Forget polls — crypto-based opinion markets are the future of collective wisdom
Betting on opinions will make sentiment analysis more valuable and honest
PolinmrDesign/Shutterstock modified by Blockworks
Opinions are like assholes; everyone has one. Polls have long been the predominant method to capture public opinion and collective insight, largely because they offer a quick and scalable way to gauge public sentiment on a variety of topics. However, they are also subject to low engagement, spam and chicanery. Just ask the UK how it ended up with a research vessel named “Boaty McBoatface.”
Opinion markets offer an alternative way to address the flaws in traditional polling. They can be a superior method to gauge market sentiment because they obviate the failure modes of traditional polls through blockchain-enabled capabilities like economic incentives, social credibility and credentialing.
Beyond gauging sentiment or merely wagering on the outcome of events in prediction markets, opinion markets can be used to influence the outcomes themselves. Everyone from AI agents to big brands can use them to mine insights and make decisions in a way that is transparent, efficient, globally accessible and highly engaging.
Read more from our opinion section: Implement Web3 solutions now, or the media’s credibility will crumble
Opinion markets are not new. One famous example is the “Keynesian Beauty Contest,” which was popularized by economist John Maynard Keynes. In this thought experiment, contest participants were shown photographs of people in a newspaper and asked to select the faces they believed others would find the most attractive. Participants who successfully chose the most popular faces were awarded a prize.
For the sophisticated, the goal was not to choose based on individual preferences, but to predict which faces would be the most popular overall.
When applied to the stock market, one of Keynes’s core insights was that participants can get trapped in an “infinite loop” of trying to out-predict what others will select, showcasing the challenges of investing based on market sentiment vs. fundamentals.
However, I posit two more insights. The polls effectively codified the UK’s collective definition of beauty, and people loved playing the game! Unlike the largest opinion market in which few have an edge — the stock market — everyone believes they have an advantage in many aspects of regular everyday life, such as determining who’s prettiest. For example: “Who is a better match for Taylor Swift than Travis Kelce?” (We all know they are an odd match.) “What is the best French restaurant in Manhattan?” “Which of these outfits is best for a first date?” These are all examples of markets where certain individuals believe they have an advantage, making them more likely to participate.
While the stock market represents a narrow goal of economic valuation with well-defined frameworks for valuation (e.g. discounted cash flow models and P/E ratios), opinion markets can have a broad range of subjects, objection functions and analysis methods. This of course creates a much more qualitative (vs. quantitative), relatable set of markets for broad appeal.
Beyond the fun market examples discussed above, opinion markets represent a major opportunity for businesses to gauge sentiment and build loyalty with their customers in a hyperlocal way.
For example, Starbucks could submit, “What street corner would be best for a new store?” Netflix could ask, “What should be our next city for ‘Love is Blind’?” A creator may ask, “What product should I review next?”
Today, corporations spend billions of dollars trying to identify these answers with advanced analytics teams. Opinion markets could provide a fast (and in many cases more accurate) answer while simultaneously creating direct meaningful engagement with customers.
Read more from our opinion section: Crypto is becoming the same broken system it promised to fix
In addition to the shortcomings of polls discussed earlier, they do not have intrinsic virality the way economic markets do. In an age of infinite content, gamification of opinion markets with economic outcomes will drive radically more engagement and virality than polls.
What will these opinion markets look like, and can we trust their outputs? The “wisdom of the crowd” is a well researched phenomena, suggesting that collective decision-making, when aggregated, often leads to more accurate outcomes than individual judgments. Unlike traditional polls or one-off surveys, crypto-based markets offer new primitives, such as economic incentives and participation history, to increase accuracy. We don’t know what the end-state will be, but the most effective form-factor will be determined by an explosion of research and experimentation, and the crypto advantages will undoubtedly produce better outcomes.
Read more from our opinion section: Political candidates can no longer ignore crypto voters
The next generation of crypto builders will have the opportunity to create products that transform how we engage with public sentiment, forecast trends and make decisions — both as individuals and as communities.
The final question is: How will opinion markets evolve in an age of AI, where advanced algorithms can sift through massive datasets to predict social outcomes? AI agents will undoubtedly participate alongside human users, contributing their data-driven insights to the mix. I think rather than replacing human judgment, AI will compete with it to create a dynamic interplay between machine intelligence and human intuition. This will make opinion markets a unique arena for collaboration and competition between AI and human participants.
Opinions are like assholes; everyone has one. Does yours stink? Wanna bet?
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