Authored by Andrew Dunn, Practice Lead, Streets Consulting
Get comfortable with “Quantum”
One of the things that makes UK FinTech such an amazing sector to work in, is the relentless pace of innovation. As the market embraces the brave new world of complex AI, agentic automation, and ever-cleverer software and systems, the next big epoch-shattering invention is firmly on its way, and it sounds way cool and is very fun to say: Quantum Computing.
At a recent FinTech conference, there was a panel on quantum computing, where the participants tried to explain it in two minutes of stage time, before moving on to why it is important and what is going on currently. This is an impossible task, but they did an incredible job of explaining the beginning of the theories and what you need to know to start down this path of thinking. But I thought I might expand on it here.
Bear with me, it will take longer than 2 minutes. This is going to be a long and crazy journey, but there are real-world implications, I promise.
Start by forgetting everything
Following my degree in Physics with Astrophysics, and despite my attempts to escape mathematics at that ‘ninja’ level after graduation, I seem to have ended up where I began, considering the counter-intuitive world of the subatomic, where traditional rules are torn up, and reality goes, well… nuts. There really is no other word for it.
To be able to even think about quantum mechanics (QM), Master Yoda’s mantra is very useful: “You must unlearn everything you have learned” about the natural world. Take everything you think you know about reality and throw it in the recycling bin.
My hero in physics, Richard Feynman, who won the Nobel Prize for physics in 1965, is widely cited as saying, “Anyone who says they understand quantum mechanics is lying.”
Quantum mechanics is an alien language to all humans, even to those who have studied it. It is full of alien concepts. And Mother Nature in all her beauty and complexity, does not care one jot whether you understand her methods or not. One of my tutors at university once said to me: “It just is this way, you have to accept it. Your only choice is to get over it.”
In many ways, QM is, perhaps ironically, the most well-developed, well-tested, and well-corroborated branch, arguably in all of science. It’s just that what it implies is absolutely bonkers.
And we know that it works, from the lightbulb, to the latest smartphones and supercomputers, the Sun burns because of it, every atom in every cell in your body obeys it, even photosynthesis in plants relies on quantum mechanics. So if even trees get it, why can’t we?
Size matters
If you exist on a macro scale, as we do, you obey the laws of general relativity and classical ‘Newtonian’ mechanics. If I throw a ball with this much force, in this direction, I can tell you where it will land; if I shoot a rocket in this direction, with this velocity, this is where it will land on Mars. Big ticks in those boxes. You push something harder, it goes faster and further. If you throw something in the air, it comes down again, because of gravity, DUR! It’s obvious isn’t it? My four-year-old knows that!
Hot things warm up cold things, cold things cool down hot things; pressure makes things behave differently, a submarine is crushed like a beer can 9 miles underwater. How much stress can this steel bar take before it breaks? No problem, physics can answer all of this for you, and it is really straightforward to imagine why. General relativity, less so, but that is a different blog, but suffice to say that without it, GPS/sat nav wouldn’t work.
So our macro world of gravity, length, depth and breadth, and even time, materials science, heat and cold, speed and force, all sort of makes sense to us, because this is the world we live in. We have learned the way the world works by walking around in it and doing things. We’ve bumped our heads, we’ve burned our fingers, we’ve slipped on ice. It all sort of makes logical sense, doesn’t it? You don’t need a degree in physics to know what will happen if you throw a cricket ball at a window.
The weird thing is, it depends on how ‘big’ you are. The natural laws that govern the ‘large’ do not govern the very small; something else is in charge at that scale.
Never trust atoms; they make up everything
The atoms that make us up do not care about any of these macro ‘rules’. They reject your received wisdom. They have their own set of laws. If you were to shrink to the size of an atom, you would be subject to the laws of this different jurisdiction. Where intuition is worse than useless, and the usual human understanding of the world is a significant hindrance. Welcome to the insane world of quantum mechanics.
Why ‘Quantum’?
The word ‘quantum’ itself comes from the idea that energy is not a continuously sliding scale. Think of it like this: If you hold a ball 1 metre above the floor and drop it, it will hit the ground with a certain force. If you hold it 1.1 metres above the ground, it lands with slightly more force, because you have given it slightly more potential energy by holding it higher up. Add another millimetre in height, slightly more force on landing, and so on.
What we found out about atoms is that they do not work like that. The energies that atoms, electrons, protons, and photons (packets of light/energy) have, work more like the rungs of a ladder. There is no step between steps. If you raise your foot and put it down, it keeps dropping until it hits the rung below. To reach the next rung, you have to raise your foot above a certain height;, only then can it drop to the rung above.
