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Over the last several decades, there has been an explosion of machine learning models being used by investment and hedge fund managers. At the heart of these models lies countless gigabytes of data, all collected and stored independently by each hedge fund.
There are over 10,000 hedge funds in the US alone. With all of them siloing away and hoarding their data, predictive models are left crudely equipped and the bridge between projection and reality remains unsteady at best.
Our guest today saw this and decided to attack the problem at its root. Richard Craib is the founder and CEO of Numerai. His solution was to build an open hedge fund that creates a game for the worlds leading data scientists.
By creating tools, data, and a structure, Numerai now has over 750 data scientists that create and contribute models to the central Numerai fund model. Each model and prediction is backed by stakes of cryptocurrency, indicating the confidence of the creator. This structure is a radical shift from the traditional hedge fund.
With more people working in finance than ever before, what if the way to streamline our current financial system was just by turning it into a game that’s easier and more fun to play? Specifically, what if we turned it into a game where in order to make predictions, you have to have a stake and skin in the game? If you are right you get rewarded, but if you are wrong, the cryptocurrency you’ve staked gets burned up.
We’ll explore these questions and more in today’s episode of Hidden in Plain Sight with Richard Craib.