Reimagining Prediction Markets for Civic Economies

By Iskander Smit in weeknotes — Feb 25, 2025

This week, there are two new models to reflect: Grok-3 and Claude 3.7. And much more from the news. And thinking about prediction markets for value relation flows.

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Weeknotes 328 - This week, there are two new models to reflect: Grok-3 and Claude 3.7. And much more from the news. And thinking about prediction markets for value relation flows.

Hi all!

The disconnecting of the US and Europe is on schedule, at least if you have the perspective of certain politicians. #notfunny. We have to wait where it ends. To bring it home to tech and society, the new release of Grok is childish (Elons’ AI tool for personal competition with Sam Altman) and dangerous at the same time…

What did happen last week?

The usual mix of research activities and conversations with interesting people to discuss current and future projects. The update on DiSIL (Digital Social Innovation Lab) delivers some new cues towards potential partnerships. And the lecture organized by the VONK innovation center of the City of Rotterdam made me acquainted with the work of Flemish philosophy scholar Ignaas Delvisch. His claim, in short, is to embrace “deliberate ignorance” and “orchestrated dispute” as an antidote for disinformation in our filter bubbles. The audience was mainly civil servants and connected networks. We are equipped for better citizenship, but we use our capabilities to break it down… Food for thoughts.

Sensemakers took a different approach, showcasing synthetic media’s state of the art: “When all content is fake by default, context is key.”

What did I notice last week?

What are the main stories? The longlist was longer than usual, but I tried filtering (did not succeed completely :) .

In the AI domain: Grok-3 introduction, with benchmarks that promise to be on par with other models; however, not for all functions. The number of models keeps growing, so it is interesting to see if this will continue or shake out soon… For now, it will first become political; Grok is filtering out results on misinformation of Elon and Donald.
Anthropic launched Claude 3.7, and based on the reviews by Ethan Mollick and Nate B Jones, it is a good and new generation of AIs.
AI can create lock-ins, as it is free to use—even more than earlier technologies. This is especially dangerous as AI becomes an essential weapon for creating empire states (not my words, scroll down for the articles).
Also, the Humane Pin received a lot of attention, but it has been discontinued (or sold for little money to HP, at least), and devices will soon be bricks. Did it get a fair chance? It was a bad offering, for sure. A well-designed, deconstructed connected device might be needed to fulfill the changing needs of agent-supported humans. Not sure if that will be the “Thinking Machines” the former CTO of OpenAI is aiming for with her new company.
Robots are more and more happening. Still, mainly the humanoids that dominate the news, the least interesting category, imho. It apparently will be a multi-trillion market.
Also, there is some news on the immersive connectedness with Apple adding Matter to robot vacuum support.
AI and AGI is part of tech and geopolitics all over. And Microsoft is debating on Quantum.
Congrats to Matt for 25 years blogging. Check his looking-back post.

Triggered thought

I had to think about the concept of “Vibe coding,” the result of using coding tools based on generative AI that becomes more and more accessible to non-coding people and creates the opportunity to really start to program one-user-focused programs, apps, etc. This has already been foreseen as a future trend for years, but only for coders. I think this might be a possible interesting angle for combining Apple Intelligence with Script Editor, one of the next OS finally lets you create your personal app based on atomic services that the current app makers offer.

This vibe coding was discussed in the Hardfork podcast last week, and it was a rich edition again. The second part was an interview with Vlad Tenev from Robin Hood. This financial trading platform revolutionized trading with no fees and is extending its services to all kinds of services for the “gambling society,” as Kevin Roose of Hardfork framed it. I had to think about something else when Vlad mentioned that connecting prediction markets to real-world values is impossible. What if these prediction markets are redesigned to service the civic economy?

Reimagining Prediction Markets for Civic Economies In the research into connecting civic economies to protocol economies, concepts like decentralized autonomous organizations and protocol-based governance are popping up. Here, prediction markets offer an interesting angle. Traditionally, these markets are used to forecast outcomes and inform investment strategies. However, what if we could harness their power to predict and shape community dynamics?

