Free money for your predictions.

I'm sure many users of betting exchanges are familiar with the term "free money" by now. Well, new-ish (they've been running for a few months now) website Predictify.com, is giving away small amounts of cash depending on the quality of your answers to the questions posted on their site.

Basically, it's cash for predictions, but it's not quite as simple as that.  Here's a quick breakdown on how you can make some money.

When you visit the site you will see many questions asking for your predictions.  Most of these will not have a 'pot' and therefore you won't earn anything from answering these questions.  However, you still need to answer them, and fast, because the quality or your response to these pot-less questions will determine your expertise rating on the site.  The higher your rating, the more you stand to earn when answering the money questions. 

Expertise level doesn't just rely upon getting it right either, you need to answer the questions early, you get more points the fewer people have responded before you.  When you see a new question, answer it quickly.  It's quite a clever way to keep you coming back and checking the site regularly.  You can also ask questions of your own, which is interesting and brings me to my next point..

"Prediction" is a hot topic at the moment.  It's cropping up all over the place.  Prediction markets are becoming quite the buzz phrase at the moment.  MidasOracle chronicles their rise brilliantly, while bestseller The Black Swan, discusses prediction in depth, tackling our inability to predict and the many fallacy's we suffer from.  I'll leave these fallacy's for further discussion at a later date, but it's my opinion that we have massive problems predicting anything.

Asking questions on predictify is certainly interesting and a lot of fun, but the answers you receive are very reliant on how you frame the question.  Asking a negative question or a positive one will skew the results alone. 

As a gambler / trader, I'm taking particular interest in this area at the moment, it's raised many a question about how we as humans see things, question things or are biased and prone to fallacy.   What processes am I going through when I make a judgement on something for example.

Most casual gamblers and traders will actively seek to predict, completely unaware of the inherent problems residing in their own psychology.  Engaging in the act of prediction alone can mess up your answer. 

I trade and win, because of poor predictions, and this is not just the odd one or two people guessing wrong, it's whole crowds, entire markets of people, being skewed by one another and the media.  Massive groups of people do get things wrong, and they do it time and again. Markets are rarely in an efficient state, for the most part they are simply an efficient representation of human inefficiency.  Fallacy and bias depicted in chart form.

I'm not trying to turn people off Predictify, it's great fun and I'm currently really enjoying seeing the distribution of the answers to some of my questions and others.  I certainly wouldn't base any judgements on the answers though.  Traders and gamblers are very much better suited to approaching the markets they trade with an attitude of scepticism, and a firm belief in the old saying, "anything can happen", because literally anything can.  99.9% of "anything" in this case, is surely beyond the imagination of even the expert level predictors on Predictify or any other "prediction market".