Who will Win the Data Wars?
The universe has been here for 13.79 billion years (give or take 0.2 billion). We are but a speck of dust in a wrinkle in time looking from our own point of view in this multiverse. 99.999999999+% of our universe's history has no record or at least not in a way that can be understood by humans. Around a thousand years ago, the world's first movable type printing press technology made of ceramic porcelain was invented in ancient China by the Han Dynasty's great innovator, Bi Sheng . This breakthrough was ultimately followed in 1450, by Johannes Gutenberg who upgraded the printing process to metal movable type using pieces of lead, tin and antimony. Let's narrow our lens to 131 years ago up to present day. In 1895, Guglielmo Marconi sent and received the first human observed radio signal. It is hard to fully understand cosmology and celestial mechanics, but what is tangible is how we began to record human history. From the advent of written language and movable type to radio to film to television to internet to augmented reality we are now exhausting data by the terabyte. The last millennium of human technological evolution will inevitably be dwarfed relative to the awesome power of the new paradigm we are now entering.
Most humans (7.4 billion forecasted to swell to 11.2 billion by 2100) don’t even realize how much data they are creating every microsecond following their prosaic quotidian daily routine. Their day-to-day movements are tracked by the Internet of Things via their phones, wearables, every word they type, every destination they go on the internet, even how much they sleep! -- all tracked and potentially valuable to analyze. According to Cisco, 50 billion objects are expected to be linked to the internet by 2020 & able to record & transmit data to other objects. This data will be commercially harnessed by, to paraphrase Steve Jobs, “the crazy ones, misfits, rebels, troublemakers, and round pegs”. Data empires are being built on the shoulders of great entrepreneurs, idealists, anarchists, and collaborators. As the $550+ billion market cap of Google (born in 1996 in a Stanford research lab) demonstrates, even a "teenage" data organizational platform can be king. Google's revenue is around the GDP of countries like Ukraine and Angola! We can debate aggressively whether Google, Apple, Amazon, Facebook, Baidu, Alibaba and Tencent will be the largest technology empires alone or as a cartel, but what is clear is that owners and manipulators of data are destined to be locked in a battle for supremacy.
A friend in metals & mining shared with me the story of a gold exploration company in Québec he met with recently, Integragold . Integragold put up a C$1 million prize for the top 5 groups that could best analyze where they should mine. Participants got access to 75 years of proprietary mining exploration data, 6 terabytes in total. Integragold’s “Gold Rush Challenge” was a gigantic success with 1,342 participants and 100 submissions. The winning team, SGS Geostat utilized a combination of machine learning and traditional geological methods to produce targets. Their geostatistical methods were fed into an expansive and unbiased block model with a scoring system using machine learning to identify high value targets, which were then vetted through Virtual Reality with Oculus Rift technology.
Regarding Digital Gold ...people only want to talk Blockchain and yet Bitcoin the currency continues to hover around $600+. Regarding the Blockchain as a distributed immutable database I am particularly encouraged and excited by collaborative Blockchain work like Digital Asset Holdings which is developing globally permissioned ledgers to bring settlement up to present time. Whether Bitcoin or permissioned Blockchains wins it is instructive to appreciate how challenging but powerful it is to get leading institutions to play together nicely. New protocols always must be carefully engineered by stakeholders. Ether, which is the second most popular cryptocurrency behind Bitcoin, has been hacked already (by “ The DAO ”, a Decentralized Autonomous Organization conceived of and programmed by the team behind German startup Slock.it – a company building “smart locks” that let people share their things (cars, boats, apartments) in a decentralized version of Airbnb.) The cleanup options of soft forks and hard forks around the $150 million lost have been well chronicled and wildly debated. Decentralized democracy becomes harder to manage when the value at risk gets in to the millions!
From a technological and philosophical perspective digital processing via algorithms and machine learning, collective competition and collaboration are representative of the next generation of financial markets. This summer Point 72 announced they are committing as much as $250 million of capital to be managed by Quantopian , the 5-year-old online platform where members build computerized trading models and earn a share of profits. Imagine a brilliant college kid getting backed by a massive hedge fund? A pure meritocracy based on demonstrated capabilities manipulating data.
Progress is inevitable; inertia, political will, and GroupThink must be overcome. Collaborations do tend to produce better outcomes than solo work because diverse teams when intellectually honest benefit from the collective. “ Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise .” - James Surowiecki , The Wisdom of Crowds.
Whether considering mining for physical gold, digital gold, or awarding million dollar assets to algorithmic traders, we do know Machine Learning is the preferred tool of the next Empire(s). We also know that the sum of the parts is greater than any part. We have taken our learnings and created Qineqt . The Qineqt team has been carefully putting financial and non-financial data together cell by cell for years. We are now over 200+ experts wrapping up the final touches to enable us to feed some of the most sophisticated global asset managers. Our library of cleaned structured and unstructured data will serve the “Data Wars” as funds compete in the never ending pursuit of alpha. We are looking for a few great collaborators to work closely with us on enhancing and utilizing our platform. All we ask is that you bring your data scientists and data questions. Accepting applications.
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