Imagine a neighborhood where prediction markets don't just forecast resource needs but actively contribute to decision-making processes. These markets could help anticipate energy consumption patterns, optimize shared mobility resources, or even predict the demand for knowledge-sharing services among neighbors. By doing so, they would transcend mere financial transactions to become engines of community organization and resource allocation.

The true innovation lies in using prediction markets to map and influence social relationships within a community. Instead of focusing solely on economic outcomes, these markets could track changing dynamics between neighbors, assess community satisfaction levels, and guide decisions that enhance overall well-being. Variables such as comfort, safety, and social cohesion could become integral parts of these civic-oriented prediction markets.

This approach transforms prediction markets from purely transactional systems into tools for understanding and strengthening community bonds. It's a shift from predicting market outcomes to forecasting and shaping the intricate web of relationships that form the foundation of thriving neighborhoods.

While challenges remain in implementing such systems, the potential for creating more responsive, efficient, and socially aware civic economies is immense. By reimagining prediction markets in this way, we open up new possibilities for community-driven decision-making and resource management, potentially revolutionizing how we approach urban planning and community development.

What is the paper of the week?

I mentioned before how The Syllabus newsletter from Evgeny Morozov is a great resource for papers, especially in tech & politics. This one shared this week seems like an important read: Arms Race or Innovation Race? Geopolitical AI Development

China, the United States, and the European Union have spoken of a global competition surrounding Artificial Intelligence (AI). There is widespread talk of an ‘AI Arms Race’. But what is the nature of this race? We argue that the arms race metaphor does not capture the dynamics of global competition in the AI sector. Instead, we propose the notion of a ‘geopolitical innovation race’ for technological leadership in a networked global economy.

Schmid, S., Lambach, D., Diehl, C., & Reuter, C. (2025). Arms Race or Innovation Race? Geopolitical AI Development. Geopolitics, 1–30. https://doi.org/10.1080/14650045.2025.2456019

What are the plans for the coming week?

Not so much planned as public events to share here. The Planetary Civics of Dark Matter Labs might be something to check (between other meetings for me) (program in this PDF).

Next week Tuesday evening, I will host another Wijkbot workshop in Amsterdam, at The Social Hub Wibautstraat. You can join for free with the code Citiesofthings100 (a few places). I will test the latest improvements of the “Robo-perspectives Kit” and build upon the results from the workshop I did last October at Society 5.0 Festival.

See you next week!

References with the notions

Human-AI partnerships

Grok-3 is here. And the number of models are growing and growing. When will the fallout be? Ethan Mollick sees it as a new generation of AI, along with Claude 3.7.

Deep research is the new black, we already mentioned in earlier editions. But is it useful for all?

Multi-stakeholder AI is now possible with the agents collaborating. To follow the model of scientists building knowledge. Or Freelancers working together.

AI lock-in with free tools.

What the Thinking Machines will do is not yet fully clear, but the founders are well-known as former OpenAI management. And what will these machine learn about us?

Robotic performances

Humanoid robots are advancing quickly and could create a multi-trillion-dollar market, especially in manufacturing and logistics.

Delivery bots are silently expanding.

And more in general, will we be shifting to the new balance of humans and machines?

Immersive connectedness

Humane is now back to the future.

With this type of device, I always have to think about Kevin Kelly's prediction that everything will become a screen. A connected screen experience may be better…

Haptics as immersive experiences.

Tech societies

AI censorship. And new empires build on AI. What if the backdoors are opened on OS level?

Creativity and AI. And creative AI.

Is AGI near or not? Microsoft CEO downplayed expectations. Because of the technology or to keep the playing field open. Intel thinks that the PC will be AI-device by default.

Quantum is next. MS claims the progress. But others are not convinced...

This long read, with lots of data, proves that the AI revolution lacks solid grounding. Maybe combine it with the 101 of AI for tech executives by O’Reilly

And more

I am not sure how long this blog exists, but not 25 years. Congrats Matt, and thanks for this exploration while looking back on the topics and the role of the blog for his thinking.

If you like to work in Severance mode: