Prediction markets are platforms where individuals can buy and sell contracts based on the outcome of future events, such as elections or sports games. Participants use their knowledge and insights to speculate on these outcomes, and the prices of the contracts reflect the collective beliefs about the likelihood of each event occurring. These markets operate similarly to stock markets, where the value of a contract increases or decreases based on how likely the event is perceived to happen. Prediction markets can provide valuable information and forecasts, as they aggregate diverse opinions and data from many participants, often leading to accurate predictions.