"I'd expect that the distribution of profitable to non-profitable algorithms that are currently being live-traded looks like a bell curve."
Maybe, maybe not. The overwhelming desire to stop/restart/tweak an algo when losing money is something you are not considering. Taking that in account, I would bet that most people who currently live trade have positive returns (those who lost money are no longer in the "live trading" set), and that those who still trade are lagging the market (SPY). Just a bet that Quantopian can issue data and metrics and confirm or disconfirm.
"Additionally, just because I'm curious, why is it important to you that algorithm writers be profitable or not? How is this affecting your ability to write an algorithm? "
It is not important to me PERSONALLY, but it should be important to QUANTOPIAN when allocating funds.
By definition, 99.99% of algo writers on Quantopian will not get an allocation, and most people here in the forums act like they deserve one. They act like naiive engineers and rocket scientists, recluse geniuses who don't know much about finance or Python, but learning either is a trivial task for them, since they are so bloody smart. In fact, what happens is that most of them are people who clone other's code and tinker with it until they find what they think is superior code. If Quantopian wants to prove or disprove this, they can issue one more metric - of the 90K people's algorithms, how many are cloned and tinkered with, and how many are based on brand new code? I speculate that more than 95% of the "algorithms" are clones, altered or unaltered.
So, Quantopian needs to control such behavior and test the candidates for allocation, and the candidates need to prove just how much they know about finance and Python. They need to prove that they are not cloners and copyers. If not Quantopian, then their backers (a real world actual hedge fund) should do it, and should test all of them like they are applying for a real life quant trading job.
Are the requirements I am proposing too strict or realistic for the Quantopian users or for the company itself? The question remains: of your 90,000 users, how many trade their own money on IB or RB using Quantopian? How many are beating the SPY? Thanks in advance.