Incomprehensible computer behaviors have evolved out of high-frequency stock trading, and humans aren’t sure why. Eventually, it could start affecting high-tech warfare, too. We spoke with a researcher at University of Miami who thinks humans will be outpaced by a new “machine ecology.”
For all intents and purposes, this genesis of this new world began in 2006 with the introduction of legislation which made high frequency stock trading a viable option. This form of rapid-fire trading involves algorithms, or bots, that can make decisions on the order of milliseconds (ms). By contrast, it takes a human at least one full second to both recognize and react to potential danger. Consequently, humans are progressively being left out of the trading loop.
And indeed, it’s a realm that’s rapidly expanding. For example, a new dedicated transatlantic cable is being built between US and UK traders that could boost transaction speed by another 5 ms. In addition, the new purpose-built chip iX-eCute is being launched which can prepare trades in an astounding 740 nanoseconds.