The Universe is a Quantum Algorithm: Evidence Emerges from the Stock Market

Ovidiu Racorean—15 Nov 2015
The universe is not underpinned by energy but by information, and more specifically holographic quantum codes that create the spacetime universe that we know. What is more, these same quantum codes strangely model stock market behaviour as well!

RECENTLY, QUANTUM GATES AND QUANTUM CIRCUITS have been found when portfolios of stocks were simulated in quantum computation processes, pointing to the existence of a bizarre quantum code beneath the stock market transactions. The quantum code of the stock market might prove to have a more profound signification if is related to the recent finding of quantum codes at the deepest levels of our reality, such as the quantum mechanics of black holes and the space-time of the universe. Could this mysterious stock market quantum code be a tiny fragment of a quantum code that our universe uses to create physical reality?

John Preskill's talk "Is spacetime a quantum error-correcting code?" held at the Center for Quantum Information and Control, University of New Mexico, and previously at Kavli Institute for Theoretical physics , may represent a turning point in physical research related to questioning the existence and evolution of our Universe. The essence of this talk may change forever our understanding of the Universe, shifting the perspective of physical research from masses and energies to codes of information theory.

John Preskill, professor at California Institute of Technology, is well known mostly for his remarkable developments of quantum computational models, more specifically topological quantum computing. Preskill's lectures inspire a whole generation of brilliant physicists working on quantum computation. This experience in quantum computing has allowed Dr. Preskill to knock at the gates of the Universe with the unique perspective of a quantum code reality.

Is spacetime a quantum error-correcting code?

The facet of information theory that physical research has embraced over the last few years în order to understand the laws of the Universe may at first seem bizarre, but it ends up making perfect sense after listening to Dr. Preskill's reasoning over the existence of spacetime as a quantum code.

The idea of expressing spacetime as a quantum code is so amazing that deserves at least a brief non-technical presentation. It relies on two relatively recent ideas in physics: the holographic principle and quantum error-correction. The holographic principle asserts that all the information contained in a region of space is encoded on the boundary of the region. Quantum error correction is the foundation of building large-scale quantum computers that can be operated to solve hard problems. Based on these two ideas, Fernando Pastawski, Beni Yoshida, Daniel Harlow and John Preskill have constructed quantum codes that realize the holographic principle.

John Preskill and Co built this incredible image of spacetime on the previous work of Almeheiri and Co and Polchinski and Co. The late researchers all came to the conclusion of a spacetime expressed as a quantum error-correcting code, but they never formulated it explicitly.

The holographic universe

In a post on his blog, discussing Polchinski’s work, the string physicist Lubos Motl, former assistant professor at Harvard University, concluded that "we are living in a holographic universe that uses quantum computer code to create the physical reality". He names it "Holographic code".

The Holographic Universe theory was originated by Leonard Susskind, professor of theoretical physics at Stanford and one of the co-founders of holographic principle alongside Gerard't Hoft. Susskind proposed that the universe behaves as a hologram, that all the information that constitutes our three-dimensional world is actually encoded on the two-dimensional universe boundaries. Apparently, the universe is a virtual holographic reality.

The Bad Boy of Physics, as American Scientists named Dr. Susskind, extended the idea that the information a black hole contains lies on its surface event horizon, to it lying on the edge of the whole universe.

So what do black holes have to do with quantum error-correcting codes?

Black Holes and the quantum error-correcting code

At an historical meeting in Stockholm this year – the "Hawking Radiation Conference" – Stephen Hawking enrolled himself once again in the so called "Black Holes war". He argued that the boundaries of the black hole hold the information about outside objects trapped inside, though this information is altered and useless when it radiates outside the black hole horizon. This presentation caused uproar among the researchers.

Hawking's new idea is that the information doesn't make it inside the black hole at all. Instead, it's permanently encoded in a 2D hologram at the surface of the black hole's event horizon. "The information is not stored in the interior of the black hole as one might expect, but in its boundary — the event horizon," Hawking said.

It should be noted here how the focus in leading-edge cosmology is changing from radiations and particles, to hologram and information theory.

The Verlinde brothers took a different approach that eventually associate black holes to quantum error-correcting codes.

Erik Verlinde, University of Amsterdam and Herman Verlinde at Princeton Center for Theoretical science, make the parallel between black hole radiation and the loss of coherence of a quantum computer. This analogy seems fruitful in applying the techniques of quantum information theory such as quantum error-correcting code to model the internal state of the black hole.

All these recent theoretical discoveries have certainly revealed that information theory is more important in describing physical reality than had been previously appreciated. The appearance of quantum codes to explain such disparate natural phenomena may converge to the idea that physical laws of our reality are encoded in the "lines" of a Universe quantum code.

May the entire Universe be a giant quantum computer that creates our reality using quantum algorithms?

Quantum Computational Universe

Seth Lloyd is a professor of mechanical engineering at MIT. He is a distinguished researcher in the field of quantum computation, and has co-authored some articles with Preskill.

For the present exposition, though, another aspect of his remarkable research career is relevant. Despite his incredibly laborious work in quantum computing, he is most well known to the general public for launching the idea of a Computational Universe.

