Friday, March 18, 2016

AlphaGo home, half life, T+2 down under...I (didn't) take a pill in Ibiza

Much this week has been made of the 'success' of AlphaGo.

This got me thinking about success. What is success?...in either human terms or machine terms.

Some commentators remarked that AlphaGo made some 'unusual' moves. And these moves were at a turning point - AlphaGo thought it had the game in the bag and then it just changed gears to defend the win. i.e. The machine just wants to win...it doesn't differentiate winning by a point or running up 50 points. Bit like playing a soccer game and after scoring a goal you spend the rest of the day doing that 'off side' rule thing they do (sorry for the over simplification - but you get the point). 
AlphaGo is a win and grind. It doesn't have a killer instinct or 'match flare'. The 4th game that Lee Sedol won was based on an offensive play. The boy can play 'Big Points'. Tennis is a bit boring when it is all percentage shots.

So what is AlphaGo vs. Lee Sedol? Is it some kind of AI and neural network? I think it is a big computer with millions of data points. It peaked my interest in how it was coded and the process they went through. Unfortunately this is a paywall paper...so I haven't read it but what is interesting is all the data tables, which you can see:

Lee Sedol is one super efficient process. It doesn't look like he consumes a lot of food. My guess is that AlphaGo consumes vastly more amounts of energy (think watts) as it trawls through all the permutations of life....including the known universe of AlphaGo games. Big data to me. What Lee Sedol has done is eliminate thousands of data points that are pretty useless. He's applied his 'bounded rationality'. People forget...and forgetting can be a gift (don't carry some of that redundant clutter with you - Beats - shout out to you!) AlphaGo has a big brain. If we evolved like Alpha go I visualize an alien form with a top heavy head.
https://en.wikipedia.org/wiki/Bounded_rationality

Lee Sedol did mention that in human match play you get a lot of visual clues too - breathing, movement, gestures etc. AlphaGo has a pretty good poker face by all accounts. So under stress, AlphaGo...is not stressed. Is this good? I'm not sure. In the human world we can do some pretty powerful peak processing is a stressed environment. On minimal data points we can quickly choose, fight, flight or freeze. (OK, I might have picked option one a bit too often).

And then we get to pattern recognition. And this is where the whole AI point comes for me. What AlphaGo is magic at is playing the instruments...every instrument in the orchestra....but can he compose a melody?AlphaGo is always the same or a statistical derivation of what has gone on before. Lee Sedol is playing with the pieces - he's being creative.

Now I don't think there were many ethics in the game. But if there were, my guess is AlphaGo would have played by the rules...the coded rules (Ohhh, scary, man V machine). Lee Sedol acts on an entirely different plane.

....They collected moves from these machine-versus-machine matches and fed them into a second neural network. This neural net trained the system to examine the potential results of each move, to look ahead into the future of the game....
...AlphaGo had calculated that there was a one-in-ten-thousand chance that a human would make that move...
http://www.wired.com/2016/03/two-moves-alphago-lee-sedol-redefined-future/

Anyway, enough AlphaGo bashing. What I think is really exciting, is not the sheer industrial beauty of computing power, but rather the analysis of the processes to win. This is trying to break down emotional intelligence into a process. An ontology if you like. And it is by looking, and measuring, the process that we can begin to define limits, tolerances and possibly behaviours. This is stuff we all know, but don't accurately measure.

AlphaGo will be able to serve me a brilliant beer, no doubt. I might even shock him with an order for a G&T or a green beer on St Patricks day. There is a better than 1:10K chance he'll have the stock to hand. However, if I want to create a new cocktail, with a raspberry twist...game over.

There is a story of a famous photographer in New York who went to a dinner party. The Host greeted him and said "I have seen your photos and they are amazing! You must have a fantastic camera". Later on, during the meal, the photographer said "this dinner tastes delicious, you must have a fantastic kitchen".

Happy St Patrick's Day!
http://www.history.com/topics/st-patricks-day/history-of-st-patricks-day/interactives/st-patricks-day-by-the-numbers

Piccie:
US Bank Consolidation. Unfortunately, this did not make the cut this week.
https://image-store.slidesharecdn.com/0db28a3b-8b6d-47e4-b92e-35811c566b9b-original.jpeg

Have a great week-end.
(I won't be playing computer chess).

