Quantum computing is becoming relatively well known. However, another related technology is also emerging that might be groundbreaking and even have applications in trading. These are the intriguingly named quantum networks.
A quantum network is based on transmitting quantum information, such as states and entanglement, and distributing this to wider networks. Succinctly put, while quantum computers process quantum information, quantum networks transport quantum information.
Traders are familiar with classical networks. In these, information in the form of bits (states of 0 or 1) is transmitted. This can happen via changing electrical voltages or currents in an Ethernet cable, or by pulses of light in optical cables. Optical cables are used in low-latency environments such as data centers, as they can transmit signals at greater speed than electrical signals. Signals can also be transmitted wirelessly, where the signal is modified to encode digital information. An example is microwave transmission, which can be used for high-frequency trading. But at the quantum level, the information is fundamentally different.
The core element of quantum computing is a qubit. A classical bit is in a state of either 0 or 1. A qubit can exist in a superposition of both basis states. This is part of the revolutionary potential of the technology, as it can create a much more complex computational space compared with classical computers.
What this means is that the kind of information that is represented and processed by a quantum computer is different from that generated by a classical computer. A quantum network is designed to transmit that quantum information.
The information transmitted can include qubits (which are quantum states), superposition, entanglement, quantum measurement outcomes, and quantum error-correction. This is fundamentally different from the transmission of binary information (0s and 1s) over classical networks.
A quantum network uses photons to carry quantum information. Entanglement is distributed between distant nodes because both ends need to share an entangled pair of qubits before they can perform quantum networking tasks; this is analogous to the way a classical communication network establishes links between devices. Quantum and classical communication are used to transfer and process quantum states.
Unlike classical networks, quantum networks require specialized hardware capable of transmitting and preserving quantum information. Single-photon sources carry quantum states, quantum memories temporarily store them, quantum repeaters help extend communication over long distances, and single-photon detectors recover the transmitted information.
Why is the photon at the heart of these networks? Because they satisfy two important conditions: they can carry information over long distances and react weakly with their surroundings (this helps preserve fragile quantum states).
Compared with classical networks, quantum networks offer several potential advantages. These include quantum-secure communication, connecting quantum computers into distributed quantum systems, transmitting quantum information, distributed quantum sensing, and very accurate clock synchronization between distant locations.
For traders, the last two are of note because they have potential applications to timing and measurement across geographically distributed systems. Distributed quantum sensing can potentially enhance the accuracy of the timing systems underlying high-speed financial networks, while clock synchronization can help determine the sequencing of orders and market events. These are both issues that become more critical as trading frequency increases. But already, retail traders plug into high-speed classical networks where timing and synchronization play an important role.
So why might quantum networks be more important in a sense than quantum computers? Well, this is based around the observation that networks helped transform classical computers. Instead of relying on a big mainframe in a sterile room, we can have many computing devices connected in a network. At the highest level, supercomputers today are not mainframes; they are massively parallel networked devices. On the global scale, the internet is a system of networked computing devices.
One of the most significant potential roles of quantum networks is connecting quantum processors into distributed computing systems. Just as modern supercomputers combine thousands of processors through high-speed classical networks, future quantum computing may ultimately rely on quantum networks to combine the capabilities of multiple quantum processors.
Networks do not eliminate hardware errors, but they can improve the reliability and scalability of computing systems by distributing resources and fault-tolerance mechanisms across multiple processors. This principle underpins much of modern distributed computing. Whether quantum computers can be scaled like this to create something powerful and unique is an open question. But the tantalising possibility remains that quantum networks may help transform quantum computing as they did with classical computing.
Quantum networks may benefit traders in the future by improving the infrastructure behind financial markets. Potential advantages may include more secure communications and more precise timing. Additionally, networked quantum computers may enhance activities such as portfolio development and optimization. Where traders may connect with this is unknown; it may be simply through their experiences with brokers and their connections with liquidity providers and institutions.
