Vitalik Buterin Says Prediction Markets Find 'Truth' Faster Than Social Media

Ethereum co-founder Vitalik Buterin is pushing back against claims that prediction markets are inherently immoral, arguing that they can be more reliable tools for finding truth than social media. In posts on Farcaster, Buterin said critics often focus on the discomfort of wagering on real-world events, but miss what he sees as the larger comparison: platforms where sensational takes can spread with little accountability.

Buterin argued that social media rewards the loudest, scariest claims—especially during crises—because attention can be monetized quickly, even if the prediction turns out to be wrong later. Prediction markets, he said, flip that incentive structure. If someone makes a bad call, they lose money, and over time the market becomes more accurate by punishing weak information and rewarding better judgment. He added that markets also display uncertainty more honestly, expressing probabilities instead of absolutes.

He pointed to personal examples of reading alarming headlines and then checking market odds to gauge how likely an extreme outcome really was. When the probability was low, he said, it helped him stay calmer and interpret the situation more realistically.

Buterin also claimed prediction markets can be “healthier” than traditional financial markets because prices are capped between 0 and 1, reducing bubbles, hype cycles, and manipulation dynamics that can dominate assets with unlimited upside.

The debate turned heated when Quilibrium founder Cassie Heart criticized the idea of markets tied to human suffering, arguing it fuels public backlash against crypto. Other commenters countered that governments and institutions have long used forecasting mechanisms, and that broader access simply expands participation.

Despite the ethical fight, prediction markets are spreading fast. Google Finance has begun surfacing probabilities from platforms like Polymarket and Kalshi, while major firms and exchanges are escalating legal and regulatory battles over who should oversee the sector. The CFTC has also issued no-action relief to several platforms under conditions such as full collateralization and transparent transaction reporting.