3 ms·
The Theranos Implosion and Robert Shiller on Short Selling and Complete Markets
- gwern 10y agoOne of the possibilities of decentralized prediction markets is for completing markets and bypassing current markets. In this case, it's not even about avoid regulation, it's that you simply can't find anyone with Theranos stock who will lend it to you for shorting, and if you could, the pseudo-price would be so unreliable and pumped up that you wouldn't want to (all the VCs agree that Theranos is great and their shares are not down from the previous round - right up until Theranos goes down in flames). If you can short a stock normally, great, no need to bother with Ethereum or Bitcoin; but you can't buy or short Theranos on the normal markets... though you can set up a prediction market on a Theranos-related question like whether it will IPO or whether Fortune will continue to rank Holmes as a billionaire etc.