Numerai Hedge Fund Launches Erasure Crypto Stock Price Prediction and Betting Market
Numerai Crypto-Powered Stock Betting Market to the Public
The public and professional stock brokers can now predict stock market price and either win or lose their money, thanks to the launch of Numerai 's blockchain-powered stock betting platform, Erasure.
The Erasure was recently made open to the public although it was created in mid-2017. At the time the company only distributed its "numeraire" tokens to data scientists, said founder Richard Craib.
But the launch of Erasure to the public means that anyone around the world can buy a prediction thereby attracting hedge fund to the platform.
Erasure – Powered by the Ethereum Blockchain
On the Erasure platform which was built on the ethereum blockchain, all users have to do is purchase the numerate tokens to bet on predictions of a particular outcome. If the outcome favors the user and comes true, the user wins the staked tokens and profits, and if otherwise, the user loses their stake.
Mr. Craib speaking about the platform said,
"They can look at the performance and metrics and other measures and show that the models that get staked perform far better than the models that don't get staked because people who stake have some skin in the game."
Erasure being made public opens the window for data miners and scientist to leverage their prediction or sell same to other users by showing proof that they have a history of correct predictions to date.
John O'Brien, a spokesperson for the company, explained that
"Today a data scientist can take Numerai's data, build a model, and Numerai will pay for valuable models and good work."
He added that,
"It's not just Numerai but every financial institution in the world, every hedge fund in the world … can look at this and say 'all these people are submitting predictions'. So, if someone says, 'Hey, Apple has an event today, their stock is going to be $250 by the end of the month … and I'm going to stake that, so if I'm wrong, I lose money.'"
With historical prediction data available on the platform, data scientists can build their reputation rather than by the hedge fund's instinct and baseless trust in the data scientist as previously done.
In the event that the data scientist does sell a prediction which winds up being incorrect, the hedge fund can destroy the user's stake, limiting the fund's risk and amplifying the user's.
That being said, the protocol does take steps to protect users' predictions. While historical data is publicly accessible, new predictions are hidden from the public – the only way to see it is to purchase the prediction. This ensures that those who make prediction are compensated for doing so.