D-Wave, quantum computer application in finance?

zhanghaze · Post by **zhanghaze** » Sun Mar 09, 2014 8:47 pm

D-wave one claims to have 128 qubit and has been used by google. I wonder if this quantum computer is legit, how would it be used in finance/trading world? Speeds up monte-carlo simulation?

curvefitter · Post by **curvefitter** » Mon Mar 10, 2014 12:11 am

if you had 2 or more working qubits you'd be fighting off swarms of VC willing to give you millions for some ink, you wouldn't bother actually running excel on it..

FDAXHunter · Post by **FDAXHunter** » Mon Mar 10, 2014 7:02 am

D-Wave doesn't really have a quantum computer in the sense that we understand quantum computing. Some people would even claim it's a scam.

Quantum algorithms can tackle many problems, but they excel the most at those that are NP-hard (pun not intended). For those algorithms we have no better solution than exponential running time (or more accurately: non-polynomial time).

Most Monte Carlo Simulations in finance being run currently are not NP-hard. Actually, they are easy (in the computational complexity sense). They are relatively trivial to parallelize. I think you would find that if you had a decent real quantum computer, that wouldn't really be on your lists of things to do. The first financial application I could immediately think of would be breaking open every Bitcoin wallet in the world at the same time Smiley . This is in fact the classical application (again pun not intended) for quantum computers.

Steve Castle · Post by **Steve Castle** » Mon Mar 10, 2014 9:13 am

I believe they are still trying to prove it's a quantum computer and not just running something else.

[edit]

Earlier I said "quantum annealing" but I think that's what it's supposed to run. I'm confused.

article explaining it

zhanghaze · Post by **zhanghaze** » Mon Mar 10, 2014 4:10 pm

Thanks for the articles and comments. Suspicious indeed. However, this kind of revolutionary change happens fast...

Are there any NP-complete problems in finance? Would a quadratic speed up help? Could it be used in finding Nash equilibrium, train AI algorithms, etc?

Cheng · Post by **Cheng** » Mon Mar 10, 2014 4:19 pm

A quadratic speed up won't do a lot for a problem that can only be solved in non-polynomial time...

If you consider cryptography a part of finance then, yes, there are some NP-complete problems. Heck, one highly esteemed member here approached me once with a knapsack problem in disguise as part of a finance operation Smiley .

jslade · Post by **jslade** » Mon Mar 10, 2014 5:07 pm

"this kind of revolutionary change happens fast... "

I agree with that. The fact that D-wave has been around since 1999 and has yet to do anything that could be construed as quantum computing indicates that nothing much is really happening. The time between von Neumann's paper and improved von Neumann machines, by contrast: a couple of months.

Nobody really knows if quantum computing is a legitimate idea. People in computer science come up with "I can solve NP-hard problems with my imaginary computer architecture" all the time. A protractor can solve NP-hard problems in theory (see, for example, this paper: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.23.1744 ). In practice, it can't, because there's no such thing as a physical real number. I've always suspected that quantum computers are assuming "real numbers" somewhere.

Quantum computers would be good at solving combinatorial optimization problems, which come up sometimes. In fact, that's what D-wave is trying to do. Too bad a giant thing the size of a house can't beat a cell phone on this task.

rod · Post by **rod** » Thu Oct 27, 2016 1:58 am

This thread has not yet mentioned Scott Aaronson. He has written an enormous number of blog posts on D-Wave. So many, in fact, that his blog even has a D-Wave tag. Here's one of those blog posts:

Hopefully my last D-Wave post ever (December 17th, 2009)

Note the blog's header:

"If you take just one piece of information from this blog: quantum computers would not solve hard search problems instantaneously by simply trying all the possible solutions at once."

katastrofa · Post by **katastrofa** » Thu Oct 27, 2016 10:23 am

Aaronson has a bit of the envy the academicians have towards industry practitioners.

rod · Post by **rod** » Thu Oct 27, 2016 10:27 am

Aaronson was a tenured professor at MIT. He now moved to UT Austin.

He is arguably the most famous computer scientist of his generation.

Why exactly should he envy D-Wave?

For allegedly building an actual quantum computer? People build quantum computers in academia, too. But in physics departments, not CS departments. One of my grad school acquaintances built one. The media all over the world hyped up his creation, like they do with D-Wave's creations.