Bitcoin Global News (BGN)
December 07, 2018 -- ADVFN Crypto NewsWire -- Numerai is not
exactly new to the Cryptocurrency space. In fact, it has been
around since Bitcoin had its’ first truly successful year in 2015.
Until recently however, the Numerai project has been quite
centralized in terms of who controls its’ token supply and who has
access to its’ data.
Now, since October, things have
arguably been changing for the better with the team’s announcement
of its’ decentralized data marketplace called Erasure. In an
overarching sense, Erasure is a place where anyone can post a
prediction about anything and show their confidence in it by
staking crypto on its’ veracity. If you know anything about
Numerai’s history, then you know that this is the same sort of
marketplace that they’ve had from the start with two
differentiators.
In the past, Numerai essentially
only catered to data science teams. To understand why this was the
case, it’s essential to recap where Numerai’s uniqueness lies,
beyond its’ data marketplace.
Numerai began as the first AI hedge
fund with its’ own proprietary cryptocurrency. In order for its’ AI
system to continuously improve in terms of its’ market performance,
it still depends on crowdsourced predictions from a horde of data
scientists. These professionals, in turn, are incentivized to
continuously provide predictions because they earn Numeraire tokens
when they do so.
Going forward, these professionals
will still be able to participate in evolving the network as they
always have. The only difference will be that now, anyone else can
join them. Underpinning all of this is a consensus protocol based
on what is called Proof of Existence, which has a very clear
utility. Essentially, since Numerai is based on the Ethereum
blockchain, storing thousands of predictions would be extremely
expensive in Gas fees. Because of this, Numerai plans to store the
predictions on the InterPlanetary File System, which is similar to
a new version of HTTP for the web. Once someone wants to access a
prediction, all they would need is the prediction’s hash, which
will be stored on the Ethereum blockchain. In effect, it can help
to think about the hash like a compressed version of the full
prediction set.
On top of this innovative storage
solution, Erasure also timestamps all predictions as they are
submitted, which commits the user to his or her prediction from
that time. If you’re interested in knowing more about how this
works out on a technical level, check out the research on the
Proof-of-Existence protocol, which has actually been around since
2013. According to the Numerai team, these timestamps are public
and allow anyone to check the accuracy of anyone else’s predictions
at any time. The ultimate goal here is for professionals to build
up a reputation based on the verifiable accuracy of their
predictions. Over time, once this scales and Numerai hits a
critical mass of users, it may become the most accurate hedge fund
in history. Before it gets there however, the team will need to
think hard about the difference between incentivizing data
scientists to help a hedge fund grow and incentivizing the general
populace to do the same.
By: BGN Editorial Staff