This is a photograph by the artist Michael Najjar, and it's real, in the sense that he went there to Argentina to take the photo. But it's also a fiction. There's a lot of work that went into it after that. And what he's done is he's actually reshaped, digitally, all of the contours of the mountains to follow the vicissitudes of the Dow Jones index. So what you see, that precipice, that high precipice with the valley, is the 2008 financial crisis. The photo was made when we were deep in the valley over there. I don't know where we are now. This is the Hang Seng index for Hong Kong. And similar topography. I wonder why.
Ovo je fotografija umetnika Mihaela Najara i ona je stvarna u smislu da je on otišao u Argentinu da bi napravio ovu fotografiju. Ali je i izmišljenja. Uloženo je mnogo rada u nju nakon fotografisanja. On ju je digitalno preoblikovao, tako da vrhovi planina prate kretanje Dau Džons (Dow Jones) indeksa. Dakle, to što vidite, ova provalija, duboka provalija sa dolinom, je finansijska kriza iz 2008. Ova fotografija je napravljena kada smo bili duboko u finansijskoj provaliji. Ne znam gde se sada nalazimo. Ovo je Hang Seng indeks berze u Hong Kongu. I slična topografija. Pitam se zašto?
And this is art. This is metaphor. But I think the point is that this is metaphor with teeth, and it's with those teeth that I want to propose today that we rethink a little bit about the role of contemporary math -- not just financial math, but math in general. That its transition from being something that we extract and derive from the world to something that actually starts to shape it -- the world around us and the world inside us. And it's specifically algorithms, which are basically the math that computers use to decide stuff. They acquire the sensibility of truth because they repeat over and over again, and they ossify and calcify, and they become real.
Ovo je umetnost. Ovo je metafora. Ali poenta je u tome da je ovo metafora sa zubima. I sa tim metaforičkim zubima želim danas da predložim da malo porazmislimo o ulozi savremene matematike, ne samo finansijske matematike, već generalno matematike. Njena tranzicija od nečega što smo uzeli od sveta, do nečega što stvarno počinje da ga oblikuje -- svet oko nas i svet u nama. I njegovi specifični algoritmi koji su u suštini matematika koju kompjuteri koriste da donesu odluke. Oni zahtevaju osećaj za istinu jer se stalno ponavljaju. I oni okoštavaju i kalcifikuju se i postaju stvarni.
And I was thinking about this, of all places, on a transatlantic flight a couple of years ago, because I happened to be seated next to a Hungarian physicist about my age and we were talking about what life was like during the Cold War for physicists in Hungary. And I said, "So what were you doing?"
Od svih mesta, ja sam o ovome razmišljao na preko-okeanskom letu pre par godina jer su me smestili pored mađarskog fizičara koji je bio mojih godina i razgovarali smo o tome kakav je bio život fizičara u Mađarskoj za vreme Hladnog rata. Upitao sam ga: "Šta ste Vi radili?"
And he said, "Well we were mostly breaking stealth."
A on je rekao: "Pa, uglavnom smo pokušavali da prokljuvimo nevidljivost lovačkih aviona."
And I said, "That's a good job. That's interesting. How does that work?" And to understand that, you have to understand a little bit about how stealth works. And so -- this is an over-simplification -- but basically, it's not like you can just pass a radar signal right through 156 tons of steel in the sky. It's not just going to disappear. But if you can take this big, massive thing, and you could turn it into a million little things -- something like a flock of birds -- well then the radar that's looking for that has to be able to see every flock of birds in the sky. And if you're a radar, that's a really bad job.
Rekao sam: "To zvuči kao dobar posao. To je interesantno" Kako to funkcioniše?" Da bi razumeli to, morate da razumete kako funkcioniše nevidljivost aviona. Ovo je jako prosto objašnjenje ali u suštini, ne možete tako jednostavno da prođete radarskim signalom kroz 156 tona čelika na nebu. Objekat neće tek tako nestati. Ali možete uzeti tu veliku, masivnu stvar, i pretvoriti je u milion malih stvari -- nesto poput jata ptica -- tada radar koji ga traži mora biti u mogućnosti i da vidi svako jato ptica na nebu. Ako ste radar, to je jako naporan posao.
