Neutrino-Powered Financial Trading In Our Future? 275
An anonymous reader writes "In a new feature on the future of high-frequency trading, Wired suggests that neutrino-powered financial trading systems may be coming soon, which would enable extremely low-latency information to be transmitted directly through the center of the Earth between major financial exchanges. If finance becomes the killer app for neutrino communication technology, it may ultimately make Neutrino SETI feasible. Quoting: 'It is only a matter of time, perhaps a few decades, says Alexander Wissner-Gross, a Harvard physicist, before some hedge fund decides it needs a particle accelerator to generate neutrinos, and then everyone will want one. Yes, they travel slower than light, but they indisputably can tunnel through the earth, cutting thousands of miles off an intercontinental message. And just a few days before the Battle of the Quants, right before the bad news about faster-than-light neutrinos, researchers announced they had sent a message by neutrino from the Fermilab accelerator in Chicago to a detector a kilometer away. According to Dan Stancil of North Carolina State University, the signal traveled at "very close to" the speed of light. Unfortunately, the data rate was only about 0.1 bits per second, meaning it would be useless for much more than sending a yes/no signal. "With the right modulation scheme, this could be increased by at least one or two orders of magnitude," Stancil said, adding "I don’t know of a compelling commercial application." But we’ve all heard the (apocryphal) story that Thomas J. Watson of IBM predicted "a world market for maybe five computers."'"
Da speediest way tooda Naboo (Score:4, Funny)
'tis goen through the planet core.
Who needs fast data rates? (Score:2)
Who needs fast data rates? No need to send the entire stock exchange of information through this thing. If you can have the price information for two or three key stocks even a half second before everyone else I suspect you could make a killing. Pick a different stock every day, or a couple times a day. They say the throughput could be increased a couple levels right now with the right coding scheme? Give it five years and I bet they can get another order of magnitude out of that. 100 bits would be more tha
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Of course the real question is why you'd be trading in Hong Kong from the US when you can co-locate your servers in Hong Kong and run your trading algorithms there.
The strategy your parent is alluding to is a straight up latency arbitrage where you trade instrument X in market Z based on you getting information from market Y before anyone else.
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How the fuck do you reach that conclusion? No sell = 0 and sell = 1? With absolutely no way whatever to detect whether it's valid data?
Actually yeah, Knight would probably buy one of those...
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How the fuck do you reach that conclusion? No sell = 0 and sell = 1? With absolutely no way whatever to detect whether it's valid data?
Actually yeah, Knight would probably buy one of those...
It's the Texas Hold'em strategy of stock trading.
Quantities, limits, stop loss, ... that's old skool thinking. The new paradigm in trading is ALL or NOTHING. :)
Either you sell everything or you plow your entire bankroll into one stock, 0 or 1 my friend, black or white.
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One bit of information might be enough. Sell or don't sell.
It's usually buy, sell or hold, but really you want a specific number, which could be very detailed if you're doing microtransactions. And you probably need a few bits to identify which stock you're selling, and all this needs a carrier of some sort. The expensive part, though, is probably securing the transmission.
They still travel too slow (Score:4, Funny)
Neutrinos still only go at c
What we need is tachyon communication for stock trading
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That's true.
But by travelling straight through the earth instead of being bounced around it from satellite to satellite, the total distance is perhaps only a hundredth as far, and so the information can be thus relayed proportionally faster.
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My god, you're brilliant! Lets get the only people today who have an immediate financial interest in FTL communications to fund the groundbreaking research needed for it. They'd finally do something useful for a change!
My money's still on quantum entangling as the mechanism though, as far as I've heard nobody has any reason to believe tachyons actually exist.
Re:They still travel too slow (Score:5, Informative)
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Well quantum entanglement happens at a superluminal, but since it is random, it cannot transmit information superluminally so the speed of light still holds true!
Depressing (Score:5, Insightful)
Some of our highest technological achievements end up being used to do one of two things: manipulate capital markets, or blow people up. Expect a neutrino-powered civilian obliterator any day now.
