Slashdot Mirror
Sir Tim Berners-Lee Lays Out Nightmare Scenario Where AI Runs the Financial World (techworld.com)
The architect of the world wide web Sir Tim Berners-Lee has talked about some of his concerns for the internet over the coming years, including a nightmarish scenario where artificial intelligence (AI) could become the new 'masters of the universe' by creating and running their own companies. From an article: Masters of the universe is a reference to Tom Wolfe's 1987 novel The Bonfire of the Vanities, regarding the men (and they were men) who started racking up multi-million dollar salaries and a great deal of influence from their finance roles on Wall Street and in London during the computerised trading boom pre-Black Monday. Berners-Lee said, "So when AI starts to make decisions such as who gets a mortgage, that's a big one. Or which companies to acquire and when AI starts creating its own companies, creating holding companies, generating new versions of itself to run these companies. So you have survival of the fittest going on between these AI companies until you reach the point where you wonder if it becomes possible to understand how to ensure they are being fair, and how do you describe to a computer what that means anyway?"
The one in 2010 was attributed to HFT bots."
The "flash crash" was attributed to HFT bots in the immediate aftermath. A fuller investigation determined that they were not the cause, and when HFT programs were disabled, that actually made the crash worse because of reduced liquidity. Programmed trading may have been a cause, but HFT != programmed trading.
It is for this reason that I propose a random small amount of time (say, 30 sec to 2 min?) be added to all trades.
What "problem" are you trying to solve?
HFT algorithms reduce transaction costs and reduce prices for everyone else.
Your "solution" will increase costs, and provide no benefit to the "little guy" (who doesn't have direct access to the market in the first place), since HFTs will just wait until the last microsecond before the window closes to place their trade.
A bigger problem is that most transactions (by volume) don't even happen in the public markets.
They happen in unregulated and opaque dark pools, and your "solution" will just make that even worse.