And he said, "Yeah." He said, "But that's if you're a radar. So we didn't use a radar; we built a black box that was looking for electrical signals, electronic communication. And whenever we saw a flock of birds that had electronic communication, we thought, 'Probably has something to do with the Americans.'"
"Da", reče on, "samo ako si radar". Tako da nismo koristili radar; napravili smo crnu kutiju koja je tražila električne signale, elektronsku komunikaciju. I kad god smo videli jato ptica koje komunicira elektronski pomislili smo da to sigurno ima veze sa Amerikancima."
And I said, "Yeah. That's good. So you've effectively negated 60 years of aeronautic research. What's your act two? What do you do when you grow up?" And he said, "Well, financial services." And I said, "Oh." Because those had been in the news lately. And I said, "How does that work?" And he said, "Well there's 2,000 physicists on Wall Street now, and I'm one of them." And I said, "What's the black box for Wall Street?"
Rekao sam: "Da. To je dobro "Vi ste dakle efektivno negirali 60 godina aeronautičkih istraživanja." Šta je vaš drugi čin? Šta ćete raditi kada odrastete?" I on reče, Pa... finansijske usluge. "Oh", rekoh ja na to. O tome se nedavno govorilo u vestima. "Kako to funkcioniše?", pitao sam. A on je odgovorio, "Na Vol Stritu imaš trenutno 2000 fizičara i ja sam jedan od njih." "Šta je crna kutija Vol Strita?", upitah ga.
And he said, "It's funny you ask that, because it's actually called black box trading. And it's also sometimes called algo trading, algorithmic trading." And algorithmic trading evolved in part because institutional traders have the same problems that the United States Air Force had, which is that they're moving these positions -- whether it's Proctor & Gamble or Accenture, whatever -- they're moving a million shares of something through the market. And if they do that all at once, it's like playing poker and going all in right away. You just tip your hand. And so they have to find a way -- and they use algorithms to do this -- to break up that big thing into a million little transactions. And the magic and the horror of that is that the same math that you use to break up the big thing into a million little things can be used to find a million little things and sew them back together and figure out what's actually happening in the market.
A on reče: "Zanimljivo je što to pitate, jer se to zapravo zove trgovanje iz crne kutije". A ponekad se zove i algo trgovanje, algoritamsko trgovanje." Algoritamsko trgovanje se razvilo jer su institucionalni trgovci imali isti problem kao i Američka vazdušna avijacija. Oni su menjali svoje vlasničke pozicije -- bilo da su Proctor & Gamble ili Accenture ili neko drugi -- menjali vlasništvo nad milionima deonica nečega na tržištu. I ako oni to urade odjednom, to je kao da svi sve ulože u prvom delenju u pokeru Samo odate karte. Tako da su morali da nađu način -- i za to koriste algoritme -- da podele tu jednu veliku transakciju u milion malih transakcija. Magija i horor toga je što ta ista matematika koju koristite da biste razbili tu veliku stvar na milion manjih delova može da koristi da nađete milion malih delova i spojite ih nazad u jednu celinu i tako otkrijete šta se dešava na tržištu.
So if you need to have some image of what's happening in the stock market right now, what you can picture is a bunch of algorithms that are basically programmed to hide, and a bunch of algorithms that are programmed to go find them and act. And all of that's great, and it's fine. And that's 70 percent of the United States stock market, 70 percent of the operating system formerly known as your pension, your mortgage.
Ako vam treba slika o tome šta se dešava na berzi deonica trenutno, možete da zamislite kao veliki broj algoritama koji su u suštini programirani da prikriju transakcije, i mnogo algoritama koji su programirani da ih nađu i deluju. I sve je to u redu. Dok ne saznate da oni čine 70 posto prometa na berzama u Sjedinjenim Državama, 70% operativnog sistema, formalno poznatog kao vaša penzija, vaša hipoteka.
And what could go wrong? What could go wrong is that a year ago, nine percent of the entire market just disappears in five minutes, and they called it the Flash Crash of 2:45. All of a sudden, nine percent just goes away, and nobody to this day can even agree on what happened because nobody ordered it, nobody asked for it. Nobody had any control over what was actually happening. All they had was just a monitor in front of them that had the numbers on it and just a red button that said, "Stop."
