We talk about three things over here: Saylor (and Bitcoin financialization); AI and the economics of infinite generation; and fake-legalized gambling prediction markets. #1497608, #1509638, #1518216, #1518512, #1518682, #1518899

I get it. They're hot, they're fun, they're sticking-it-to-the-elite-man.

Seeing smart(-ish) people saying stupid things about prediction markets recently has definitely moved my needle... maybe they're better/more useless/less stupid than I used to think #1518899. And Predyx has been good to me recently, making me bag all sorts of WIIIINS -- world cup and treasury companies included. (Best way to shut Mr. Den up? Pay him!) Next, Mr. Blok is gonna pay me a ton more when NAKA fails #1520563. What a loser!

Prediction markets are also way more stupid than I used to think...

Anyway, today Mr. Levine is out considering wacky things about KalshiAnyway, today Mr. Levine is out considering wacky things about Kalshi

The order of magnitude is that artists get a few dollars for every 1,000 times their songs are streamed on Spotify, but bots can generate fake Spotify streams at a cost of something like $1 per 1,000 streams. [1] If you can generate 1,000 streams for $1, and those 1,000 streams pay you $2, then you’re in business, sort of. We have discussed the economics of that business. It’s not a business that Spotify likes, or US federal prosecutors. We discussed it because a guy who allegedly did it was arrested for fraud.

Yes, infinite generation competes away the streaming rewards down to 0-ish... even well before the AI bots showed up.

If you can generate fake Spotify streams at a cost of around $1 per 1,000, and you don’t mind doing a little crime, what is the best way to monetize that? Getting paid $2 per 1,000 streams as artist royalties is not terrible. (It’s like a 100% return on investment?) I’m sure that there are more complicated big-picture sorts of answers.

Obviously, you game a Kalshi bet! (Like that Paris temperature man)

Open interest, by the end of the month, was about 76,000 contracts, meaning that you could have made tens of thousands of dollars on Kalshi by spending hundreds of dollars to manipulate Spotify, on the order of a 10,000% return on investment.

Now that's what I'm calling alpha. No need for bitcoin NGU or SpaceX shenanigans. We riiiiiich.

Very related to the eggstraordinary returns the other week #1517993

We shall doubt realityWe shall doubt reality

Prediction markets came, and they may have been sold as "civilization's way of knowing what it knows" #1518216 ... buuuut they've also made us doubt the realness of everything:

What prediction markets have accomplished is opening up all of reality, not just financial markets, to that sort of doubt. You can make money on Kalshi, now, not just by manipulating stock or Bitcoin or whatever markets, but by manipulating Spotify streams or temperature gauges or the words people say at press conferences or the location of a gorilla.

"Prediction markets are 'truth machines,' in the sense that they give people incentives to figure out what is true and bet on it""Prediction markets are 'truth machines,' in the sense that they give people incentives to figure out what is true and bet on it"

...but also, falsehood machines, because those same incentives prompt people to manipulate outcomes.

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