Re:Depressing (Score:5, Funny)
You left out the third achievement upon which the world's greatest minds are now focused: getting you to click on ads.
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I dunno, some of those online-game ads seem to have an effect on me there...
Low latency? (Score:2)
It's still higher than that of within the same building or block as the exchange.
Unless the trading exchange is located at the centre of the Earth. Now there's an idea...
Good Knight! (Score:3)
I find this depressing (Score:5, Insightful)
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Re:I find this depressing (Score:5, Insightful)
It's worse than depressing. There is no socially redeeming value to high frequency trading. At best the practice steals a small amount of value from any affected fundamental (or non high speed technical for that matter...) trade. At worst, it may have caused the flash crash or be able to trigger a similar event.
If we as a world collectively had reasonable securities laws, the idea of high frequency trading would soon become moot. For the right to host the capital markets, the exchanges should be required to be neutral to latency, and certainly not co-host high frequency trading with the exchange computer systems. Also, a very small Pigovian tax on financial transactions would clean up a lot of undesirable activity in the securities markets, this included, while being a source of revenue proximate to provision of a societal good (that being regulation for efficiency sake of the capital markets).
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No more depressing than all the energy and technology we develop to make a guy's dick bigger, and he'll still get turned down.
That's because women are competitive goods. Regardless of how many big dicks there are, there are still the same number of women.
If every guy has the same access to a big dick, then it offers no competitive advantage, it just levels the playing field.
What we should be focusing on is sex androids! The Japanese already have a head start. :)
Eliminate High Frequency Trading (Score:4, Funny)
Funnel all the orders through one old guy wearing green eye shades with a ledger book and a Marchant calculator [wikipedia.org].
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I give 'em three weeks before they successfully start overclocking him. And another month until he becomes so godlike that he takes over the world and institutes mandatory double-entry-accounting lessons with pass-or-vaporize exams. (he is an accountant after all...)
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HFT is a pox on society and serves absolutely no useful purpose other than making very rich people richer, faster.
Which you had to admit was a useful purpose. My view is that if something has a useful purpose, even if I can't personally benefit from it, then that's good enough to justify it.
10:31:01.00001 - yay, just bought 10,000,000 shares (leveraged, with non-existent money).
10:31:01.00002 - yay, took advantage of the blip ME buying 10,000,000 shares caused, sold 10,000,000 shares (profit, of real money)
Don't see the problem. None of my orders would be affected. They're all limit orders and options.
Fraud, fraud, fraud. How the fuck do you justify it?
No fraud happened. Nothing was misrepresented.
And I justify it on the basis that a free world with people who are allowed to choose to do whatever they want is better than a world where we crush peoples' freedom over delusional bullsh
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The fraud is that HFT offers are placed out there for mere fractions of a second and then pulled back. They have NO INTENTION of executing the orders, which is fraud.
That's bad market design. No fraud involved.
It's a rigged game that those in power are allowed to profit from, and the plebs exist to be fleeced.
Nonsense. It's meant to fleece computer trading programs. Plebs aren't computer traders.
Any honest person still in the stock market after knowing that this shit is going on is a fool who will soon be parted from their money.
Nonsense again. You just don't trade in ways that are to their advantage. For normal traders, that means being very careful with market trades or stop loss orders, both which operate at the HFT level. Limit orders are immune to HFT.
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As to market manipulation, go for it. That's free money for anyone rational enough to take advantage of it.
To be very blunt here, I don't see the point of the SEC's interference in this. It
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If you lose money due to algorithmic trading, you don't get it back.
But that's not the way HFT works. If I make money, I keep it. If I'm about to lose money, I drop the network connection. That's fraud.
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Which is the useful purpose, please?
I quoted the relevant passage, but here it is again:
no useful purpose other than making very rich people richer, faster
There you go. Make rich people richer, faster.
Don't see the problem. None of my orders would be affected.
Do you understand how wealth is created?
Do you? I call your bluff here. The point of trade is that it is voluntary and every trade benefits the involved sides. For stock markets, that usually involves a net increase in wealth.
