Prediction markets have been booming in the past two years.

Platforms like Polymarket and Kalshi allow you to bet on all kinds of real-world outcomes—who will win the presidential election? Which team will win the next game? Will a major tech company launch a new product on time? More and more people are participating, and even mainstream media are starting to report on them frequently.

Take Polymarket, for example. Users buy and sell shares of contracts based on their own predictions about the future, with single-platform trading volumes reaching tens of millions of dollars. Kalshi goes even further, backed by investments from Y Combinator and Sequoia, and has obtained regulatory approval from the US Commodity Futures Trading Commission (CFTC), allowing it to operate directly within a regulatory framework.

Why has this suddenly exploded? Simply put, it taps into human nature: curiosity drives you to want to know the answer, financial incentives make you think more seriously, and information asymmetry creates trading opportunities. When your wallet is tied to the outcome of your predictions, you’re more willing to put in the mental effort than usual.

Blockchain technology plays a crucial role here—transparent, efficient, global, with no middleman taking a cut.

**How does it actually work?**

Simply put, a prediction market is a place to buy and sell “future outcome contracts.”

Suppose there’s a market asking: “Will Bitcoin break $100,000 in 2026?” If you think it will, you buy a “Yes” contract—if it happens, you make money; if you don’t think so, you short or sell. The market price reflects public expectations in real time—if a contract is priced at $0.65, it means the market believes there’s a 65% chance of it happening.