It\u2019s a tantalizing prospect for traders whose success often hinges on microseconds: a desktop PC algorithm that crunches market data faster than today\u2019s most advanced supercomputers.<\/p>\n
Japan\u2019s Toshiba Corp. says it has the technology to make such rapid-fire calculations a reality — not quite quantum computing, but perhaps the next best thing. The claim is being met with a mix of intrigue and skepticism at financial firms in Tokyo and around the world.<\/p>\n
Toshiba\u2019s \u201cSimulated Bifurcation Algorithm\u201d is designed to harness the principles behind quantum computers without requiring the use of such machines, which currently have limited applications and can cost millions of dollars to build and keep near absolute zero temperature. Toshiba says its technology, which may also have uses outside finance, runs on PCs made from off-the-shelf components.<\/p>\n
\u201cYou can just plug it into a server and run it at room temperature,\u201d Kosuke Tatsumura, a senior research scientist at Toshiba\u2019s Computer & Network Systems Laboratory, said in an interview. The Tokyo-based conglomerate, while best known for its consumer electronics and nuclear reactors, has long conducted research into advanced technologies.<\/p>\n
Toshiba has said it needs a partner to adopt the algorithm for real-world use, and financial firms have taken notice as they grapple for an edge in markets increasingly dominated by machines. Banks, brokerages and asset managers have all been experimenting with quantum computing, although viable applications are generally considered to be some time away.<\/p>\n
Toshiba said its system is capable of calculating arbitrage opportunities for currencies in microseconds. The company has hired financial professionals to work on the project and aims to complete a real-world trial by March 2021.<\/p>\n
\u201cFinance is the most familiar application,\u201d Toshiba Chief Executive Officer Nobuaki Kurumatani said in an interview. \u201cBut there are so many uses. This is a technology with real potential.\u201d<\/p>\n
Toshiba\u2019s algorithm seems to outperform rival approaches on mathematical benchmarks, but how it will perform on real-world problems is anyone\u2019s guess. Access to the company\u2019s backtesting in currency trading and portfolio optimization isn\u2019t publicly available and adopting the technology to a new problem would likely require rebuilding the algorithm from scratch.<\/p>\n
\u201cThere is a lot of talk about applications of quantum computing in finance, but it\u2019s not very clear where it would be all that necessary,\u201d said Takanobu Mizuta, a fund manager and senior researcher at Sparx Group Co. Optimizing a portfolio is not something that needs to be done in microseconds and calculations involved in high-frequency trading, where speed counts, are not very complicated, Mizuta said.<\/p>\n
Toshiba may choose to use the algorithm for areas outside finance. Other applications could include things like plotting complex shipping and logistics routes and developing new drugs with molecular precision, according to the company.<\/p>\n
The idea first arose in 2015, when senior research scientist Hayato Goto was exploring how the qualities of some complex systems can suddenly change with additional input, a phenomenon he describes as bifurcation. But it took him two years, he said, to realize the discovery could be used to craft algorithms that can efficiently sift through a huge number of possibilities — like a quantum computer without the onerous requirements to run one.<\/p>\n
Goto partnered with Tatsumura, whose semiconductor expertise was crucial in making the calculations work on multiple processors in parallel.<\/p>\n
\u201cWe will see some ideas for specific applications of quantum computing coming out over the next five years,\u201d said Masayuki Ohzeki, an associate professor at Tohoku University whose research focuses on the technology. \u201cBut real implementation will depend on when there is a good match between improvement in performance and techniques that simplify the calculations.\u201d<\/p>\n
Toshiba revealed its Simulated Bifurcation Algorithm in April, initially garnering little attention outside the scientific community. In October, the company announced that its model had identified potential arbitrage opportunities in currency trading in just 30 microseconds — fast enough, it claimed, to give it a 90% chance of making profitable trades. That triggered inquiries from financial institutions in Japan and abroad, Toshiba said.<\/p>\n
Investment banks are already eyeing quantum computing as an opportunity and a threat. Goldman Sachs Group Inc. has been building an in-house research team and late last year joined forces with startup WC Ware to speed up the search for a \u201cquantum advantage.\u201d Japan\u2019s Nomura Holdings Inc. has partnered with Ohzeki\u2019s lab at Tohoku University to explore applications in asset management using a machine made by Canada\u2019s D-Wave Systems Inc.<\/p>\n
\u201cRight now, what you can do with it is still hypothetical,\u201d said Kazuyuki Takeda, a general manager at Mizuho-DL Financial Technology Co., a research arm of one of Japan\u2019s biggest financial groups. \u201cIt will take quite a bit of time before we have practical uses of quantum computing. At least 10 years or so.\u201d<\/p>\n
Alphabet Inc.\u2019s Google claimed in October that its quantum computer — built on a custom processor with bespoke cryogenic cooling — could perform a task in 200 seconds that would take today\u2019s fastest supercomputer 10,000 years. Researchers at IBM have countered, saying that their supercomputer can match Google\u2019s Sycamore processor \u201cin a matter of days.\u201d But that cluster of machines occupies an area the size of two basketball courts inside the Oak Ridge National Laboratory. In either case, the cost of quantum-like computational capability appears to still be prohibitively high for most applications.<\/p>\n
In the meantime, Toshiba is hoping it will succeed in commercializing its new algorithms — whether in finance or elsewhere — by delivering a computational edge with existing technology.<\/p>\n
\u201cWe give ourselves about a one-year lead for the stuff that we release publicly,\u201d Goto said. \u201cThe more cutting-edge knowledge we have internally gives us confidence that we won\u2019t be easily caught up with.\u201d<\/p>\n
A desktop PC algorithm that crunches market data faster than today\u2019s most advanced supercomputers.<\/p>\n","protected":false},"author":341034,"featured_media":222932,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[733],"class_list":["post-335464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-software","tag-toshiba"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/335464"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=335464"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/335464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/222932"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=335464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=335464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=335464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}