Wall Street Can Run on Collaboration, Not Competition

Richard Craib

Founder | Numerai

Wall Street is capitalism at its fiercest. But Richard Craib believes it can also be a place for friendly collaborations. His hedge fund, San Francisco–based ­Numerai, relies on artificially intelligent algorithms to handle all trades. But the 29-year-old South African mathematician doesn’t build these algorithms himself. Instead, his fund crowdsources them from thousands of anonymous data scientists who vie for bitcoin rewards by building the most successful trading models. And that isn’t even the strangest part.

Ultimately, Craib doesn’t want these data scientists to get overly competitive. If only the best modelers win, they have little incentive to recruit fresh talent, which could dilute their rewards. Competitors’ self-­interest winds up at odds with getting the best minds, no matter who they are, working to improve the fund. To encourage cooperation, Craib developed Numer­aire, a kind of digital currency that rewards everyone when the fund does well. Data scientists bet Numer­aire on algorithms they think will succeed. When the models work, Numer­aire’s value goes up for everyone. “I don’t want to build a company or a startup or even a hedge fund,” Craib says. “I want to build a country—a place where everyone is working openly toward the same end.” —­Cade Metz