No fraud happened. Nothing was misrepresented.
The fraud isn't against the traders, but against the people who think the system has value so fund and support the government which protects it.
And since nothing was misrepresented for those people (not even counting that the stock market system does have considerable value), no fraud occurred.
And I justify it on the basis that a free world with people who are allowed to choose to do whatever they want is better than a world where we crush peoples' freedom over delusional bullshit like the above "fraud".
This is based on the fallacy that ownership of capital is freedom. It's merely a convenient fiction to help society allocate resources wisely. Society should not waste its time or its money protecting methods of accruing capital which are of no social benefit.
"Social benefit" is just a doublespeak phrase that can mean whatever I want i
over thinking (Score:3)
I mean really, if they wanted near zero latency communication, they should just come to me for some basic technology. For instance, a basic, yet expensive, path is telepaths. Right now we would simple takes twins or triplets or whatever, test them for basic ability, and then train them. Pay each 100K a year to be on staff for a few year, then replace then as needed. This would be a great job for someone right out of high school. For the longer term we would go to some country with low regulation and genetically engineer the telepaths. At first this would be just selective breeding and early training, but eventually we should have labs set up to create telepaths on demand. Pay for their room and board, keep them on for 10 years, then send them on their way with a couple million in trust.
A more expensive and lower bandwidth method would be quantum entanglement. Chang the spin on one particle, it's entangled particle will immediately be changed as well. A 8 bit system could be built, An alternating all up then all down could be sent as a metronome, then an STX, then a certain amount of datadata, then and ETX, then a check sequence, then an EOT. Speed would be limited on by how long one must hold a state for reading. The advantage here is that there is absolutely not latency.
You see, there are always simple solutions when one thinks about it.
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I don't see why quantum entanglement would be more expensive and lower bandwidth though. This could be done with simple, mass produced consumer electronics/optics. Too bad it doesn't allow actual information transfer.
Absolutely disgusting. (Score:4, Insightful)
This is absolutely disgusting, and any society where such a thing is a feasible way of extracting profit, is completely morally bankrupt.
And we thought, nuclear war is the worst thing that can come from fundamental Physics research. Now nuclear war seeme to be a valid solution to the society that is run by financial companies who run DoS and man in the midle attack on all trade and production, to extract money from everyone.
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Now nuclear war seeme to be a valid solution to the society that is run by financial companies who run DoS and man in the midle attack on all trade and production, to extract money from everyone.
I find it remarkable how so much of society doesn't have even a stone age level understanding of trade. You don't enter into a trade because you want to make some financial company rich. You do so to buy or sell something you want or need. As long as you get what you want for the price that you want, it doesn't matter what middle men or DoS gamers are on your market.
And well, that's how the stock market works. You buy what
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Not only development of technology is moral, a drive toward it and appreciation of it is a trait that all humans share as a result of evolution.
On the other hand, if people waited to be paid for their "innovation" we would not still be waiting for invention of the wheel, we would also be waiting for invention of the money, and nothing would ever be invented.
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Many people pay assassins, mercenaries and robbers, too.
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Oh, it's rational. Usually nuclear war is a bad thing, but if the choice is between killing a significant fraction of mankind on one side, and the whole mankind going through new Dark Ages over the next tens of thousands of years, possibly even permanently, it's perfectly rational to choose the former.
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Outlaws what, manipulation of trade that places financial companies in position of control over productive part of society? A society that minimizes rent-seeking behavior gains advantage over others, not disadvantage.
It also was cute that you tried to use my other comment as a template. Too bad, you are stupid and you ended up writing nonsense.
Soon = "in 100 years" (Score:3)
Look at the effort used in detecting them at this time. This is just a writer with some imagination but no understanding of the facts.
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It may not be theft but I'd certainly consider it insider trading.
The information they use is not available to the general public.
