Approaches to Evaluating the Function of Prediction of Decentralized Applications

Abstract

Is the distributed ledger technology able to predict the capital asset prices and digitizes any financial market participant? Prediction is a scary and tempting place to venture, profitable trading and the development of effective strategies. Will predictions fit into the everyday practice of financial markets? Is blockchain technology capable to revolutionize predictions? Is the blockchain able to compensate of the lack of individual intelligence in assessing market prospects? In the article, the authors do not so much raise these questions as they try to outline the directions for their solution. Financial inclusion is one of the problems that blockchain technology can solve, if it is applied properly. Transferring predictions to the online mode and providing each market participant with the opportunity to digitize their activities would help introduce new efficient mechanisms to improve performance of financial market practices. The article discusses two aspects of using blockchain technology in finance - forecasting financial markets using “collective knowledge” and digitizing assets of market participants based on blockchain. The article also raises the question of the possibility of using some fundamental physical laws for analyzing the impact of new technologies on the financial markets. An attempt is made to approach the assessment of the prospects of using a number of decentralized applications for financial market predictions and the creation of digital counterparts of market participants. A fundamental lesson from experiments in predicting financial markets and digitizing market participants is that decentralized solutions are still not sufficiently scaled and, as a result, are used by consumers.