As I am constant on the lookout for new opportunities, networks and protocols, I recently came across numer.ai.

DISCLAIMER: I an not being paid (wishful thinking) to invest in numer.ai, nor this post is an investment advise. Only invest in what you can loose and do your homework before getting into any cryptocurrency and/or service/network or protocol. Just sayin’

Numerai or numer.ai

Applying the Mark Twain test to numer.ai, can you describe what this new protocol does in simple words? From their social profiles this is their own explanation;

“A new kind of hedge fund built by a network of data scientists”

More in dept explanation;

Numeraire(NMR) is a cryptocurrency rewarded to data scientists who compete in a tournament to develop algorithms to predict and profit off of market trends. It is currently available for speculative purchasing on Bittrex.com, paired with both Bitcoin and Etherium.

Applying my second rule of signaling a new/disruptive protocol; Is this a new protocol or competing with other existing protocols?

Well numer.ai seems to be fairly stand alone at this point.
In the recent period Numerai received multi million dollar funding by ‘tradition’ funding/seed rounds [^1].

Founder https://twitter.com/richardcraib has the strong believe tech machine learning experts may be able to build better predictive models for stock markets than ‘traditional’ institutions with finance backgrounds.

Let break the Numerai protocol down in simple words.

How does numer.ai work?

In order to participate in Numerai you obviously need an account. You can signup here at https://numer.ai/

Numerai uses data from 12,000+ data scientist to produce quality stock market predictions. In their own words “achieving breakthroughs in stock market prediction accuracy.” They claim building the largest ensemble of stock market machine learning models in the world.

The protocol runs on the token Numerai (NMR) and started trading on bittrex BTC->NMR as of from 23rd June 2017.

You can participate in weekly tournaments. During these periods you can download the data and do your analysis. Then upload your predictions back into the protocol, and combined as a whole the complete pool benefits from your work on the data.

Currently they are at tournament 61, and in the dashboard you can find previous tournaments and their performance.

Traditional hedge funds trading vs Numerai?

I am by far an financial expert or have any knowledge on trading/investing other than reading/accumulating resources online. The one thing that struck my mind when reading about Numerai is the similarity to ‘traditional’ broker such as Optiver. I have been reading about Optiver automated trading processes, where there is no human interference. Based on mathematical calculations, stock value, history and predictions systems make decisions in milliseconds for a maximum gain on the initial investment. I can only assume companies such as Optiver also operate under machine learning conditions.

NMR Token development

The Numerai (NMR) token became available on Bittrex as of from Friday 23rd June 2017. Started trading at ~USD35 and currently available for purchase at ~USD85. The recent 24h has created a massive trade volume for NMR of over ~USD32M+, that indicates a growing awareness for the protocol.

Currently on JUNE 25th 12PM, looking at Bittrex trading for NMR. The ASK is about ~8 times higher than the BIDS. As from my basic understanding of trading that translates in a high demand for NMR.

More on Numerai

If you want to know more about Numerai, please look at the following articles.

_A Wired article on Numerai https://www.wired.com/2017/02/ai-hedge-fund-created-new-currency-make-wall-street-work-like-open-source/
_Current NMR Market cap on https://coinmarketcap.com/assets/numeraire/
_A detailed FAQ on https://github.com/numerai/faq/wiki
_The official Numerai website https://numer.ai/
_Articles and background information on Medium https://medium.com/numerai

Are you in or out?

Please share your thought on Numerai, looking forward hearing what you think of this protocol and its potentials.

As always,
Thank you for reading!
Sander

[1]: https://techcrunch.com/2016/12/12/numer-ai-is-a-crowdsourced-hedge-fund-for-machine-learning-experts/ “TechCrunch article”