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already a working replacement (Score:2)
IMHO gravity neutrinos (Score:3)
The original reason for it was to generate a net thrust by charging the capacity pushing it in one direction, discharging it, and then pushing it back again. This generates a net force since a charged capacitor by relativity has slightly more mass than a discharged capacitor.
One side effect though is that if you already have a gravity signal of the appropriate frequency, then such an oscillating system can pick up that signal. In other words, the MLT can produce a gravity based signal and pick up a gravity based signal. All in theory, of course. But at least it's progressed to the point where one can generate detectable levels of thrust with it. One could probably generate the gravity signal merely by vibrating a massive weight at the right frequency.
Now one such MLT acts so I understand a lot like a dipole antenna. I think it should be possible to make a large phased array of these things and have an ability to detect gravity signals of a tuned frequency, more or less what would be wanted for communication. And it should have better gain by a very large amount (like pretty much everything else does) than a corresponding antenna for neutrinos.
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Not sure how those suggestions could ever be faster than just using fiber optics going around the surface...
Someone is a fool (Score:2)
haste makes waste (Score:2)
Seriously, why do people need information faster than even the general public can get it?
This doesn't benefit anyone except HFTers that front run based on insider information.
This is just a case of parasites inventing a sharper proboscis.
with some luck (Score:2)
Modulation (Score:3)
With the right modulation scheme, this could be increased by at least one or two orders of magnitude
Sure. If anyone ever figures out how to modulate a neutrino beam. Now we're having problems already just detecting them.
I suppose it would be theoretically possible to modulate the accelerator beams, but with the energies involved, I suspect that will be quite a challenge too.
And then there is the small matter of latency. The neutrino beam may be fast, but the whole process of converting the information stream in a modulated beam, and then analyzing the data at the detectors to find the few neutrinos that didn't come from the sun, will take probably more time than sending the data through fiber optics would.
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Actually, that's easy, and has been done: http://arxiv.org/abs/1203.2847 [arxiv.org]
(Full disclosure: I'm an author on that paper)
Modulation (strictly speaking) isn't required. To make the system work, you only need semi-reliable one-bit fast communication, and slow communication otherwise. On the slow channel:
"I'll be ready to send a neutrino pulse at 12:00:00.000000"
"Send me a neutrino bunch at 12:00:00.000000 if it would be profitable to buy "
Then the beamline simply pulses or doesn't-pulse the beam at that time, de
The solution to all this nonsense (Score:2)
1. Queue all orders
2. Delay. 1 second? 2 seconds? Even maybe 5 seconds.
3. Randomise the queue
4. Execute all orders
5. Goto 1
Kills front running, probably kills HFC. Basically strategy proofs the whole thing. Somebody cryptomath geek can probably finess the protocol some more, but this is the basic plan.
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Words fail me.
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Then perhaps refrain from posting until you can use your words?
Of course, that would require you having some form of counter argument ;)
So fast it should be illegal. (Score:2)
Financial trading has always sat at the crossroads between capitalism and gambling. Tying a gigantic roulette wheel to our economy is obviously risky -- and has led to real national disaster on countless occasions. So why do we allow it? Because the capitalists and traders have convinced most of us that free financial markets lead to optimal financial decisionmaking, reward for innovation, and prosperity for all.
But even if we take as a given, the argument completely falls apart when we're talking about
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this part of stock market doesn't lead to any financing though.
since the trades are done on already made investments.
The Next Big Crash... (Score:2)
mistaken premise (Score:2)
high-frequency trading is simply a way to take advantage, arbitrage-like, of failures in market-making. sooner or later, market-makers (and clients, for pete's sake!) will realize this, and simply make HF trading irrelevant. OTOH it may take neutrino-based networking for market makers to do this ;)
besides, if we're looking for exotic physics to leverage, wouldn't entanglement be even better?
Porn (Score:2)
This kind of technology uptake always starts with the porn industry, and then spreads to others. Wall Street might be second, at best.
Re:Nope Nope Nope (Score:4, Insightful)
Never will happen. too hard to detect don't care what anyone says.
Uh huh, and we couldnt go to the moon either.
