
In a dark room somewhere in North America, just a shade above zero degrees kelvin (about the same temperature as interstellar space) lies the embryonic form of a disruptor of epic proportions; a device which may be recorded in history as the first commercial leap into the world of quantum computing: the DWave One.
" [Quantum computing] will be completely and utterly gamechanging, driving progress and productivity like a sonic boom."
Todd Tobias, Director of Business Projects at ANZ MarketsDWave Systems, a Canadian startup, is manufacturing computers which exhibit quantum computing properties, and have even sold them to Google (at a reported $10 million a unit). Despite this, there is significant controversy about whether the DWave One is even a true quantum computer at all.
The jury is still out on whether the company has moved beyond proofofconcept and started to outperform normal (or ‘classical‘) computers, exhibiting a property known as ’quantum speedup’.
QUANTUM COMPUTING: WHAT IS IT?
Classical computers are built around the concept of the binary digit, or ‘bit’, which can be in one of two states – either a zero or a one.
Quantum computing however represents a major departure from this paradigm and is built around quantum bits  'qubits'  which due to the properties of quantum mechanics can be a zero or a one or both at the same time.
This fundamental behaviour means with enough qubits, certain types of calculations (including combinatorial optimisation) will be able to be performed exponentially faster, in a tiny fraction of the time taken by classical computing today.
Because of this, quantum computing will eventually deliver breakthroughs in fields such as weather forecasting, drug development, machine learning and quantum mechanics itself where specific types of probability based calculations are required and where the number of possible combinations of variables which need to be evaluated leave classical computing methods simply unsuitable.
THE TRAVELLING SALESMAN
One type of combinatorial optimisation problem which a particularly fascinating quantum computing process, called quantum annealing, will be wellsuited to address is the Travelling Salesman Problem, or TSP.
TSP seeks to answer the question: if a salesman needs to visit each city once and only once, and given a specific distance between each city, what is the shortest route possible which then returns him to his origin?
It seems like a very specific problem for which there can hardly be much appeal outside of the limited community of people who roam the land selling goods. But ‘cities’, 'distance' and/or the ‘salesman’ can be replaced with a multitude of other objects to solve different realworld problems, such as logistics (minimising distance travelled for deliveries), production of printed circuits (minimising circuit length to be printed for a given number of components, and even astronomy (minimising a large telescope’s scanning distance, and therefore time, to cover a given set of stars).
Whilst at face value it looks like it should be quite simple to solve, and there are a number of approximation methods which reduce computation time significantly, a full optimisation requires a bruteforce evaluation of every single possible combination of pathways between all 'cities'.
Plus, the number of possible paths is equal to the factorial of the number of cities; a fivecity problem has 120 combinations, a 10city problem has over 3.6 million combinations, a 20city problem has 2.4 trillion combinations, and a 40city problem has almost a trillion, trillion, trillion, trillion combinations.
The theories behind quantum computing are longestablished and it is generally accepted the main barriers to fully realising quantum computing are in engineering – how to create, manage and manipulate large numbers of qubits, for example.
However, hardly a week goes by now without the announcement of another step forward. Google is very serious about it, as is IBM.
Here in Australia, the Federal Government has invested significantly in a quantum computing capability at UNSW which has now opened its quantum computing labs, RMIT has also been making progress, and Prime Ministers are even beginning to turn heads with their awareness of the concepts.
MORE THAN MOORE
Moore’s Law, which is actually more of an observation, states the number of transistors on a computer chip doubles every two years, and it has largely held true over the 50 years since its inception.
But the maintenance of this trend requires either microchips to continually grow or transistors to continually shrink in size, and transistors are now approaching a hard lower limit – the size of atoms.
Few people outside of the integrated circuit industry are concerned with transistor densities, but Moore’s Law is a convenient proxy for what many of us do care deeply about: computer processing power.
Fully realised quantum computing presents a new paradigm, breaking the link between ‘number of transistors’ and ‘processing power’, enabling computing power to grow beyond the constraints of transistor size and rendering Moore’s Law at least somewhat irrelevant within that domain.
SECRETS LAID BARE
Like all things new and powerful, quantum computing presents not only opportunities but major threats. Principal amongst these is its ability to crack many of the most popular types of encryption.
RSA public key encryption, the most common type, is considered to be safe at the moment because it requires a trialanderror bruteforce attack to defeat it (by finding a public key’s prime factors or factorising it), and such attacks using classical computers can be expected to take many years, if not hundreds or thousands of years, to succeed.
But quantum computing, when employing something called ‘Shor’s algorithm’, will relatively effortlessly factorise keys, rendering the RSA encryption method (as well as others such as Elliptical Curve Cryptography) unsecure.
In the absence of any remedial action, private information encrypted in this way could not be transmitted over the public Internet without being considered to have been compromised.
