Receive all Cointelegraph news immediately in Telegram.
Numerai has begun to incentivize its anonymous data scientists with Ethereum’s native token Ether instead of bitcoin.
Numerai, a hedge fund created by South African developer Richard Craib, has begun to incentivize its anonymous data scientists with Ethereum’s native token Ether instead of Bitcoin.
In December of 2016, Craib introduced a concept called Numeraire, a Blockchain and cryptographic token-based ecosystem wherein data scientists are incentivized to create a more efficient market for traders.
12,000 data scientists within the Numeraire ecosystem were issued one mln crypto tokens to construct an artificial intelligence hedge fund that directly focuses on learning more effective and practical methods of trading financial securities.
In an interview, Craib revealed that all of the Numerai hedge fund’s data is shared across its network of data scientists in an abstract manner. Thus, data scientists that are actively developing an AI-based system to optimize trades have access to the numbers but can’t comprehend or link the numbers to actual trades.
"We give away all our data. But we convert it into this abstract form where people can build machine learning models for the data without really knowing what they're doing.”
For over six months since the launch of Numeraire, more than 12,000 data scientists within the tokenized ecosystem of Numerai were compensated with Bitcoin for their contribution to the development of the Numerai AI hedge fund system.
Earlier this week, Numerai migrated its platform and deployed the Numeraire smart contract to the Ethereum network, sending 1.2 mln tokens to 19,000 data scientists globally.
Since February, Numerai has incentivized more than $200,000 to its data scientists in Bitcoin. However, because the Numeraire token and its smart contract are launched on top of the Ethereum network, the hedge fund struggled to create a practical and compatible way of incentivizing its data scientists.
Ether, the native token of Ethereum, is compatible with the tokens of all decentralized applications launched on top of the Blockchain, which is why it is used as a currency peg for investors participating in initial coin offerings (ICOs).
Hence, for a decentralized autonomous organization (DAO) such as Numerai, which sends out payments and executes smart contracts autonomously, it is more efficient in terms of time and cost to pay out stakeholders with Ether.
The Numerai team explained:
“The problem with bitcoin is that it exists on a different blockchain to the Numeraire token. This drastically limits the extent to which decentralized applications based on Numerai can be automated and unstoppable because these applications cannot receive payment in bitcoin, they can only receive and use ether. If Numerai made payments in ether, then a decentralized application on Ethereum could automatically use that ether to fund its operations.”
Follow us on Facebook
For updates and exclusive offers, enter your e-mail below.
Thank you for contacting us! We will reply to you as soon as possible.
Thank you for your interest in our franchise program.
We are considering your request and will contact you in due course. If you have any further queries, please contact: