Future Archives - Welcome to Quantum Guru https://www.quantumcomputers.guru/news-tags/future/ Fri, 01 Apr 2022 18:30:19 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://www.quantumcomputers.guru/wp-content/uploads/2021/11/cropped-cropped-favicon-32x32.png Future Archives - Welcome to Quantum Guru https://www.quantumcomputers.guru/news-tags/future/ 32 32 Financial Institutions looking up towards Quantum https://www.quantumcomputers.guru/news/fintech-looking-up-towards-quantum/ https://www.quantumcomputers.guru/news/fintech-looking-up-towards-quantum/#comments Thu, 17 Jun 2021 17:09:30 +0000 https://www.quantumcomputers.guru/?post_type=news&p=2065 “While it’s still in its infancy, quantum computing through simulation is already showing tremendous potential, particularly in solving complex optimization problems,” says Jerry Silva, research director, Global Banking at IDC. “As the hardware underlying quantum computing matures even further, those same solutions will reach exponentially faster speeds and be more and more available to the […]

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“While it’s still in its infancy, quantum computing through simulation is already showing tremendous potential, particularly in solving complex optimization problems,” says Jerry Silva, research director, Global Banking at IDC. “As the hardware underlying quantum computing matures even further, those same solutions will reach exponentially faster speeds and be more and more available to the broader banking market.”

In 2019, BOA strategist said “Quantum Computing would be as revolutionary in this decade as smartphones were in last decade”. Highly complex and exceptionally fast models are the primary use cases that will require Quantum computers for fast and practical execution. For example, in valuation, the ability to identify quickly an optimal risk-adjusted portfolio is likely to create significant competitive advantage. For loan and bond portfolios, more precise credit exposures will lead to optimized decisions. The risk in payments and transfers can be minimized using quantum encryption.

Major financial activities including asset pricing, securities pricing, portfolio optimization are implemented using complex algorithms and the system should to be able to assess a range of potential outcomes. Decade old setups though workable are neither effective nor accurate, as was shown during the financial crisis of last decade. The events with lowest probability occurred more frequently.

In this data-loaded world, there is sheer need to calculate probabilities more accurately. Day by day conventional computers are getting pushed to its limit for calculation. Several banks are turning to a new generation of processors that uses principles of quantum physics to masticate large amount of data at superfast speed. 

Using quantum computing to analyze effectively large and unstructured data sets can help banks improve customer service and enable them to make better decisions. It is believed that financial institutions that can harness quantum computing are likely to see significant benefits.

Financial Institutions showing confidence in quantum computing:

  • JP Morgan
  • Citigroup
  • Wells Fargo
  • Mizuho
  • Mitsubishi Financial Group
  • BBVA (Spanish Multinational Financial Service Company)
  • Caixa Bank
  • Standard Chartered

Financial models in use:

  • A Monte Carlo simulation is a model used to predict the probability of different outcomes when the intervention of random variables is present.
  • Monte Carlo simulations help to explain the impact of risk and uncertainty in prediction and forecasting models.
  • A variety of fields utilize Monte Carlo simulations, including finance, engineering, supply chain, and science.
  • The basis of a Monte Carlo simulation involves assigning multiple values to an uncertain variable to achieve multiple results and then to average the results to obtain an estimate.
  • Monte Carlo simulations assume perfectly efficient markets.
  • The Black-Scholes Merton (BSM) model is a differential equation used to solve for options prices.
  • The model utilizes five inputs: asset price; strike price; interest rates; time to expiration; and volatility.
  • The Black-Scholes model won the Nobel prize in economics.
  • The standard BSM model is only used to price European options as it does not take into account that U.S. options could be exercised before the expiration date.
  • The Heston Model is an options pricing model that utilizes stochastic volatility.
  • This means that the model assumes that volatility is arbitrary, in contrast to the Black-Scholes model that holds volatility constant.
  • The Heston Model is a type of volatility smile model, which is a graphical representation of several options with identical expiration dates that show increasing volatility as the options become more ITM or OTM

Source: https://www.mckinsey.com/industries/financial-services/our-insights

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]]> https://www.quantumcomputers.guru/news/fintech-looking-up-towards-quantum/feed/ 5 Bitcoin Blockchain and Quantum Computer-I https://www.quantumcomputers.guru/news/the-bitcoin-blockchain-and-quantum-computer/ https://www.quantumcomputers.guru/news/the-bitcoin-blockchain-and-quantum-computer/#comments Wed, 12 May 2021 11:58:24 +0000 http://www.quantumcomputers.guru/?post_type=news&p=495 What is Cryptocurrency? Cryptocurrency is a form of contactless payment for online (and in future offline) goods and services. The company issue its own cryptocurrency called tokens for buying its goods or services. It is similar to arcade tokens or casino chips and requires exchanging real currency for the cryptocurrency. Cryptocurrencies work based on a […]

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What is Cryptocurrency?