A šta je moglo da krene po zlu? Ono što je krenulo po zlu je da je pre godinu dana devet posto ukupnog tržišta nestalo za pet minuta, i to nazivaju "Blic lom u 2:45" Iz čista mira, devet procenata je nestalo, i do današnjeg dana se niko ne može složiti oko toga šta se desilo, jer niko to nije naredio, niti tražio. Niko nije imao kontrolu nad tim. Sve što su imali je bio monitor ispred sebe sa brojevima i crveno dugme na kojem je pisalo, "Stop."
And that's the thing, is that we're writing things, we're writing these things that we can no longer read. And we've rendered something illegible, and we've lost the sense of what's actually happening in this world that we've made. And we're starting to make our way. There's a company in Boston called Nanex, and they use math and magic and I don't know what, and they reach into all the market data and they find, actually sometimes, some of these algorithms. And when they find them they pull them out and they pin them to the wall like butterflies. And they do what we've always done when confronted with huge amounts of data that we don't understand -- which is that they give them a name and a story. So this is one that they found, they called the Knife, the Carnival, the Boston Shuffler, Twilight.
Stvar je u tome da mi pišemo stvari, pišemo stvari koje nismo u stanju više da pročitamo. Dobili smo nešto nečitko. I izgubili smo ideju o tome šta se stvarno dešava u svetu koji smo napravili. I počeli smo da radimo po sopstvenom nahođenju. U Bostonu postoji kompanija koja se zove Nanex, i oni koriste matematiku i magiju i ne znam šta još sve ne, i pristupaju svim podacima tržišta i pronalaze, ponekad, neke od tih algoritama. Tu gde ih nađu oni ih izvuku i zakače na zid kao leptire u insektarijumu. Oni rade ono što mi oduvek radimo kada smo suočeni sa velikom količinom podataka koje ne razumemo, a to je da im daju imena i priču. Ovo je jedna koju su našli, i nazvali je "Nož", "Karneval", "Bostonski mešač", "Sumrak".
And the gag is that, of course, these aren't just running through the market. You can find these kinds of things wherever you look, once you learn how to look for them. You can find it here: this book about flies that you may have been looking at on Amazon. You may have noticed it when its price started at 1.7 million dollars. It's out of print -- still ... (Laughter) If you had bought it at 1.7, it would have been a bargain. A few hours later, it had gone up to 23.6 million dollars, plus shipping and handling. And the question is: Nobody was buying or selling anything; what was happening? And you see this behavior on Amazon as surely as you see it on Wall Street. And when you see this kind of behavior, what you see is the evidence of algorithms in conflict, algorithms locked in loops with each other, without any human oversight, without any adult supervision to say, "Actually, 1.7 million is plenty."
Stvar je u tome da, naravno, oni nisu ograničeni samo na tržište. Možete ih naći gde god pogledate, kada naučite da ih tražite. Možete ih naći ovde: u ovoj knjizi o muvama, koju ste tražili na Amazonu. Možda ste primetili kada je njena cena bila 1,7 miliona dolara. Knjiga nije više u štampi, ali... (Smeh) Da ste je kupili po ceni od 1,7 miliona, to bi bilo skoro besplatno. Nekoliko sati kasnije, cena je porasla na 23,6 miliona dolara, plus troškovi slanja i obrade pošiljke. Pitanje je sledeće: Niko nije ništa kupovao niti prodavao; šta se dešavalo? Možete uočiti takve pojave na Amazonu kao što ih možete uočiti na Volstritu. Kada vidite ovakvo ponašanje, to što vidite je dokaz algoritamskog konflikta, algoritama koji su zapetljani jedan u drugi bez ljudskog nadzora, bez nadzora odrasle osobe, nekoga ko bi rekao, "1,7 miliona je mnogo."
(Laughter)
(smeh)
And as with Amazon, so it is with Netflix. And so Netflix has gone through several different algorithms over the years. They started with Cinematch, and they've tried a bunch of others -- there's Dinosaur Planet; there's Gravity. They're using Pragmatic Chaos now. Pragmatic Chaos is, like all of Netflix algorithms, trying to do the same thing. It's trying to get a grasp on you, on the firmware inside the human skull, so that it can recommend what movie you might want to watch next -- which is a very, very difficult problem. But the difficulty of the problem and the fact that we don't really quite have it down, it doesn't take away from the effects Pragmatic Chaos has. Pragmatic Chaos, like all Netflix algorithms, determines, in the end, 60 percent of what movies end up being rented. So one piece of code with one idea about you is responsible for 60 percent of those movies.
Sa Netfliksom je isto kao sa Amazonom. Netfliks je prošao kroz mnoge različite algoritme tokom godina. Počeli su sa Cinematch algoritmom i probali još mnoge druge. "Planetu dinosaurusa" i "Gravitaciju". Trenutno koriste "Pragmatični haos". "Pragmatični haos" je sličan "Netfliks" algoritmu, pokušava da uradi istu stvar. Pokušava da vas razume, kao operativni sistem u vašoj lobanji, kako bi vam predložio koji biste sledeći film mogli da pogledate što je veoma, veoma težak problem. Poteškoća kod ovog problema i činjenice da ga ne razumemo najbolje, ne umanjuje značaj efekta "Pragmatičnog haosa". "Pragmatični haos", kao i svi "Netfliks" algoritmi, određuje, na kraju, 60 procenata svih filmova koji se iznajmljuju. Tako da je jedan program sa jednom idejom o Vama odgovoran za 60 procenata filmova koje pogledate.
But what if you could rate those movies before they get made? Wouldn't that be handy? Well, a few data scientists from the U.K. are in Hollywood, and they have "story algorithms" -- a company called Epagogix. And you can run your script through there, and they can tell you, quantifiably, that that's a 30 million dollar movie or a 200 million dollar movie. And the thing is, is that this isn't Google. This isn't information. These aren't financial stats; this is culture. And what you see here, or what you don't really see normally, is that these are the physics of culture. And if these algorithms, like the algorithms on Wall Street, just crashed one day and went awry, how would we know? What would it look like?
Ali šta ako biste mogli oceniti te filmove pre nego li budu snimljeni? Da li bi to bilo korisno? Nekoliko informacionih naučnika iz Velike Britanije je u Holivudu, i imalu algoritme za scenarije -- kompanija koja se zove Epagogix. Možete ubaciti svoj scenario kroz njihov program i on vam može reći, kvantitativno, da je to film koji će zaraditi 30 miliona dolara ili 200 miliona dolara. Stvar je u tome da to nije Google. To nije informacija. To nisu finansijske statistike; to je kultura. I ovo što vidite, tj što normalno ne vidite, je fizika kulture. I ako bi ovi algoritmi, kao oni na Volstritu, pali i nestali, kako ćemo znati, kako će to izgledati?
And they're in your house. They're in your house. These are two algorithms competing for your living room. These are two different cleaning robots that have very different ideas about what clean means. And you can see it if you slow it down and attach lights to them, and they're sort of like secret architects in your bedroom. And the idea that architecture itself is somehow subject to algorithmic optimization is not far-fetched. It's super-real and it's happening around you.
A oni su i u vašoj kući. Oni su u vašoj kući. Ovo su dva konkurentna algoritma za vašu dnevnu sobu. Ovo su dva različita robota za čišćenje koji imaju različite ideje šta znači čišćenje. To možete da vidite ako ih usporite i zakačite svetlo na njih. Oni su kao tajne arhitekte u vašoj spavaćoj sobi. Ideja da je i sama arhitektura na neki način subjekt algoritamske optimizacije nij nerealna. Veoma je stvarna i dešava se oko vas.
You feel it most when you're in a sealed metal box, a new-style elevator; they're called destination-control elevators. These are the ones where you have to press what floor you're going to go to before you get in the elevator. And it uses what's called a bin-packing algorithm. So none of this mishegas of letting everybody go into whatever car they want. Everybody who wants to go to the 10th floor goes into car two, and everybody who wants to go to the third floor goes into car five. And the problem with that is that people freak out. People panic. And you see why. You see why. It's because the elevator is missing some important instrumentation, like the buttons. (Laughter) Like the things that people use. All it has is just the number that moves up or down and that red button that says, "Stop." And this is what we're designing for. We're designing for this machine dialect. And how far can you take that? How far can you take it? You can take it really, really far.
Najviše je osetite kada se nalazite u zatvorenoj metalnoj kutiji, liftu nove generacije, koji se zovu lokaciono kontrolisani liftovi. To su oni kod kojih treba da odaberete na koji sprat idete pre nego uđete u lift. On koristi tzv algoritam pakovanja kutije. Znači ništa od ove ludosti da puštamo ljude da ulaze u lift koji žele. Svako ko želi da ode na deseti sprat ulazi u lift broj dva, a svako ko hoće na treći sprat ulazi u lift broj pet. Problem sa ovim je što se ljudi pogube. Ljudi počnu da paniče. Vidite zašto. Vidite zašto. Zato što liftu nedostaju neki važni instrumenti, poput dugmića. (smeh) I druge stvari koje ljudi vole da koriste. Sve što lift ima je broj koji ide gore-dole i crveno dugme koje kaže "Stop." To je ono što dizajniramo. Dizajniramo za taj mašnski dijalekat. Koliko daleko može to da ode? Dokle možemo to da odvedemo? Možemo ga odvesti jako, jako daleko.
So let me take it back to Wall Street. Because the algorithms of Wall Street are dependent on one quality above all else, which is speed. And they operate on milliseconds and microseconds. And just to give you a sense of what microseconds are, it takes you 500,000 microseconds just to click a mouse. But if you're a Wall Street algorithm and you're five microseconds behind, you're a loser. So if you were an algorithm, you'd look for an architect like the one that I met in Frankfurt who was hollowing out a skyscraper -- throwing out all the furniture, all the infrastructure for human use, and just running steel on the floors to get ready for the stacks of servers to go in -- all so an algorithm could get close to the Internet.
Zato ću se vratiti nazad na Volstrit. Jer algoritmi na Volstritu zavise od jedne stvari pre svega, a to je brzina. Oni operišu brzinama u milisekundama i mikrosekundama. Da biste shvatili šta je mikrosekunda -- potrebno vam je 500 000 mikrosekundi da biste kliknuli mišem. Ali ako ste algoritam na Volstritu i kasnite pet mikrosekundi, vi ste gubitnik. Tako da ako ste algoritam, tražićete arhitektu poput onoga kojega sam upoznao u Frankfurtu koji je ispraznio ceo neboder -- izbacio sav nameštaj i infrastukturu namenjenu ljudskoj upotrebi, i postavio čelik na podove kako bi se gomile servera mogle useliti unutra -- sve kako bi algoritam bio blizu Internetu.
And you think of the Internet as this kind of distributed system. And of course, it is, but it's distributed from places. In New York, this is where it's distributed from: the Carrier Hotel located on Hudson Street. And this is really where the wires come right up into the city. And the reality is that the further away you are from that, you're a few microseconds behind every time. These guys down on Wall Street, Marco Polo and Cherokee Nation, they're eight microseconds behind all these guys going into the empty buildings being hollowed out up around the Carrier Hotel. And that's going to keep happening. We're going to keep hollowing them out, because you, inch for inch and pound for pound and dollar for dollar, none of you could squeeze revenue out of that space like the Boston Shuffler could.
Vi smatrate da je Internet distribuiran sistem. On to i jeste, ali se distribuira sa različitih mesta. U Njujorku se distribuira iz hotela "Carrier" koji se nalazi u ulici Hadson. To je mesto odakle se kablovi šire po celom gradu. Istina je, da što ste dalje od tog mesta, kasnićete par mikrosekundi. Momci sa Volstrita, "Marko Polo" i "Čeroki Nejšn", su osam mikrosekundi u zaostatku za ovim algoritmima koji ulaze u prazne zgrade oko hotela "Carrier". I to će nastaviti da se dešava. Nastavićemo da ih ispražnjavamo, jer vi, centimetar po centimetar, funtu po funtu, dolar po dolar, niko od vas ne bi mogao izvući prihod iz tog prostora kao što može "Bostonski mešač".