In his controversial book, Programming the Universe, Prof. Lloyd emphasized the idea that the Universe is a "giant quantum computer made up of connected quantum gates", as it was characterized in the American Scientist review of the book. Connected quantum gates are basically describing quantum circuits and quantum algorithms.

On this note, we should add here the remarks of Dr. James Gates, professor at the University of Maryland, at a show moderated by the astrophysicist Neil deGrasse Tyson. Referring to these findings, Dr. Gates argued that, if the reality is a code, researchers should "try to detect the presence of codes in the laws that describe physics". And this is precisely the sort of theories that have been coming out of physics in the recent years – theories which build the universe from quantum codes.

More intriguing perhaps is the presence of quantum codes in the representation of a reality totally unrelated to physics – the financial markets. A recent paper [Quantum Gates and Quantum Circuits of Stock Portfolio- http://arxiv.org/abs/1507.02310] in applying quantum computation to model the stock price movements surprisingly suggests that the stock market itself is a complex quantum algorithm.

Quantum computation and financial markets

To take an advantage over the competition, financial institutions must adopt new scientific ideas and advanced technologies very early in their development. And this applies to quantum computers.

Promised to be more powerful and faster than their classical counterparts, quantum computers have captured the total attention of financial players lately.

A visionary Canadian venture, D-Wave Systems, put out on the market the first quantum computer, a product that immediately caught the attention of some important buyers including Google, NASA, and Lockheed Martin.

Using the quantum adiabatic theorem at the core of their revolutionary processor, D-Wave Systems created this particular quantum computer for research fields that requires solutions to complex optimization problems, such as those encountered in the search for cancer drugs or the money markets.

The world of finance may also benefit from harnessing the power of adiabatic quantum computation to solve optimization of portfolios or logistic problems, like the well-known salesman problem.

Briefly, financial problems can be solved, in an adiabatic quantum computation, by initializing a system of particles into the ground state of a simple Hamiltonian [operator corresponding to the total energy of the system], and then adiabatically evolving the Hamiltonian to one whose ground state encodes the solution to the problem.

The amazing thing here is that changing the quantum states of tiny particles can solve exclusively human related problems, like selecting an optimum portfolio of assets in the financial markets.

There is another angle to view the applicability of quantum computation to financial markets – the simulation of price movements of stocks in the portfolios.

The mysterious quantum code of the Stock Market

Out of the conventional models of quantum computers, working with quantum gates and quantum circuits, the one most likely to be built in the near future is the topological quantum computer. The genuinely bizarre way the topological quantum computer realizes quantum computation came to the attention of the scientific community in 1997. At that time, A. Kitaev thought it may solve the error correction problem of quantum computers by means of topology.

Topology is the branch of mathematics concerned with the properties of geometric configurations that are unaltered by deformation. In the same manner, the topological trajectories of theoretical quasi-particles forming braids are protecting the information against errors caused by local interactions with the environment. The quasi-particles are called anyons and are supposed to be found in fractional quantum Hall effects.

In topological quantum computation, quantum gates are simply implemented by braiding the quasi-particles trajectories in a predefined sequence.

What do these quasi-particles and braided trajectories have to do with financial markets? The time series regarding prices of stocks in the portfolios exhibit the same braiding behavior as the collection of quasi-particles. So simulating stock price movements in a portfolio using quantum simulation is actually quite reasonable.

The astonishing thing is that, when simulating in topological quantum computation environment, the time series of stock prices, in their braiding movement, model elementary quantum gates. And these stock portfolio quantum gates can be chained into quantum circuits.

It is absolutely fascinating to see how stocks of reputable companies like McDonald's or Walt Disney Company are literally modeling quantum gates in their New York Stock Exchange daily evolution. And selecting a stock portfolio, from the shares of companies listed on Dow Jones Industrial Average market index, composed of McDonald's Corp. (MCD), The Walt Disney Company (DIS), American Express Company (AXP), and United Health Group Incorporated (UNH), an astonishing chain of quantum gates is recovered: a Hadamard gate, Pauli gates and an S-phase gate are all acting concerted in 1-qubit quantum circuit.

As the number of stocks in the portfolio increases, more complex quantum code structures arise. 2-qubit quantum circuits appear by adding Nike Inc. (NKE) and The Home Depot, Inc. (HD) to the initial portfolio of stocks.

stock market quantum algorithm

Extend the process to the whole Dow Jones Industrial Average market index and a mysterious quantum code of the stock market is revealed.

And it is here that the link to the quantum computational universe is revealed. This strange quantum code laying beneath the stock market transactions may be a small fragment of the universal code the entire Universe acts according with. This result may point out the shocking conclusion that New York Stock Exchange is perhaps a quantum computational virtual reality.

It may look rash to jump to this conclusion at so early a stage of this research into the existence of quantum codes behind stock market movements. It also seems a bit far-fetched to link the stock market to black hole evaporation or holographic universe, but at this point, it seems to be the only logical explanation.

At the end of the day, the deeper and more troubling question arises out of this story: Could the trajectories of particles express not only the quantum code beneath stock market transactions but also the hidden code of our entire physical reality?