Hedge fund Numerai’s unique AI crowdsourcing token and the crazy world of crypto-economics

Numerai is a hedge fund that’s using technology to create an unprecedented network effect, and transform the way money is managed. Crowdsourced investment strategies are many and varied, but Numerai crowdsources machine intelligence in a totally unique way by supplying its network of data scientists with encrypted data on which to test their machine learning models, thus removing any bias attached to the application of the algorithms. These models are entered into a monthly tournament and the best ones receive a pay-out. This was previously done using Bitcoin (because it was efficient and more anonymous than PayPal), but more recently Numerai launched its own token, Numeraire (NMR), on Ethereum, the public blockchain which has spawned a multitude of trustless, decentralised applications. The aim of the token was to create more value for Numerai’s growing network of scientists, and further align them with the collaborative goals of the project. NMR tokens were not sold like a typical initial coin offering, but rather 1.2 million of the tokens (a cap of 21m has been stated) were distributed via smart contracts on Ethereum, only to participating data scientists. Token insanity On the eve of the token distribution, Numerai founder and CEO Richard Craib…


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