Technical architecture for prediction markets
By Rob Knight on Monday, March 9th, 2009One key question for the Wisdom Hive project is this: what is the best way of implementing a prediction market given the technologies available to us? Most of the answers to this question are obvious and even quite conventional, but it’s worth examining the question - and the answers - in more detail.
First of all, what requirements does a prediction market have?
- Some form of data storage, to store the current state of the market and its participants
- Some interface by which that state can be altered
- A means for participants to discover the state of the market and observe changes
- The means to create new markets and share them with others
- To achieve all of the above using open standards
The first requirement is easily handled by any kind of database, though we might return to the specifics later. The second requirement is where things start to get interesting, especially as the decision here will also determine the decisions made for the third and fourth requirements.