Is the predictions market back?
Intrade, the popular betting site where one could place odds on anything, was shut down back in December. The loss deprived gamblers of their wages, and media and pundits of a trend indicator that was often more accurate than polling.
A new site launching today could resurrect the practice, however. Predictious is a predictions market conducted entirely in Bitcoin, the virtual currency that approximates cash on the internet. Predictious is based in Ireland, the former home base of Intrade, where this kind of betting is legal. The fact that trades are done in Bitcoin means anyone around the world can participate.
The site uses Bitcoin, which means anyone in the world can bet
Predictious is hoping that the fact that trades are done in Bitcoin, and not in a nationally regulated currency, could help it evade running afoul of gambling and securities trading regulations. However, the site says it is prepared to pull out of the US if threatened by regulators. Intrade had to pull out of the US because the Chicago Futures Trading Commission (CFTC) sued the company for running wagers on so-called "commodity options" — things like the price of gold and the cost of oil — without listing the contracts on a CFTC-regulated exchange. The loss of its US customers, which made up most of the user base, weakened the company. When some accounting problems arose, it wasn’t long before the whole operation buckled.
There are other Bitcoin prediction sites such as Bets of Bitcoin and BitBet, but those sites mostly take bets on what will happen to the price of Bitcoin, which has historically been very volatile, and other events in the niche Bitcoin economy. Those sites are also structured as pari-mutuel bets, where all bets are placed in a pool and no one wins until the event concludes.
By contrast, Predictious is structured like a futures exchange. Bets have guaranteed odds, and can be resold before the outcome of an event. The goal is to replace Intrade, founder Flavien Charlon told The Verge. "We know that a number of traders on Intrade have been looking for an alternative since it was shut down," he said in an email.
Predictious is launching with a number of open wages. You can bet on the sex of the royal baby, the gender of the 2016 US President, the nationality of the Tour de France winner, and which characters will die next on Breaking Bad.
"Traders on Intrade have been looking for an alternative."
The site is easy on the eyes and the navigation is intuitive. With all the Intrade refugees, the site stands a chance at grabbing enough users to have a healthy marketplace right from launch. However, those users have to get used to the idea of using a digital currency and then figure out how to get some; even BitInstant, the fastest way to get Bitcoin, takes at least 30 minutes.
The last step is entrusting your money to a faceless company based in Ireland that only does business in Bitcoin. Numerous incidents in the past have shown that because the currency is virtual and difficult to track, it can be easy to get away with ripping off your customers en masse. What’s the over-under on that, anyway?