Quantum Supremacy vs Quantum Advantage
The advantage for Hedge Funds is closer than you might think
I’m sure many of you have heard of some of the quantum computing evolvements over the last several years. Some of you may follow it more closely than others, so for the purposes of this article, I will do my best to focus on practical application to quantitative research, rather than the broader use cases.
In short, quantum computing will enable parallel processing where classical is linear. This allows for the computation of massive data sets simultaneously which not only means analysts can begin digging deep into their dark data uncovering insights that aren’t possible today, but also create hyper intelligent machine learning algos that train at a fraction of the time.
One of the challenges we foresee within hedge funds specifically, is deciding which workloads make sense to run quantum vs classical. It’s a common misconception that quantum computers will overtake classical computers when in fact, they will augment them.
This is important when we think of quantum advantage vs supremacy. Let’s start with defining the difference between the two. Quantum Computing Inc has a great definition breakdown:
Quantum advantage refers to the demonstrated and measured success to process a real-world problem faster on a quantum computer than on a classic computer. Since QPUs (quantum processing units) are not yet scalable enough to run some of the larger real-world problems, it could be years before we reach true quantum advantage.
Quantum supremacy refers to the demonstrated and measured ability to process a problem faster on a quantum computer than on a classic computer. Note that it’s, any problem, not a real-world problem. Which is a different situation that deserves a different perspective.
To give you an example, today you might see quantum supremacy when running a theoretical experiment on a random number generator and prove that the quantum tooling is superior, but this experiment won’t, in and of itself, bring quantum advantage to solving large scale encryption problems.
Similarly, you could use quantum computers today to run certain algorithms, this doesn’t mean it’s powerful enough yet to run ones complex enough to bring an advantage to your trading business.
Another misconception worth mentioning is that Quantum Supremacy will be some big bang event that just breaks everything. And while it will certainly bring disruption to areas like encryption & crypto currency, there will be a gradual release of the technology as it matures that enables young, quantum focused companies like us to get in and begin our R&D.
Accenture does a great job of breaking down this gradual transition in the below graphic, along with how they see quantum disruption across the different use cases.
When it comes to quantitative research, what we really care about is quantum advantage.
- Which of your fund’s use cases and models would benefit from the quantum augmentation?
- How much would it cost to run those in a quantum cloud service?
- What’s the overall ROI?
- Who within your team is capable of deploying and managing the quantum services?
That’s where we are starting our research.
The 1000 qbit condor processor from IBM is slated for 2023. That is when we expect most hedge fund use cases to gain quantum advantage. So, it’s not far off!
If you’re interested in being part of our pilot program, reach out.
