Prediction Markets and Community Notes are the “Flagship Social Technologies” of the 2020s, said Vitalik Buterin
Ethereum co-founder Vitalik Buterin described prediction markets and Community Notes as the “flagship social epistemic technologies of the 2020s” on July 2. He highlighted their truth-seeking and democratic nature, built around open public participation rather than elite selection.
Buterin also recently suggested a new, clever approach to solving Ethereum’s infrastructural problem, which causes slow transactions and high gas fees.
Prediction Markets and Community Notes
Buterin said their foundation is open to public participation rather than elite selection.
Prediction markets operate on the principle that, when used effectively, collective intelligence can yield remarkably accurate forecasts about future events.
By allowing participants to bet on the outcomes of various scenarios, these markets reflect the aggregated probability of these outcomes through market prices. This method has proven to outperform traditional forecasting methods. For instance, a study by the University of Pennsylvania found that prediction markets provided more accurate election forecasts than polls between 1988 and 2012 in most cases.
Prediction markets and Community Notes are becoming the two flagship social epistemic technologies of the 2020s.
Both truth-seeking and democratic, built around open public participation rather than pre-selected elites.
I want to see many more things like this.
— vitalik.eth (@VitalikButerin) July 2, 2024
The diversity of inputs from a wide range of participants reduces biases and incorporates broader perspectives, enhancing the overall accuracy and reliability of the predictions.
Additionally, prediction markets offer real-time updates as new information becomes available, allowing for dynamic adjustments that keep forecasts current and relevant.
The financial incentives provided to participants further encourage careful consideration and reduce the likelihood of biased or uninformed predictions.
Parallel to prediction markets, Community Notes (formerly known as Birdwatch on Twitter) is advancing information verification by allowing users to add context and annotations to tweets collaboratively.
This approach combats misinformation by crowdsourcing to identify and correct inaccuracies. Unlike centralized fact-checking, the collective reasoning and sources behind annotations provide transparency.
Community Notes promotes greater engagement and responsibility within the online community by involving users directly in the verification process.
Additionally, this method scales efficiently, distributing the workload among many users, thus overcoming traditional fact-checking organizations’ limitations in handling the vast volume of content on social media.
Buterin Proposes New Model for Faster Ethereum Transactions
Vitalik Buterin has also proposed new methods to enhance transaction confirmation times on the Ethereum network, which would greatly improve the user experience.
In his latest blog post, he introduced the concept of single-slot finality, which finalizes each block before creating the next one. This approach seeks to streamline the current Gasper consensus protocol, which takes about 12.8 minutes to finalize transactions.
Buterin deems this duration too lengthy and complicated due to interaction bugs in the existing slot-by-slot and epoch-by-epoch voting mechanisms.
“Over the last couple of years, we’ve become more and more uncomfortable with the current approach,” Buterin emphasized.
Buterin also touched on the importance of layer-2 solutions, or rollups, which process transactions faster using smaller groups of validators. These solutions allow Ethereum’s main layer (L1) to focus on stability, censorship resistance, and security.
Layer-2 solutions, operating independently, cater to the demand for faster transaction speeds and effectively create a secondary blockchain layer that enhances the user experience and transaction efficiency.
Additionally, Buterin proposes base confirmations, a system where users can pay extra fees for immediate transaction confirmations, with penalties for Ethereum proposers who fail to include these transactions in the next block, ensuring reliability and incentivizing faster processing.
These proposals come at a crucial time as the market anticipates the approval of an Ethereum spot exchange-traded fund (ETF) in the US. Improving transaction speeds is vital for maintaining Ethereum’s competitive position in the market, which has seen a 1.24% increase in Ethereum’s price to $3,389 over the past 24 hours.
