CoinLink is always on the lookout for new sites related to numismatics, and especially ones that have the potencial to offer valuable new information to the collecting community. A recent article in the NGC Newsletter caught our eye. They profiled  Coin Society,  a new site which  just released an open beta at www.coinsociety.com.

Coin Society’s initial goal is to provide a transparent US Coin Price Guide built using an artificial intelligence engine framework that reads online coin transactions and classifies those transactions based on the standard catalog of  US coins.

Coin Society’s price guide is based on the final value of the last verifiable online transaction of any US coin by grading company and grade. Coin Society does not average prices or apply any algorithms to determine market price. Like the stock market, Coin Society’s prices are based solely on the last recorded transaction.

To find out a bit more about the site we contacted the founder David Simon, and asked him a few questions about himself, the web site and his goals:

Tell us a little about yourself, what you do for a living, etc.?

I’m the managing director of New London Associates www.nla.com, a software development firm in NYC. NLA works primarily in the financial services sector. I’m originally from Ohio and have lived in NYC for over 15 years. Married with a two year old daughter and another presently on the way.

I’m also the non-exec Chairman of SearchForce, Inc. http://www.searchforce.com which is a Search Engine Marketing management platform based in San Mateo, CA.

Prior to that, I was CTO of the Measurable Results group at JPMorganChase and was responsible for performance management across retail technology at the bank.

What is your numismatic background?

I’ve been deeply interested in the collectibles space for about 15 years and have been avidly collecting coins, sports cards and comic books for over 25 years. I started collecting coins when I was pretty young, my dad and grandfather got me into it, and by the time I was 19, I was buying NGC certified coins from Tom Noe at Vintage Coins around 1990. Over the years I’ve accumulated a pretty substantial coin collection.

What gave you the idea to start up Coin Society?

It really started with the idea of building a price search engine for the Internet back in 2005. I had done a lot of work on unstructured data and pricing systems at JPMorganChase and thought that a price search tab would be a welcome addition to the major search engines. It turns out the reason there currently isn’t a price search tab is that it’s a really hard problem.  One of the difficulties is that most of the data on the web is highly unstructured. Take eBay for example, all of the auction titles and descriptions are free form text, which is about as unstructured as it gets. Figuring out what someone wrote or worse, what they meant is really difficult for a computer.

About 4 years ago, I took a top down approach and built the first proof of concept of the price search engine which used off the shelf software. The top down approach involved crawling the web, grouping the data by category, using an artificial intelligence engine to cluster the results into like/same/kind and then report the prices. Well that didn’t work. The real problem was determining like/same/kind, especially when you get into collectibles. The amount of variation within a collectible category is staggering.

Just look at the all the VAMs in Morgan Dollars. Clustering AI is not useful when you need to be very specific about matching. Around that time, I went to a meeting at Google’s offices in NYC and met a couple of researchers who were working in the area of natural language. Natural language is a branch of artificial intelligence that converts samples of human language into things like parse trees and first order logic that are easier for computers to understand.

Using this approach I was able to build a custom engine that can read the titles and descriptions of transactions online and classify them into a price guide database. The first site built using this approach was http://www.t-206.com.

T-206.com is a price guide for the T206 tobacco baseball card set. This is the set that includes the elusive Honus Wagner card. The T206 set is difficult to classify because it spans three years, has 524 cards in the set without card numbers and most of the star players have a few variations of their card. Ty Cobb for instance has 4 cards in the set. Without card numbers and so many variations, the T206 set was a good way to test the technology and scale it up. Instead of trying to attack all categories in a top down fashion, I’m working from the bottom up on a category by category basis. Coins is the first full category.

What are your goals for the site?

To build the most reliable, transparent, up to date price guide for the U.S. and eventually world coin markets.

Obviously the Beta revolves around eBay auction prices, do you see the site expanding beyond eBay to other online auction sites and/or the more traditional numismatic auctioneers?

Yes, I expect to expand beyond eBay and am talking to a few of the larger houses about including their completed prices in the price guide. The goal is to have all of the major coin auction houses and dealers contributing completed transactions to the price guide.

Any plans to move beyond US coins to Ancients, World Coins or Currency?

Yes, all of those are in the plan.

What are your thoughts about the accuracy and relevance of existing prices guides for US coins, be it Greysheet, Numismedia, PCGS, etc.?

I think they are reflective of the current price trends, but don’t always accurately represent the market because they’re edited and therefore subjective. I think that their methodologies for determining price are somewhat oblique and as a result it’s hard to have confidence in them. If they say a coin is worth $200. and it’s consistently selling for $120. then the price really isn’t $200, it’s $120. Greysheet is geared toward the wholesale/dealer side of the market, so I think it skews in that direction.

I don’t know where Numismedia gets their prices from or how they compute them, so I can’t comment on them, and with PCGS, I’ve always liked their price guide, and they are pretty transparent about how they compute the prices, but as a certification company, I think they have a conflict publishing prices themselves.

And that’s really what we want to address with Coin Society, I want to be objective and fact based with market prices. Most of the auctions houses are pretty transparent and have historical auction prices accessible on their web sites. The one group that does an outstanding job in that regard is Heritage.

You really have to applaud their approach to price transparency — within the page for any item they sell or auction, they embed the historical prices. That’s a major step forward for the marketplace and for anyone who buys from them.

If you don’t have transparent prices, it’s impossible to have an efficient market and so any price on CS will always link back to the original transaction so you can see where it comes from

Where do you think CoinSociety’s price guide will fit in with the existing price guides available to collectors?

Coin Society should be a valuable addition to any collector, dealer or enthusiast who wants to better understand the value of their coins and the trend of the value. I don’t expect it to be a replacement to all of the other prices guides, some maybe, but on par, I think this will be a welcome addition to the market.

What do you think is going to be the biggest benefit to collectors by having CoinSoicety Price Guide available?

Transparent spot prices, updated daily, which makes for more informed buyers and a more efficient marketplace

To you intend to keep the site free or will it eventually become a subscription based service?

The price guide will always be free, as will some of the data feeds like Hot Sheet and Top Sellers. Eventually we may offer some customized services on top of that for a fee.

eBay has come under some criticism for it listing policies with respect to certified coins, in addition to changes in its feedback policy and what some consider to be its lax oversight of the sellers and material being offered. Any thoughts on these topics?

I think they’re doing the best they can. Yes of course it could be better, but given eBay’s size and the sheer volume of items listed, I think they do a pretty good job. They’ve recently improved the situation with Asian sellers who offer replicas, so there is some progress there. And anytime you have an online transaction where the site doesn’t take posession of the item, there is going to be fraud, no matter how good the feedback system is. eBay’s feedback system has facilitated in scaling their operation, but there just isn’t any panacea when it comes to solving the fraud problem.

Getting back to the site, how long has it been in development?

The technology has been in development for about 3-5 years and the Coin Society site since August of ‘08.

Have you been working with any dealers or auction companies in it’s development?

Yes, I’ve been working with NGC on getting our checklists right — they’ve also given us a lot of helpful feedback on features for the site.

What has been the hardest part about building the site?

Data integrity, making sure we have the right data, and classifying the data into the right bucket for the price guide. eBay has over 160,000 active coin auctions and BINs on the site at any given time. Most of those do not have even the most basic information we need for the price guide, so it’s garbage in, garbage out. Getting the price guide accurate is the hardest part though.

When do you expect o come out of Beta?

In the next few months.

What single thing would you want to accomplish to consider the site a success?

We’re working on a portfolio tool for the site so you can store your collections and track the value of your coins over time, having that portfolio and our market data be the de facto standard in the industry for valuing coins would make this a huge success.

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