The Chaos Machine, by Finn Brunton

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September 2026 Issue

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The Chaos Machine

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Prediction markets and the triumph of crypto-anarchy

by Finn Brunton ,

Illustration by John Provencher

At first, the emails were polite. Strangers wrote to the Israeli journalist Emanuel Fabian about his reporting on an Iranian missile strike on March 10. They were requesting clarification and an update: Was it a missile or the fragments of a missile interceptor? It was a missile, Fabian replied, as confirmed by the Israeli military and a video of the massive explosion in the city of Beit Shemesh. More messages came: You must be wrong, they read. You are spreading inaccurate information. Could you clarify in print, please, that these were in fact interceptor fragments? Within hours, the messages became more urgent. One was accompanied by a screenshot of a forged email, credited to Fabian, claiming that the incident had not been a missile strike and that his story would be corrected accordingly. More messages arrived over Discord, X, WhatsApp, and even from a colleague who had been asked by a friend to see whether Fabian would correct his story to say that the explosion had been caused by interceptor fragments. Within a few days, he started receiving messages that threatened him and his family: “After you make us lose $900,000 we will invest no less than that to finish you,” one read.

Fourteen million dollars were riding on whether Iran would strike Israel on March 10, and interceptor fragments didn’t count as a strike, according to the terms on the prediction platform Polymarket. Fabian’s reporting put him in the crosshairs of strangers who had wagered fortunes on the subject matter of his article. “Believe me,” another message warned him, “you don’t want to be their target.”

Fabian’s story is one among many examples of attempted market manipulation and insider activity on Polymarket. One $32,000 bet on the U.S. ousting of Nicolás Maduro was placed mere hours before President Trump announced it; the bettor collected $400,000. (A U.S. soldier was arrested in April in connection with the wager.) Another bettor won nearly a million dollars for correctly identifying twenty-two out of twenty-three of Google’s top search terms for 2025. (The same user previously won $150,000 by predicting the surprise release date of an update to Google’s Gemini AI model.) Someone won more than $500,000 with a successful bet on the timing of the death of Ayatollah Khamenei, Iran’s supreme leader, shortly before he was killed by an Israeli air strike on February 28. Another won more than $16,000 by making seventeen successful guesses about who would and would not perform in the Super Bowl LX halftime show, hours before it would begin. One bettor even allegedly used a hair dryer to change the temperature being recorded at Charles de Gaulle airport to win a bet about the weather.

Polymarket accounts, like those on the other major prediction market of the moment, Kalshi, are not tied to one’s identity. A user can place bets using an anonymous crypto wallet. They can create multiple wallets to hide the signature of insider knowledge: seven or eight anonymous speculators each getting one improbable guess correct is less suspicious than one person nailing them all. Many bettors use nonsensical pseudonyms or random strings of letters and numbers for their aliases.

Anonymity, manipulation, profiting from secrets, threats of violence: all of this was predicted decades ago. The rise of prediction markets is the story of two men—contemporaries and occasional correspondents—with shared interests and profoundly different visions. One wanted to build a machine to encourage a collective understanding of reality; the other a machine to dissolve trust. One envisioned a tool for effective governance; the other a weapon against it. The strange tragedy of prediction markets is that they are widely thought to facilitate the former vision but are better understood as succeeding at the latter. Analyzing the stories of these two men will help us understand not only how we got here but what the future of prediction markets holds for us—and how much worse things could become.

The economist Robin Hanson is what Isaiah Berlin would call a hedgehog: someone whose work can be understood as a single grand idea. Hanson’s is prediction markets. These are not in themselves his invention. Formalized open betting and oddsmaking are at least several centuries old. People have bet on the next president and the next pope, on war and on peace. The financial-services industry has always been an indirect and noisy prediction market for relatively narrow topics. Markets exist for the supply and demand of commodities today on the basis of forecasts, estimates, and probabilities. (The ancient Greek philosopher Thales secured the hire of olive-oil presses in winter based on his prediction that there would be a bumper crop in summer.)

Hanson’s concept was to...