Thursday, July 28, 2011

Kevin Slavin: How algorithms shape our world - June 2011

Kevin was involved in some internet/gaming startups
Area/Code (exited > Zynga New York) Starling.
which mix virtual and reality

I think this talk was seeded by a lucky seating assignment on an airplane, next to a Hungarian physicist who had worked on detecting steath airplanes and now was looking for stealth transactions on Wall Street.

Synopsis of his view:
Stealth works by breaking up the signal into lots of little pieces, like a flock of birds. You break it by scanning for flocks of birds which emit electronic signals.

3000 physiscist working on wall street. Need to hide big trades (i.e. pension fund buys/sells 10% of a company). Done via algorithms. Other algos can then detect these algos.

Algos now high speed. 2-5 milliseconds. To the point where network latency determines profit or loss. Thus companies now put their server farms right next to where the big pipe comes into NY. A fiber optic cable was laid from chicago to NY to reduce latency times.

We are changing the physical infrastructure to serve the algos.

The algos are black boxes.

Strong analogy with the filter bubble, see Eli Pariser

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