Introduction to Cindicator (CND) Part 10

Cindicator and politics, management of investments and assets

 

Just like big corporations can use Cindicator platform to collect all kinds of data within an organization, political organizations can use Cindicator to collect the data and predict outcomes of political events. This has already been done in projects such as the Iowa Electronic Markets, that students at the University of Iowa have started in 1988. The market operates similarly to the markets of futures and allows to buy and sell bids about future political outcomes and predictions of economic indicators. The difference between the Iowa Electronic Markets and regular stock markets is that IEM is a non-profit venture that exists for educational and research purposes. Here is an example of an actual contract that traded on IEM in January of 2007 for USD$0.522: a payout of $1 if the nominee for the Democratic Party of the United States wins the popular election in the 2008 U.S. Presidential Election and a payout of $0 otherwise.

When buying such a contract, the buyer has a number of options. The first, most obvious option, is to buy a contract and simply wait until the results of the election come in. If the Democratic candidate wins, the buyer of the contract receives a profit of USD$0.48 per contract. If the Republican candidate wins, then the buyer of the contract receives nothing and loses USD$0.522 per contract. The second option is to buy the shares and sell them at a different price some time before the election. If the later polls indicate that the Democratic candidate has high changes of winning, than the price of the contract will go up and there will be no need to wait until the election if the buyer of the contract wanted to lock in the profits. The Iowa Electronic Markets have been predicting the outcomes of the United States Presidential elections with a great accuracy, which is a fact that yet again shows how wisdom of the crowds can deliver impressive results.

 

Cindicator and markets

Undoubtedly, stock exchanges are still the main area of research and use of the combination of human and artificial intelligence because traders have to make hundreds of decisions about buying or selling every day and these decisions are directly linked to the financial profits and losses of the traders.

In a way, financial markets are the place where traders and analysts trade their predictions every day. When somebody is buying a stock, they believe that the stock is going to be worth more in the future than it is worth today. When someone is selling stock, they believe that the price in the immediate future is going to be less, otherwise they would have waited and sold the stock for more.  Because the profits from the predictions of the stock prices can be so large, traders and analyst typically spend significant amounts of money on research and data. For example, according to some estimates, in 2015 traders have spent over $50 billion on services and data that could potentially help them make better trading decisions. Out of the $50 billion, they’ve spent around $4 billion on predictive analytics services and it is estimated that this figure will grow six times by 2020. The market for data and services for non-professional traders is also huge with over 50% of adults living in the United States having purchased stocks at least once in their lives. In China, this number is equal to 30%. Because of the cryptocurrencies, the number is expected to grow even higher.

 

How does Cindicator work?

Cindicator ecosystem contains millions of truly independent decentralized predictions, all of which are then processed by artificial intelligence. The members of the ecosystem have an option of giving predictions on a regular basis and the artificial intelligence element of the system uses individual predictions and historical trends to continually learn and improve its approaches. The Cindicator platform learns all the time and changes its models by adjusting various parameters and weight factors.

On the platform, participants can make daily predictions about a variety of indexes, including prices of different assets and macroeconomic numbers. Right after the window to submit answers closes, the artificial intelligence system analyzes the answers based on a number of factors, including historic trends and histories of individual answerers. Then, Cindicator artificial intelligence models calculate weights for individual answers, factor in error probabilities and come up with the final answers.

Here are some of the actual questions that experts had to answer on the Cindicator platform:

– create a forecast for the minimum and maximum price of a certain cryptocurrency for the next 30 days

– Will the stock price of Apple go beyond point X during the open market times on Thursday?

– According to the next US Employment report, will the unemployment rate be higher or lower than 3.9%?

– What is the probability that President Trump will get impeached in the next six months?