If you’ve ever built a hedge fund, chances are you’re a financial magnate… And you’re probably really smart. 29-year-old South African entrepreneur Richard Craib certainly appears to be both as the creator of San Francisco’s latest hedge fund operation Numerai.
Hedge funds have been looking for new ways to enter the world of bitcoin. A former Coinbase employee who has left the guise of the world’s largest bitcoin exchange to create his own financial haven has already birthed revenue exceeding $10 million, while a New York hedge fund has brought in over $5 million. Impressive totals for each enterprise, and now with Numerai, the streak is looking to continue.
Craib, who studied mathematics at Cornell University before leaving to work for an asset management firm in South Africa, has put together a fine team of coders to manage the fund. Ironically, every coder is paid predominantly in bitcoin. Together, they build technology that mask’s the establishments trading data before sharing it with their anonymous community of scientists.
“We give away all our data,” Craib explains. “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.”
The entire system works with what appears to almost be a touch of magic. The work is encrypted, ensuring the scientists can never see anything pertaining to the company’s trading history, yet at the same time, data is organized so the scientists can build learning models to analyze it. This helps establish firmer and safer ways of trading financial securities. Granted the methods work, the scientist(s) involved in the successful model are paid handsomely in bitcoin.
So far, the company has enjoyed a pretty good run. Staff have been trading stocks for approximately one year, and while stock information can’t actually be released, Craib says they’ve been doing well financially. They’ve also managed to raise about $6 million in seed funding in recent weeks.