Never will happen. too hard to do don't care what anyone says.
Did you put your fingers in your ears and scream NANANANANA when you finished saying that rubbish sentence?
Re:Nope Nope Nope (Score:5, Funny)
You insensitive clod. Are you suggesting that going to the moon wasn't a hoax?
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Give it time (Score:3)
Are you suggesting that it was a profitable financial enterprise?
No, but neither was Christopher Columbus' first trip. It was what came after that was profitable. It took ~100 years for the first successful colonies and ~350 years after that to have the largest GDP in the world. The US landed on the moon 40 years ago so lets talk in ~400 years time about whether it was a profitable venture.
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Comparing discovery of the America and its colonization to space colonization is just laughable.
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Uhm... Wrong. It was hugely profitable in a short term for the Spanish who commissioned it.
The spanish made their money by murdering and pillaging the local tribes. I was referring to money made by people being productive (since there are no local tribes to pillage on the moon!) but I should have made that clear. As for the "hospitable environment" argument look at the technology. The early colonies died out because given the technology they had North America was a hostile environment and settling there was beyond their knowledge. Yes the moon is a lot worse but our technology is a lot better.
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Ask Raytheon, ILC Dover, Grumman etc.
Profitability is just a matter of perception.
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Re:Nope Nope Nope (Score:5, Funny)
Only one way to deal with someone who thinks the moon landing is a hoax:
http://www.youtube.com/watch?v=1wcrkxOgzhU [youtube.com]
Re:Nope Nope Nope (Score:4, Interesting)
While we may be able to do neutrino signal trading there should never in the first place be a benefit to super-low-latency trading as it doesn't make the market more "market-efficient" it just enables vampiric that contributes nothing but arcane instability to the whole market. HFTs are a cancer equivalent to too big to fail.
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"We couldn't" != "We thought we couldn't". We've had science fiction about going to other planets all through the fucking 19th century. It was more feasible to them than detecting neutrinos cheaply and on a large scale is now.
But that doesn't even matter: WTF is the point of going to the moon? It was more a cold war masturbation thing than anything else. Satellites are awesome and can be helpful, going
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Haha, saved by a typo from going to Gitmo, woot.
Not much point though (Score:2)
At what power are they going to send the neutrino? (Score:5, Insightful)
If you send the neutrino on too weak a power it will face interferences from other neutrinos produced by natural radioactive decay and solar processes
But if you want to send your neutrino and to ensure people on the other side of the planet can receive it, you have to send it at least with a power of in the order of millions of electron-volts - that is a lot of juice we are talking about !!
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so 100km of fiber optic and then bridge over to neutrino.
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Actually, you've hit the major problem right on the head. You're not going to want to transmit from close to the stock exchange, you're going to want to receive close to the stock exchange so that you can forward your instructions directly into their computer system. The problem is (in the absence of commercially available neutronium), the neutrino comms equipment is going to be bigger than the computer running your trading algorithms. In which case, you may as well just move it there instead of installi
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So what? If high-frequency traders can steal even a fraction of a cent from the market for every electron-volt used they make out like the bandits they are. An eV is actually a tiny amount of energy - 1kWh = 22 billion billion MeV. There's room for lots of really hideous inefficiencies in there before you'll even notice your energy costs
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That's an understatement. It is however very beneficial to high frequency traders, who will no doubt be willing to share a large percentage of their windfall with any politicians who might otherwise consider limiting their strip-mining of the free market.
So the question becomes can we find other heavily-monied interests who are on the losing end of the game to rally behind. And could we stomach doing so?
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I agree that HFT is ultimately worthless; however I wouldn't even limit ownership to 'a few days'. Even a few seconds would ruin these types; as such a limit of hours, or even minutes, would be more than sufficient.
Heck, institute a random (up to) 5 second delay and watch them whine.
You're overkilling, again (Score:2)
Again, you don't need to tax it like that to kill the profitability. Even a 1% redemption fee would normally stop these shenanigans cold. It's not a high margin business, what makes it profitable is that you can do it several hundred/thousand times a day.
