Wednesday, September 17, 2014

PLAING DARPA: DARPA’S HUNT FOR SPACE-TIME VULNERABILITIES IN ALGORITHMS: PART ONE

This article was shared by Ms. P.H., a regular here, and it’s definitely worth passing along. But first, a little context.
One of my private fascinations has been the so-called Flash Crash of 2010 and the field of High Frequency Trading, those computer algorithms that now drive much of the stock and commodities markets in the west, trading large amounts of stock or commodities in microseconds. This phenomenon in turn was driven by the entry of physicists into the world of finance, and the creation of the whole (fascinating) field of “econophysics” as they applied their statistical modeling of particle interactions to the markets themselves.
My concern with the whole phenomenon is similar to that of those who were in the business, and left it: does HFT or High Frequency Trading really reflect the human market, or is it more reflective of a massive disconnect between the “matrix-like” reality of modern financial markets, and human markets. It also goes without saying that with the massive computational ability and surveillance programs of the modern state and corporation, that some of these programs could easily constitute the most sophisticated kind of “inside trading” mechanism(concerns voiced by those looking at the HFT phenomenon) due to their implicit predictive capabilities.
Last Friday, during our members’ vidchat, one of the participants submitted a question: could the phenomenon of (photon) entanglement be wedded to such a process (not only of high frequency trading but more importantly, of prediction), and if so, what might it portend? During our conversations, I suggested that the utility of the phenomenon would be the ultimate in HFT if it could be made to work, and more important, entanglement would be a necessary and crucial component for the conduct of interplanetary commerce. Here’s why.
Suppose, for a moment, that there was a large and prosperous human mining colony on Mars. Commerce would be taking place between Mars and Earth. Suppose there was even a Martian Commodities and Futures Market and a Cydonia Stock Exchange. Trades following between Mars and Earth are, in current known technologies, travel at the speed of light and hence take some minutes to achieve. A trade between Mars and Earth would therefore take some minutes to execute. But with entanglement added to the mix, space communications – and commerce – would be greatly enhanced(not to mention trades on Earth!)  It would constitute the ultimate in HFT.
Now… with this context in mind, tomorrow we’ll consider DARPA’s latest project…

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