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Quantum Computing and The Financial System - Spooky Action at A Distance - , WP - 21 - 71, March 2021 - 8

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10 views

Quantum Computing and The Financial System - Spooky Action at A Distance - , WP - 21 - 71, March 2021 - 8

Uploaded by

Philipp Sellin
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© © All Rights Reserved
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8

which adjusts the number of qubits, among other things, for error rate and the quality of
connectivity between qubits. 6 IBM expects that quantum volume will be more than doubling
every year. Today's quantum devices have error rates that are too high, which are one of the
most pressing issues for quantum computers.

The race to build better quantum computers is intensifying, with companies using different
technologies. It is possible to classify early quantum computing hardware community into
two general categories or types. First, quantum computers based on the quantum gates and
quantum circuits are the most similar to our current classical computers based on logical
gates. 7 The other great family of quantum computers are analog quantum computers. These
quantum computers directly manipulate the interactions between qubits without breaking
these actions into gate operations. The best-known analog machines are quantum annealers.
Some experimental quantum annealers are already commercially available, the most
prominent example is the D-Wave processor, with over 5,000 qubits. This machine has been
heavily tested in laboratories and companies worldwide, including Google, LANL, Texas
A&M, USC. Companies are also using several strategies to implement physical qubits. For
example, Alibaba, IBM, Google, D-Wave, and Rigetti use superconducting qubits, IonQ uses
trapped ion qubits, while Xanadu and the University of Science and Technology of China are
developing photonic quantum computers.

For the foreseeable future, quantum computers are expected to complement, not replace,
classical computers. While desk quantum computers are far away, public can already have
access to quantum computing through cloud services provided by companies such as IBM
and D-Wave. People can use their classical computers to perform calculations on quantum
computers and receive the results back on their classical computers. In the near future,
quantum applications would probably be hybrid, since quantum and classical computing
technologies have complementary strengths (National Academies of Sciences, 2019).

III. POTENTIAL BENEFITS OF QUANTUM COMPUTING

Quantum computers can transform the financial system, as they can solve many problems
considerably faster and more accurately than the most powerful classical computers.
Simulation, optimization, and machine learning (ML) are three areas where quantum
computers can have an advantage over classical computers (Bouland et al. 2020; Egger et al.,
2020; and Orus et al. 2019):
• Simulations: Monte Carlo-based methods. The use of simulations by the financial sector
is ubiquitous. For example, Monte Carlo methods are used to price financial instruments
and to manage risks. However, Monte Carlo simulations are computationally intensive,
often leading to tradeoffs between accuracy and efficiency. Quantum computing could

6
“Cramming More Power Into a Quantum Device.”— IBM research blog, March 4, 2019.
7
While the final objective is to build fully error-corrected quantum computers, an intermediate objective is to
build practical commercial applications of noisy intermediate-scale quantum (NISQ) computers. Currently
noise is present in both quantum annealers and NISQ types of machine, limiting the complexity of the problems
that they can solve.

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