Energy != power (Score:5, Informative)
If you send the neutrino on too weak a power it will face interferences from other neutrinos produced by natural radioactive decay and solar processes
First electron-volts measure energy. Power is energy per unit time i.e. joules per second. Energy is a property of each neutrino - a neutrino does not have a power. Power is a property of a beam of neutrinos and is the mean neutrino energy multiplied by the mean number of neutrinos emitted per second. Worse, your suggestion that neutrinos with millions of electron-volts of energy will be needed to avoid interference with radioactive decay could not be more wrong: radioactive decays emit neutrinos at MeV energies! MeV neutrinos will have very similar energies to those from natural radioactive decays!
But if you want to send your neutrino and to ensure people on the other side of the planet can receive it, you have to send it at least with a power of in the order of millions of electron-volts
Again you are confusing energy and power. There are two ways to detect neutrinos over background: beam intensity and energy. Accelerators generally produce neutrinos with GeV energies (billions of electron-volts). These have some background from cosmic rays hitting the atmosphere but give more directional information when detected i.e. you can tell where they came from better than low energy neutrinos so you can greatly reduce any background. Alternatively, if you have enough beam power then you can modulate the beam intensity in the remote detector which will modulate the count rate - you just need to have enough neutrinos to dominate the background. Also you need to bury your detectors to avoid backgrounds from cosmic ray muons.
Many thanks ! (Score:2)
Many thanks for explanation !
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"When a distinguished but elderly scientist states that something is impossible, he is very probably wrong."
So what the hell kind of chance have you got?
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THIS IS WHAT AMERICAN PATRIOTS REALLY BELIEVE.
In reality, technology is developed by people who can convince companies to pay them for developing technologies for those companies first. However it never ever happened in the history of mankind that worthwhile technology stayed exclusive to companies where it was developed first.
This shit, of course, is not even a worthwhile technology, it's a way to waste massive amount of energy and space to game a system that should not be allowed to exist in the first pla
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This shit, of course, is not even a worthwhile technology, it's a way to waste massive amount of energy and space to game a system that should not be allowed to exist in the first place.
What's the deal here? A cool technology and a valuable use for it. I'd have to say that in addition to the benefits we get from faster, more responsive markets, we have potential for some serious spin off. That seems good enough to justify the above stuff to me.
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The fastest and most responsive markets exist at the moment when a massive financial crisis starts. Everything productive depends on markets being as slow and stable as possible, as long as they aren's slower than the production itself, and we have crossed that boundary in 19th century.
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A bigger time window for a man in the middle attack is a valuable use?
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It gets developed because some joker thinks it will make him rich.
And those jokers are frequently right.
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In my limited understanding I would expect the energy/maintenance needs of such a network be a tremendous drain on resources over time for potentially no benefit?
And in your limited understanding it could also be great benefit. That's pretty much what an "expensive gamble" is.
I suppose the technology that comes out of the consequential research and development may better serve humanity, but using it expressly for financial purposes sounds like a misadventure.
Why? I really don't get this. It could be an opportunity to get someone with deep pockets to pay for research into a wonderful technology and yet, there's all these people casting doubt on it not because of the viability of the technology, but because it's finance related.
The thing is, there is revenue in this from the financial side. And if things ever get that far, you end up with a neutri
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a tremendous drain on resources over time for potentially no benefit
Well, isn't that exactly what Wall Street specializes in?
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The size and shielding requirements will likely mean mobile detectors will be infeasible for the indefinite future, but te far side of the moon is a good example.
The detectors typically have to be very large, and worse, *very* sensitive to detect any neutrino interactions at all. That sensitivity means they have to be very well shielded from all other particles to have any hope of detecting a neutrino over the noise of other particle interactions. For example - the Sudbury Neutrino Observatory in
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Should you post that stupid link every time there (Score:2)
No, indeed...
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Entanglement communication is far more interesting. Spooky, distant, simultaneous communication? Yes please.
Just a shame there's no actual communication involved, and no way to send information.
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