The data you work with from Nunerai is obfuscated, so you can't take it directly to the market.

It is an interesting no-risk way to evaluate models/algorithms. A lot of people are there to learn on a tough problem.

Edit: The reason for the coin is to allow data scientists to give confidence information about their models. There is an additional payout in USD associated with NMR staking (currently an extra ~$4000/mo for the most consistent models).

Do you have another way data scientists can give estimates of their model's ability to do better than chance and be held accountable for that estimate? Additional prize pool based on giving good reliability estimates seems like an excellent way to do it.

The tokens are not the value of the numerai fund itself. They are merely a tool for the staking process.

Oh, it is entirely clear what it gains.

Cryto currency backed equity is just free money that you don't have to pay back if things go south.

There are basically zero protections for the "investors". Numerai could just walk away with the money and they'd probably get away with it.

Why wouldn't you turn down free money that the market is throwing at you?

This single line, appended to pretty much anything, describes the latest crowdfunding fad of cryptocurrency or token ICOs.

This is the fundamental break down in proposals like this (Numerai, Quantopian, etc).

For anyone who can consistently generate alpha, why bother with a crowdsourced model? They can just go join any one of the hedge funds that will pay half to several million each year in compensation for that acumen.

I'm not saying someone is going to do well and leave with the data. I'm saying anyone who can do well should probably just participate in the real market.

And as another point, Numerai lacks entire categories of data outside the conventional "core financial" that is useful for finding alpha.

Sure. Now go get "transparent data"...oh wait, that's also time-consuming (and much less interesting). That's why, if one doesn't have to search for tradable data, it might be interesting to validate a signal/strategy on data that someone with stake says is tradable.

Agreed that if one starts making numerai money with numerai data, one should definitely go get some transparent data and start trading it. Trouble is, now one doesn't know what transparent data one has actually learned, so it's hard to know what to go and spend time on trading.

At that point, though, (I guess this is the theory, at least), numerai presumably know that one has a good signal, and one also knows one has a good signal for something, so both parties know that one's signals are valuable. That should be enough to get one a job at a place that does have good, transparent data.

Worst case scenario you get some "free" money and some other people you don't know get rather more money out of it.

The main point, though, is that data scientists don't have to sell the coin. They can stake coin against their models to earn additional USD. If their model performs better than chance, then they get their NMR back to stake the next round. If they are also competitive wrt confidence in their consistency then they also get some additional prize money that is only available to staking participants.

If they are overconfident and do not do better than chance then the coin they staked is destroyed.

All these cryto ico things are premined or centrally allocated in a way where they get a cut. If you have access to the printing press, then you make all the money, no matter what happens with the currency.

Sure, maybe they gave away some of the coins to datascientists, but I am sure they kept a healthly cut for themselves.