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by Hubertus Hofkirchner -- Vienna, 19 Dec 2019
I have always puzzled why Augur Project called itself a "prediction market" instead of what it really is: a betting exchange. So what's the difference?
A betting exchange is a zero-sum game for distributing money between gamblers depending on a future outcome. Some win, the others must lose. In Augur's case it's built on the Ethereum blockchain, but that's about all the difference.
A prediction market proper (and Prediki is the first of this new breed) is a value-creating virtual market mechanism which discovers information on future human action. Everybody profits: a prediction market client gets valuable, exclusive insights such as: a reality-check on business strategy, trends predictions, chances of innovations, technologies or new products, competitive threats, or simply performance forecasts. The client happily pays the prediction market for this quantitative and qualitative information which in turn pays participants. Everybody wins, or better: nobody loses money.
In summary, a proper prediction market is an economically and socially desirable tool whereas a betting exchange, serves primarily for gambling which is a socially somewhat problematic activity.
More information: Augur users and transaction volume on DappRadar
