shoulders.
Today, prediction markets have different names like virtual markets, event derivatives, idea futures, and decision markets. In the United States prediction markets are legal and open to public and therefore, those who are interested in it can go ahead and bet on their predictions. Many economists and market experts believe that the predictions made in the prediction markets are very close to what happens in the real money market, and therefore, they help to speculate the future events. However, it is also criticized that prediction markets are totally based on predictions and therefore, it can create a sense of panic and distorting facts in the real market causing damage to the economy as traders can manipulate the market based on their predictions.