Cryptocurrency is a form of contactless payment for online (and in future offline) goods and services. The company issue its own cryptocurrency called tokens for buying its goods or services. It is similar to arcade tokens or casino chips and requires exchanging real currency for the cryptocurrency.

Cryptocurrencies work based on a decentralized technology called blockchain. Blockchain ledger spread across many computers to records transactions making it more trustworthy and secure.

Major Cryptocurrencies in circulation

  • Launched in 2009, bitcoin is the world’s largest cryptocurrency by market capitalization
  • Unlike fiat currency, bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain
  • Bitcoin’s history as a store of value has been turbulent; it has gone through several cycles of boom and bust over its relatively short lifespan
  • As the earliest virtual currency to meet widespread popularity and success, bitcoin has inspired a host of other cryptocurrencies in its wake

  • Ethereum is an open-source blockchain-based platform used to create and share business, financial services, and entertainment applications

  • Ethereum users pay fees to use dapps. The fees are called “gas” as they vary depending on the amount of computational power required

  • Ethereum has its own associated cryptocurrency, Ether or ETH

  • ETH is now second only to Bitcoin in market value

  • Tether (USDT) is a stable coin, a type of cryptocurrency which aims to keep cryptocurrency valuations stable

  • Tether is used by crypto investors who want to avoid the extreme volatility of other cryptocurrencies while keeping value within the crypto market

  • In April 2019, the New York Attorney General accused Tether’s parent company of hiding an $850 million loss

  • Tether tokens trade under the USDT symbol

  • Binance Coin is the cryptocurrency issued by the Binance exchange and trades with the BNB symbol

  • BNB was initially based on the Ethereum network but is now the native currency of Binance’s own blockchain, the Binance chain

  • Every quarter, Binance uses one-fifth of its profits to repurchase and permanently destroy, or “burn,” Binance coins held in its treasury

  • Binance was created as a utility token for discounted trading fees in 2017, but its uses have expanded to numerous applications, including payments for transaction fees (on the Binance Chain), travel bookings, entertainment, online services, and financial services

Impact on Bitcoin Blockchain

Deloitte Warns 4,000,000 Bitcoin Worth $28.6 Billion Vulnerable to Quantum Attack, presently which is about 25% of the Bitcoins in circulation.

Bitcoin is a decentralized system for transferring value. Unlike the banking system where it is the responsibility of a bank to provide customers with a bank account, the user of Bitcoin is responsible for generating his or her own random address. By means of a simple procedure, the user’s computer calculates a random Bitcoin address (related to the public key) as well as a secret (private key) that is required in order to perform transactions from this address.

Moving Bitcoins from one address to another is called a transaction. Such a transaction is similar to sending money from one bank account to another. In Bitcoin, the sender must authorize their transaction by providing a digital signature that proves they own the address where the funds are stored. It is believed that someone with an operational quantum computer and public key could falsify this signature, and therefore potentially spend anyone’s Bitcoins!

One of the most important features of Blockchain is immutability. Blockchain data, hashes and signatures are perpetual and therefore liable to attacks by hackers. Quantum technology can simply hash calculations and make hash collisions retrieval achievable thereby compromising blockchain security. Also, blockchain signatures can allow attackers to retrieve the associated private key.

So, current blockchains will require its own migration. This will likely take the form of fork or a protocol update, creating a new post-quantum chain or addresses and a limited window of time for users to migrate their data and assets.  Even if everyone takes the same protection measures, quantum computers might eventually become so fast that they will undermine the Bitcoin transaction process. In this case the security of the Bitcoin blockchain will be fundamentally broken. The only solution in this case is to transition to a new type of cryptography called ‘post-quantum cryptography’.

Adapting blockchains to the post quantum era will require increased storage and computing resources. The evolution of technology will account for that in most cases. Perhaps IoT applications, where resource constraints are greatest, will have greater difficulty in adapting.

Read next part : Bitcoin Blockchain and Quantum Computer – II

Source: https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-blockchain.html

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