Inkling - The Wisdom of the Crowd Returns

Mashable!

I love all this wisdom of crowds stuff. Communities, networks and markets - they’re all fascinating (far more interesting, in fact, than the non-social web applications that increasingly fall under the Web 2.0 umbrella). Although rarely mentioned, prediction markets like the Yahoo Tech Buzz Game and Smarkets are probably the best examples of the wisdom of crowds in action - and much closer to Surowiecki’s theory than Digg or Reddit. (And let’s not forget about opinion polling sites like Vizu.) So now we’ve got another prediction market to kick the tires on - Inkling is an überslick service that lets you buy stocks in all kinds of upcoming events. From the site:

Inkling is an online marketplace where people buy and sell shares in stocks representing what they think will happen in the future. The stock with the highest price represents what the “crowd” thinks is going to happen. Inkling does not use real money. Traders exchange the “Inkle,” Inkling’s imaginary currency. The Inkling approach will work for all sorts of stuff. Product features, sales forecasts, pricing, fashion, finance, personal use, the list goes on and on. Inkling has been designed to be easy enough for our moms to use, but satisfying for stock market gurus as well.

Techdirt points out that these fake-money prediction markets aren’t as useful as real-money markets - and of course this is true. People just aren’t as motivated to vote (or vote in the right way) when the currency isn’t real.

Meanwhile, real-money markets like Tradesports and InTrade are making megabucks on the back of crowd wisdom. So why don’t we see more Tradesports-style markets? Why can’t I buy stocks in Web 2.0 companies (and we’re not talking about BlogShares or AlexaDex)? The simple answer is legality - IANAL, but it seems that prediction markets would be classed as betting, leading to all kinds of legal headaches.