I've often wondered about the feasbility of a private firm doing something similar to dominate the HFT scene by getting a massive lead on information from the opposite end of the globe.
Using https://planetcalc.com/7725/ and https://planetcalc.com/73/ I just concluded that the straight-line chord distance between Tokyo and San Francisco is 1552 km whereas the great-circle distance is 8270 km. (Neither of these is very precise because it's unclear where in each city you should measure from, and unclear whether either calculator uses data about the irregularity of the Earth's curvature.)
It does make a noticeable difference for HFT applications, I guess: 1552 km/c is about 5 ms while 8270 km/c is about 28 ms. (The neutrinos might do better in another way because I guess light in a fiber doesn't directly follow the curve of the fiber itself, since it's getting repeatedly reflected off of the inside surface of the glass.)
But can you decode a neutrino signal in real time?
Making a neutrino beam is remarkably convoluted. https://en.wikipedia.org/wiki/Accelerator_neutrino
>The process of the muon neutrino or muon antineutrino beam production consists of the following steps[1][2]:
>Acceleration of a primary proton beam in a particle accelerator.
>Proton beam collision with a fixed target. In such a collision secondary particles, mainly pions and kaons, are produced.
>Focusing, by a set of magnetic horns, the secondary particles with a selected charge: positive to produce the muon neutrino beam, negative to produce the muon anti-neutrino beam.
>Decay of the secondary particles in flight in a long (of the order of hundreds meters) decay tunnel. Charged pions decay[3] in more than 99.98% into a muon and the corresponding neutrino according to the principle of preserving electric charge and lepton number...
There's several different places in this chain where you could modulate the beam by turning various magnets on or off. Probably not in the proton accelerator.
Unfortunately, "long string of expensive experimental equipment" means "not efficient". From the paper:
>A neutrino source delivering muons at a rate of 10^14 s^−1 with an energy of 150 GeV would require about 4 MW in proton beam power and 2.4 MW acceleration power, which for a 10% electrical efficiency translates into a total power consumption of roughly 65 MW.
Yow. Something like ten times more power than the NuMI neutrino beam. He concludes this transmitter could do something like 100 bits/s to a stationary detector string anchored at the ocean bed. Deeper the better, for shielding against cosmic rays and solar radiation. Would be tough to put a neutrino detector close enough to a financial hub and still get useful bandwidth.
100 bits/sec is plenty to make lots of money... If you consider 100 bits/sec is 1 bit per 10 milliseconds, with say a 5% bit error rate (can't do error correction without introducing delay).
Each end of the connection can make two candidate investment strategies based on globally available data. The 'bit' decides which strategy to go for.
Easy money for anyone who can turn the science into reality... Easy money that will dry up as soon as a few other people start doing the same...
Hamming Codes don’t, unless I’m missing something?
With a block length more than 1, you therefore introduce latency of 10s of milliseconds.
With a block length of 1, a hamming code doesn't do any error correction.
Hamming codes would let you access the uncorrected data immediately, and do error correction later (after the block length has passed), but at that point you have already used it to make trading decisions, so it's too late.
If everyone knows you have a phone to the future, finding counterparties is going to be hard. Who's going to take the other side of a trade you know you're going to lose?
For fun the cos rule can be used to derive a general formula for the ratio of great circle to chord, given the angle (theta) in radians subtended at the centre of the Earth:
theta / sqrt( 2-2.cos(theta) )
where: theta = (great circle distance) / radius
(Assuming I haven't mucked up my algebra.)
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Not sure why my comment is rendering in italics. No emphasis is meant. Figured it out, it was the asterisk I used for a multiplication symbol.
This different speed of light is what gives glass its refractive index, which makes it optically useful.
I'm still confused because I thought I had learned that fiber optical cables work by total internal reflection, in which the light inside is repeatedly reflected by the surface of the fiber. Is this an overly simplistic view for thinking about the path that the light will follow in the fiber?
I barely understand this myself. But the way I imagine this is essentially as a water wave running through a trough.
Lets consider a simple sinusoidal wave originating at one end of the trough. Lets call a wavefront any line across the trough that follows the peak of a wave (really it can be any fixed phase, but peaks are nicer to visualize). What happens to these wavefronts as time goes on? They bend around the corners. Essentially the water just in front of the wavefront is going to be pushed up next, and when this happens has a lot more to do with distance from the current wavefront than whether the actual water particles are bouncing off the wall or not.
My explanation of wavefronts moving forward doesn't quite explain why the wavefront 'rotates' in a curved waveguide. I would guess something about path interference being different on the inside of a corner than the outside. Someone who actually studied this stuff probably knows a lot better.
Hence people who want to make financial transactions have less friction. In order to interpret this as a global positive, you need to see a more efficient financial system as better.
The story there is usually that a more efficient allocation of capital allows for the most growth, pulling more of the world out of poverty.
(I fully think HFT is good for financial world, less certain on the financial world being better for the wider world)
Maybe two decades in the future this becomes a defacto communication technology.
- Conventional RF systems can function with very low latency. The signal processing chain for radiation detection systems is comparatively large, and can require correlation (or anti-correlation) and significant noise reduction or signal separation to construct a useful signal.
- It requires an unbelievable capital investment for low bandwidth. You need a large time advantage to make your PnL on the few names this would support compared to microwaves and other conventional means.
Put enough behind those strategies and you're making millions a day.
Until your competitors notice and refuse to trade with you or do the same.
Do you have evidence that someone net a billion in a year making a market on a single name?
This seems to ignore that the effective bandwidth could be so low that the latency is greater than conventional transmission systems like RF. Since scintillation radiation detectors are highly stochastic compared to semiconductor RF receivers, I think it's probable it would take too long to receive the bit with sufficient confidence.
Scintillation detectors don't work like a solid state detector and have worse time characteristics.
The other chain (https://news.ycombinator.com/item?id=23903796) suggested 100 bits per second with a 5% error rate. With the (major) assumptions on that error rate and that you can modify / detect the beam in realtime that gives you plenty to work with.
Of course there is a massive difference between technically possible vs actually implementable.
It’s a very cool idea but I’m skeptical that the market structure supports it.