It has never been easier for tech startups to raise capital. With Ethereum and other platforms making ICOs and token sales relatively simple, project teams no longer need to go through the highly competitive process of getting funding from venture capitalists.
On the one hand, this democratization of investment can help accelerate innovation and distribute wealth. On the other, it has led to a flood of potential bad actors and misinformation into the cryptocurrency market.
Many people in the blockchain space like to point to ideological reasons for supporting the development and proliferation of cryptocurrencies. The argument is that decentralized systems are more secure and less susceptible to corruption.
Decentralization can improve the way we transact, interact and live. For instance, blockchain projects that aim to fight censorship can improve human rights on a global scale. The list of benefits can go on and on.
Ultimately, though, there’s no escaping the fact that the cryptocurrency space isn’t so pure itself. Of the more than 4,500 existing cryptocurrency projects, hundreds are outright scams meant to deceive investors. Hundreds, or more likely thousands, of others are destined to fail for the same reasons that two-thirds of traditional businesses fail within 10 years.
The biggest problem of all is that cryptocurrency investors are financially incentivized to promote their investments.
As a result, some blockchain projects have been able to gain multi-billion dollar market caps before even having functional products. That’s not meant to say that those projects can’t still succeed, but rather this illustrates just how different blockchain startups are from traditional startups that try to attain funding from venture capitalists.
For investors, the question then becomes:
How can we see beyond the marketing, hype, and big promises in order to analyze the value and potential of the underlying product or service?
There are some basic safety precautions each individual can take to reduce their personal likelihood of investing in a scam. But what about taking it a step further?
How can crypto investors vet these blockchain projects as thoroughly as venture capitalists vet the businesses they get pitched?
The goal is to go far beyond just separating the scams from the well-intentioned projects. The goal is to be able to determine with a high degree of confidence which projects are actually built to succeed.
PredictionVC has effectively gamified much of the process used by venture capitalists and hedge fund managers in order to apply it to cryptocurrency investing. Their aim is to build a community of investors that can make well-informed decisions based on contributions from the most talented researchers, traders, data scientists, and developers.
In the cryptocurrency game, data is an investor’s best friend. Without the experience of a successful venture capitalist or the opportunity to meet project founders face-to-face, data is our most useful tool for seeing past marketing hype and ambitious whitepapers.
Unfortunately, transparency is not as common among blockchain projects as you might expect given that it is a key tenet of decentralization. As a result, even the most diligent investors often have to act on inaccurate or incomplete data. Not to mention the fact that they must spend an immense amount of time searching for information and sorting the reality from the hype.
PredictionVC has developed a 2-layer system to make the investment process more efficient and effective.
In the first layer, PredictionVC utilizes their own data streams and a unique AI application, named Albert, in order to make predictions about the market.
From the PredictionVC website FAQ:
Leveraging the world’s most comprehensive cryptocurrency dataset, Albert uses its knowledge to autonomously score and make predictions on cryptocurrency investment opportunities. Albert works alongside our community of investors, data scientists and algorithmic traders to continuously improve its performance.
On its own, the first layer can be a highly effective investment tool. What truly sets it apart from other tools on the market, though, is the second layer of the solution. Here, PredictionVC applies Gamification Mechanics in order to produce incentive structures that reward platform contributors for research-related actions including data curation and analysis, investment research, data science, and bot development.
They also have 4 leaderboards to categorize and rank contributors in the community.
Data collection is a time-consuming but essential part of the investment process. They have created a more professionalized approach to cryptocurrency investing. Investors can access token datarooms that incorporate the typical files that investors should have easy access to including incorporation certificates, token sale agreements and security audits, to name just a few.
Community members can then analyze all the token data and associated files to create strength and weakness statements or upvote on statements left by other members of the community.
The Researchers Leaderboard incentivizes community members to add missing files to the data room, create strength or weakness statements, or vote on analysis performed by other researchers. In return, they receive tokens for their contributions.
