Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
AP Twitter hack: Why the Dow fell so incredibly fast – and why it's a problem
http://blogs.telegraph.co.uk/technology/willardfoxton2/100009077/ap-twitter-hack-why-the-dow-fell-so-incredibly-fast-and-why-its-a-problem/Today the Associated Press Twitter account was hacked, and reported that the White House had been bombed and President Obama had been injured. Within seconds of the tweet, the Dow Jones Industrial Average plummeted, as automated algorithms dumped stock in anticipation of a national crisis.
Of course, the crisis was false, and was exposed as false almost immediately; but at the speed algorithms trade, the Dow fell 140 points in seconds. To understand why we've got to the point where a single errant tweet can momentarily wipe millions off the stock market, you have to go back a long way.
In 1768, Empress Maria Theresa, the Holy Roman Empress, offered a reward for creating an intelligent machine; the test she chose to determine true intelligence was the capacity of the machine to beat her advisors at chess. The prize was won by a man named Wolfgang Von Kempelen, who y created a giant mechanical Turkish wizard which concealed a midget chess master who could control it from within. The empress's advisors lost (the scheme was not rumbled for more than 60 years) and the seed was planted. The test for artificial intelligence became a robot which could beat you at chess.
There's a direct link between Maria Theresa's test and the algorithms which caused havoc in the Dow last night. The empress picked chess because it was thought you had to reason to win; however, what happened, as computing power increased, was not that the machines "thought", but the computers used their blinding ability to do hundreds of calculations to break the game by brute force. They could take on and beat the best human players. IBM's Deep Blue played the then-world champion Gary Kasparov in 1996, winning a game but losing the match. In 1997 it won a rematch.
Of course, the crisis was false, and was exposed as false almost immediately; but at the speed algorithms trade, the Dow fell 140 points in seconds. To understand why we've got to the point where a single errant tweet can momentarily wipe millions off the stock market, you have to go back a long way.
In 1768, Empress Maria Theresa, the Holy Roman Empress, offered a reward for creating an intelligent machine; the test she chose to determine true intelligence was the capacity of the machine to beat her advisors at chess. The prize was won by a man named Wolfgang Von Kempelen, who y created a giant mechanical Turkish wizard which concealed a midget chess master who could control it from within. The empress's advisors lost (the scheme was not rumbled for more than 60 years) and the seed was planted. The test for artificial intelligence became a robot which could beat you at chess.
There's a direct link between Maria Theresa's test and the algorithms which caused havoc in the Dow last night. The empress picked chess because it was thought you had to reason to win; however, what happened, as computing power increased, was not that the machines "thought", but the computers used their blinding ability to do hundreds of calculations to break the game by brute force. They could take on and beat the best human players. IBM's Deep Blue played the then-world champion Gary Kasparov in 1996, winning a game but losing the match. In 1997 it won a rematch.
Fascinating article!
PB
1 replies
= new reply since forum marked as read
= new reply since forum marked as read