S
www.clearingandsettlement.blogspot.com


Blockchain

Bitcoin mining rate and half life.
The current Bitcoin reward is 25 BTC per block.
All the half life stats here:
http://www.bitcoinblockhalf.com/

I also think blockchain will introduce a whole new, nuanced, vocabulary.
For example coinbase (the field that allows the block reward) as opposed to the wallet provider www.coinbase.com
Good glossary here:
https://bitcoin.org/en/developer-glossary

For example what are the Rails that blockchain can run on?
Wht is NXT?
https://nxt.org/what-is-nxt/

Ethcore introduce parity....
....the fastest and lightest Ethereum block processing engine amongst the available clients
(their claim - not mine!)
https://ethcore.io/index.html

BitShares, Lisk Hop on Azure Blockchain Bandwagon
So, who's on MS Azure BaaS?
BitShares an open-source, decentralized asset exchange software platform
Lisk, a cryptocurrency and JavaScript-based developer platform for custom blockchains
Slock.it allows objects to be securely sold, rented or shared without a brokering agent.
Syscoin services for merchants, including escrow, digital asset storage and other buying and selling services.
Augur, an Ethereum blockchain-based decentralized prediction market platform.
http://www.eweek.com/cloud/bitshares-lisk-hop-on-azure-blockchain-bandwagon.html
This was a good slide share on blockchain from Ethereum
http://www.slideshare.net/gavofyork/basic-ethereum


Martkets

Goldman revamps electronic stock trading to catch rival
Goldman hired the tech-savvy Mahajan to revamp the business in March 2015. Since then, he has hired dozens of technologists and support staff to elevate Goldman's position in a fast-growing slice of the market and win back business from its chief competitor, Morgan Stanley.


Welcome, ASX ad NZX to T+2!

Sometimes we overlook the context of materiality and proportionality
notes: 2015 ASX did 190 million trades..in the year...for a notional of Aussie 1,112.5byn
notes: 2015 NZ did 1.4 million trades...in the year...for a notional of Kiwi 40byn.
http://www.asx.com.au/services/t2.htm
http://www.asx.com.au/documents/investor-relations/2015AnnualReport.pdf  (p68)
https://nzx.com/regulation/T2-settlement
https://www.nzx.com/files/attachments/230592.pdf
Today Chi-X (oops, now Bats) did 1byn trades for a 10 byn Euro notional

Integration of market infrastructure
This is a 'promo' clip from the ECB trying to make the EuroSystem, SEPA, Target2 and T2S, more accessible (I guess)
I'm not sure it will sway any Brexit 'out'ers or leave my local MP with an interest in Market Structures as a vote winner.
https://youtu.be/hc9ntZmB0i8

The European Supervisory Authorities (EBA, EIOPA, ESMA - ESAs) published today the final draft Regulatory Technical Standards (RTS) outlining the framework of the European Market Infrastructure Regulation (EMIR).

Duco And CME Group Team Up To Provide Innovative Data Control Service To Member Firms
http://www.thestreet.com/story/13494718/1/duco-and-cme-group-team-up-to-provide-innovative-data-control-service-to-member-firms.html


Stuff

I loved this "Dilemma" - brought a tear to my eye.
https://youtu.be/R6xLcItSJN8

I found this interesting in how a message can be 're=purposed'
https://medium.com/@MikePosner/i-took-a-pill-in-ibiza-2f7de1406c6d#.mjqcjsnt6
...to this...
https://youtu.be/foE1mO2yM04

Fracking : An English duck that will never fly
....Because burning gas is more efficient than coal, it provides a 50 per cent advantage in terms of emissions of CO2 emitted per unit of energy. However that is only half the story because of the methane that escapes into the atmosphere during the exploration, production, storage, and distribution phases of the gas life-cycle....
Methane is the second most important greenhouse gas with a Global Warming Potential (GWP) 87 times greater than an equivalent mass of CO2 over a 20 year time frame. If fugitive emissions of methane exceed 2 per cent of production, then gas is no better than coal from a climate change perspective.


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