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We will never fly around in space shooting lasers

X-wing_SWGTCG

I’m not saying we won’t have awesome spaceships like the X-Wing or that there won’t be space battles with lasers. I’m arguing that we won’t really be involved.

Check out this robot playing ping pong.

I’m not talking about drones, I’m talking about fully automated battle. Let me backup a second.

Algorithmic trading

Print out the trades and take it to the floor

Print out the trades and take it to the floor

Thomas Peterffy came to Wallstreet with a crazy idea. Use computers to calculate when prices were out of sync with the market and then make trades based on those calculations. He’d print off the trades into a big binder and walk around the stock exchange making trades.

In 1987 NASDAQ came out with a trading terminal. This dumb terminal could give stock quotes and allow you to place trades. Peterffy immediately tore the thing open and hacked a connection from the terminal to his own computer. He took humans completely out of the loop and started the algorithmic trading revolution.

Algorithmic trading is now going through another revolution (thats another story) but it accounts for 40-60% of stock trades.

Thats because computers can analyze data and make decisions much faster than people can and in those fractions of a second money is made and lost. The time is so important that firms actually compete to get shorter cables than competitors.

So what does this have to do with space? Imagine that you’re in your sweet x-wing and you goto engage the enemy. Except the enemy is using algorithmic battle drones. Their cameras run at 200,000 frames per second and can analyze every possible move and counter move in the battle before 1/1000th of a second have passed. In the time it takes for your brain to recognize what your eyes or x-wing sensors are telling you, the battle will already be over. The laser blasts will already be on their way, intercepting your craft.

The enemy will not miss. Ever.

PS. For more info on the story of algorithmic trading checkout this awesome Planet Money.

Posted Monday, March 24, 2014