It’s not just private information which could be revealed – the muchvaunted Blockchain is fundamentally encryptionbased and completely reliant on the security of the encryption methods used in its formation.
If the encryption is not secure, the whole edifice crumbles and there is much debate about the quantumsafety of the blockchain (distributed ledger) and Bitcoin in particular.
In the US, the National Security Agency is so concerned about the quantum threat they’re beginning to transition to quantumresistant encryption methods, in anticipation of an eternally evolving information security war between protectors and attackers tilting sharply upwards at a new quantumenabled gradient.
QUANTUM CHEAT SHEET
If you want to understand quantum mechanics, the science of the extremely small, you must firstly accept objects that tiny do not act like anything we encounter in our daily lives.
Objects can appear in two places at once, can teleport, and can even interact across distances with nothing in between. Light can behave like a particle and matter can behave like a wave.
• Quantum: For the purposes of quantum mechanics, it means a ‘packet‘. Energy, light and particles can only appear in discrete, or quantised, amounts; they cannot appear in continuous infinitesimally variable amounts. What we know as a ’photon‘ is a single quantum, or packet, of light.
• Superposition: Unlike classical ’bits‘ which can either be in a 0 or a 1 at any time, qubits are considered to be in all possible states concurrently.
This is one of the main properties underpinning the immense power of quantum computing and allowing qubits to handle so much more information than classical bits. It is not until we measure the state the qubit collapses into only one state.
• Entanglement & teleportation: The strange phenomena by which actions on one particle will immediately affect any particle entangled with it, even when separated by significant space. Einstein called it ‘spooky action at a distance’, which has now been physically proven.
• Tunnelling: Another strange phenomenon in which particles can, with a low probability, borrow energy from their surrounds and tunnel to the other side of an otherwiseinsurmountable barrier.
QUANTUM FINANCE
It almost goes without saying that the immense power of quantum computing will deliver extreme benefits within financial services, with highly complex economic and portfolio simulations able to be performed within much shorter timeframes.
More specifically, it will present a giant leap forward in the continuouslyescalating arms race of algorithmic trading.
The principal determinant of success in algorithmic trading right now is the ability to make rapid, smart decisions based on accurate information.
The highly temporal nature of the information limits the complexity of the algorithms which can be used to make decisions; if you take too long the outcome will be invalid because it was determined using information reflecting a market which has since moved on – from the good old days, less than a fraction of a second ago!
Considering this, the complexity of decisions are limited by the accuracy and freshness of your information, the quality of your algorithms, and the power of the computer feeding one through the other to arrive at an actionable outcome.
A fully realised quantum computing capability will massively increase effective computing power, so with properlyadapted algorithms much more complicated calculations will be able to be performed in the same space of time.
This will significantly increase the quality of the decision which can be made before the market moves and therefore the quality of the financial outcomes too.
The emerging field of Quantum Finance is seeking to address this, and indeed financial institutions are beginning to invest.
MORE THAN JUST THEORIES
Not only is quantum mechanics poised to deliver practical applications around quantum computing but Einstein’s theories of Special and General relativity (which amongst other things show time is affected by both gravity and velocity) are vital in the operation of the clocks aboard Global Positioning System (GPS) satellites.
Without constant correction due to the effects of time dilation (a concept thrust into the popular lexicon via the scifi movie Interstellar) these clocks would gradually drift out of sync due to the low gravity and high speed experienced by the satellites and our navigation accuracy would therefore shift by many kilometres every day, rendering the system virtually useless.
LEAPING FORWARD
Once the remaining engineering challenges of quantum computing are resolved and optimal approaches established, not only will we see the growth of the quantum hardware manufacturing industry, but also the rise of associated areas.
These include industries such as quantum software development, quantum cloud computing (‘Quantum as a Service’ perhaps?), and certainly a plethora of consulting companies covering management, security/encryption and even marketing – all helping organisations to leverage the full power of the new technology.
But prior to that, even more powerful than a fullyrealised quantum computing capability would be a secret fullyrealised quantum computing capability. The NSA is apparently already well advanced.
Before any major success is announced, will there be the faintest telltale indications of quantumaided performance? A national security secret mysteriously uncovered, an investment company experiencing implausibly great returns?
And will we see the creation of modern folklore in order to hide the existence of a secret quantum computer, like how the amazing ‘powers’ of carrots were used to hide the existence of radar in WWII? Maybe we’ll never know – but it will be fascinating to watch.
Quantum computing will not replace classical computing for most uses. Quantum mobile phones and laptops are unlikely and you won’t watch a movie on a quantumpowered television.
For most applications it would be serious overkill. But for certain critical purposes which require the use of particular types of algorithms, it will be completely and utterly gamechanging, exponentially increasing the power of the computational toolset available to humanity and driving progress and productivity like a sonic boom before it.
Todd Tobias is Director of Business Projects at ANZ Markets
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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