But if you zoom out, if you zoom out, you would see an 825-mile trench between New York City and Chicago that's been built over the last few years by a company called Spread Networks. This is a fiber optic cable that was laid between those two cities to just be able to traffic one signal 37 times faster than you can click a mouse -- just for these algorithms, just for the Carnival and the Knife. And when you think about this, that we're running through the United States with dynamite and rock saws so that an algorithm can close the deal three microseconds faster, all for a communications framework that no human will ever know, that's a kind of manifest destiny; and we'll always look for a new frontier.
Ali ako se udaljite od slike, i pogledate krupni plan, videćete kanal dug 1328 km između Njujorka i Čikaga, koji je u toku zadnjih nekoliko godina izgradila "Spread Networks" kompanija. Ovo je optički kabel koji leži između dva grada i može da provodi samo jedan signal 37 puta brže no što vi možete da kliknete mišem, izgrađen je samo za algoritme, samo za "Karneval" i "Nož". Kada razmislite o tome, da trčimo kroz SAD sa dinamitom i razbijačima za kamen kako bi algoritmi zaključili transakciju tri mikrosekunde brže, sve to radi komunikacionog okvira koji nijedan čovek neće spoznati, to je neka vrsta očigledne sudbine koja će uvek pomerati nove granice.
Unfortunately, we have our work cut out for us. This is just theoretical. This is some mathematicians at MIT. And the truth is I don't really understand a lot of what they're talking about. It involves light cones and quantum entanglement, and I don't really understand any of that. But I can read this map, and what this map says is that, if you're trying to make money on the markets where the red dots are, that's where people are, where the cities are, you're going to have to put the servers where the blue dots are to do that most effectively. And the thing that you might have noticed about those blue dots is that a lot of them are in the middle of the ocean. So that's what we'll do: we'll build bubbles or something, or platforms. We'll actually part the water to pull money out of the air, because it's a bright future if you're an algorithm.
Nažalost, predstoji nam vrlo ambiciozan posao. Ovo je samo teorijski. To je samo matematika sa MIT-a. Istina je da ni ja, stvarno, ne razumem mnogo toga o čemu pričaju. Radi se o svetlosnoj kupoli i kvantnoj upletenosti, a ja to stvarno ne razumem. Ali mogu da pročitam ovu mapu. A ono što nam ova mapa kaže je da ako pokušavate da zaradite novac na tržištu gde se nalaze crvene tačke, tamo gde su ljudi, gde su gradovi, moraćete servere staviti tamo gde su plave tačke da bi ste radili efikasno. Možda ste primetili da se mnoge plave tačke nalaze na sredini okeana. Ono što treba da uradimo je da izgradimo balone ili platforme. Da bukvalno razdvojimo more i izvlačimo novac iz vazduha, jer je svetla budućnost pred vama ako ste algoritam.
(Laughter)
(Smeh)
And it's not the money that's so interesting actually. It's what the money motivates, that we're actually terraforming the Earth itself with this kind of algorithmic efficiency. And in that light, you go back and you look at Michael Najjar's photographs, and you realize that they're not metaphor, they're prophecy. They're prophecy for the kind of seismic, terrestrial effects of the math that we're making. And the landscape was always made by this sort of weird, uneasy collaboration between nature and man. But now there's this third co-evolutionary force: algorithms -- the Boston Shuffler, the Carnival. And we will have to understand those as nature, and in a way, they are.
I nije novac taj koji je zapravo toliko interesantan. Već šta novac motiviše. Mi zapravo transformišemo samu Zemljinu površinu sa ovakvom vrstom algoritamske uspešnosti. I u tom svetlu vi se vraćate i gledate fotografije Mihaela Najara i uviđate da one nisu metafore, one su proročanstva. One su proročanstvo seizmičkih, zemaljskih efekata koje pravi naša matematika. Krajolik je uvek bio rezultat čudne, teške saradnje između prirode i čoveka. Ali sada je tu ta treća koevoluciona sila - algoritam, "Bostonski mešač", "Karneval". I moraćemo ih razumeti kao prirodu. Jer na neki način oni to i jesu.
Thank you.
Hvala.
(Applause)
(Aplauz)