I just finished Crowdsourcing by Jeff Howe, the definitive book on crowdsourcing, and although it was written nearly 4 years ago, I was really bowled over by key insights throughout the book. Crowdsourcing is more than just the design work or iStockphoto, there’s also an offshoot into the world of Crowd-predicting. Utilizing the wisdom of the crowds to predict anything from sports results, Hollywood sales or even Presidential elections, and it appears these prediction markets actually do a pretty good job of predicting the correct outcome. They’re not right 100% of the time (then again neither are the experts), but overall the Crowds can –and do–predict with great accuracy.

The premise of crowd-predicting is simple. Get a whole bunch of people together and then ask them to predict the outcome of a particular event, once each individual prediction comes through you then aggregate that information to get the final result. Proponents of crowd-predicting say this result often beats the ’experts’, and they have some data to back it up.