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Briefing
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- New Digital Currency – Unorthodox hedge fund Numerai issued 1,000,000 digital tokens, called Numeraire, to 12,000 data scientists to solve problem of competition and incentivize collaboration
- Numerai Background – New kind of hedge fund where artificial intelligence selects trades, enabled by thousands of data scientists that create trading algorithms using Numerai data, in exchange for bitcoins
- Current Competitive Structure – Produces less incentive for data scientists to involve other talented people, as they could be competition to earning winnings
- Numeraire Payout Mechanism – If trade succeeds in live market, scientists can get back their Numeraire and bitcoin as dividend, whereas if trade fails, Numeraire gets destroyed and they don’t get paid, creating system where there's much to lose if other people don't do well
- Collaboration Incentive – Value of Numeraire grows when whole hedge fund grows, opening way for collaboration with other scientists
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Accelerator
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Market Disruption
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Business Model and Practices
Business Model
and Practices
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Sector
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Financial Services, Information Technology
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Organization
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Numerai
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Source
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Original Publication Date
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February 21, 2017
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