Not surprisingly, paying users for their research creates positive results. So positive, in fact, that PredictionVC’s data portal has already grown into the world’s largest and most comprehensive dataset on the cryptocurrency market. The portal consists of 10,000 blockchain team members and includes data on 4,000 tokens.
Traders within the PredictionVC community are automatically included in the Traders Leaderboard, where they can earn monthly token payouts based on their relative performance.
While many inexperienced traders take their cues from what they read on Twitter or Discord, the PredictionVC approach is significantly more scientific. Traders can sync their portfolios to their PredictionVC profiles by connecting exchange accounts and wallets, allowing them to better analyze their own trading performance and make more informed decisions in the future.
Moreover, trading data is shared with the community on an anonymised basis, such that all participants are able to learn from one another’s successes and failures.
The Traders Leaderboard helps traders improve on an individual basis through self-analysis and simultaneously creates a collective intelligence to help the entire community learn and improve.
The PredictionVC team is currently developing a Trading Bot Leaderboard that rewards top performing trading bot developers with monthly payouts in the same way as human traders are rewarded.
Quant traders and bot developers will gain access to extensive data and indicators through the PredictionVC API in order to experiment with different trading algorithms. Each bot variation a developer submits will be ranked on the leaderboard after undergoing backtesting to evaluate financial performance.
From there, the most successful variations will be incorporated into a master trading bot that can be accessed by paying members.
At the end of the day, data is only as useful as your ability to analyze it. That’s what makes the final piece of the PredictionVC platform, the Data Science Leaderboard, perhaps the most important.
PredictionVC employs deep learning LSTM-based (long short-term memory) recurrent neural networks in order to analyse more than 50 data signals and indicators. On top of past price action, these algorithms will factor in trading data from the Traders Leaderboard, weighing each trader’s actions based on their position across the other three leaderboards.
Successful traders have probably had a friend or two (or ten) ask if they would be willing to trade with other people’s money. The typical person simply doesn’t have the time, skill, or knowledge to be consistently profitable as a trader. Actually agreeing to such an arrangement is a highly risky proposition for reasons that should be obvious. But the idea has some merit to it.
Through the Data Science Leaderboard, PredictionVC’s automated trading bot (a feature that is in their development plan) will be like that friend that others trust to turn a profit with their money more than they trust themselves. And why wouldn’t they? It uses collective human insights and substantial data streams to produce accurate forecasts about token prices that no human being alone can hope to keep up with.
What’s more, the Data Science Leaderboard incentivizes participation like the other leaderboards, with monthly token payouts based on how successful each individual contributor is. This model promotes continuous improvement as a result of an increasing amount of data and by attracting more and more talented data scientists to participate.
Users will be able to gain access to PredictionVC’s various investing and trading tools through a tiered membership program paid for with PredictionVC ERC-20 tokens.
Users will be able to purchase the Oracle token directly on the PredictionVC platform. Each month, top performing community members will receive Oracle token payouts based on their positions across the 4 community leaderboards. The exact details of the tokenomics including total token supply will be released shortly in their whitepaper
As more investors and traders seek access to PredictionVC’s valuable data, prediction scores, and trading bots, demand for the tokens will naturally increase. As a result, it is expected that the price of Oracle will increase so long as demand for their token price predictions and underlying raw data increases.
The cryptocurrency market is still in its infancy compared to other major asset markets. It’s clear that there’s a long way to go for the market to start behaving more rationally, and it’s not likely that enthusiasm and hype are going to stop fueling highly speculative investments any time soon.
Intelligent and data-based approaches like PredictionVC have an important role to play in the development of the cryptocurrency market over the coming years. Ultimately, this is an opportunity to gain an edge over the competition in the risky yet potentially most lucrative market we’ve ever seen.
To check out the PredictionVC platform for yourself, visit the project’s website and sign up for free.
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