If we did our ball drop experiment, this would mean that dropping a ball from 1.1 metres, would not land with slightly more force. You would have to drop it from a certain specific height, a certain distance higher up, to generate more force on landing.
This is how energies work at the subatomic level. Energy is not a smooth distribution of all possible values, it is in steps – it is in ‘quanta’ of energy, it is ‘quantised’. So this is why the whole mad show is called ‘quantum’.
That’s not that crazy, right?
Correct. It is perhaps surprising, but not completely mad – although it was a revolutionary discovery. But we are just getting started.
In the quantum world, things are too small to see and move too fast. Electrons ‘orbit’ the atomic nucleus (Protons and Neutrons) at fractions of the speed of light. So they don’t really orbit like the moon does around Earth. They are more like a cloud of electrons around the centre of the atom, all ‘blurry’.
Are we ready for crazy?
When we look at what these particles are, it turns out they are not really particles, not completely, and not all the time. When it suits them, they can behave like waves. If we test to see if light is made of particles, lo and behold, it is! So when we test to see if light is a wave, lo and behold, it is! Wait, what?
This is called ‘wave-particle duality’. And I’m afraid you just have to accept it. Turns out that our macro concepts of waves (on water) and particles (of sand) just do not fit in the quantum world. But here’s the really hard thing to accept: their behaviour depends on what you are looking for, and even, if you are looking at all.
The Double-Slit Experiment, originally carried out by Thomas Young, using light, as far back as 1801,
first identified wave-particle duality.
What’s more, the theory, rock-hard maths and the complicated experimentation show that in nature’s quantum world:
This is quantum mechanics, where just by ‘looking’ at something, you force it to change its behaviour.
Schrödinger’s cat – Erwin Schrödinger only came up with the famous cat analogy to explain how absurd he thought the idea of superposition was in the real world.
It’s like if aliens wanted to know what happens in the House of Commons, they rip the roof off while the house is sitting, and they write in their notebooks: “In the House of Commons, people run and scream and hide for their lives.”
It sort of makes sense when you think about it like this. Well, almost.
What’s all this got to do with computers?
I’m getting there. A computer is a mathematical machine, which uses binary (1s or 0s) mapped onto logic gates (yes or no/true or false), mapped onto circuitry (electric current is off or on) to perform calculations. It uses algorithms to do this – pieces of code that tell the binary 1s and 0s what to do. So to perform a calculation, the computer must go through a series of steps to get to the answer. It can run complex calculations and get to the answer quicker than any human. But it must go through the steps and it must rely on yes/no statements, is it 1 or is it 0? We call these pieces of binary information ‘bits’. I am aware that this is a massive simplification.
Computers got a lot faster and more powerful by making ever more complicated integrated circuits and miniaturising enormous cities of circuitry onto smaller and smaller microchips.
But we are reaching a natural limit. There is only so much real estate on a chip that is possible. And if we miniaturise any further, well, we enter the new jurisdiction, where quantum mechanics takes over, and your whole computer grinds to a halt, because, as we’ve said here, atoms don’t care about your feelings, electrons go rogue and start doing insane things like being in multiple places or states at once, tunnelling out of systems, doing nothing and everything at the same time. How would an algorithm run then?
Why are you telling me all this, Andrew? I didn’t ask to have my brain melted
Hang in there!
In the quantum world, there is no such thing as 1 or 0, because of superposition. There is no ‘certainty’ there is only ‘probability’. The 1 and the 0 have become Schrödinger’s Cat, both alive and dead at the same time.
Binary needs a rethink, because that piece of information, that ‘bit’ does not need to be coded as a 1 or a 0. In the quantum world, it is 1 and 0, at the same time, and every possible combination between the two extremities. What you end up with in the quantum world is a probability curve, ranging between 0 and 1. And it will stay like that until the system is ‘observed’ or in other words, measured.
This is not a ‘bit’, this is a quantum bit or ‘qubit’. And because of entanglement, we can have qubits in pairs, where what happens to one, happens to the other instantly, with no lag whatsoever.
This is supposed to be getting easier to understand, Andrew
No, it isn’t, and I warned you about this at the beginning. This is QM, here be monsters!
Nobody but Mother Nature understands it. But also remember, we don’t need to understand it, to use it.
Now, let’s imagine we could make a quantum computer that works.
It wouldn’t work using binary in the traditional way. And it wouldn’t be able to do calculations in a classical linear way. So what does that mean? Why would we make computers worse?
Think of a mathematical problem as being a maze.
Let’s say a traditional computer follows every possible path, then crosses each path off when it doesn’t work. It iterates this process until it finds the answer. That’s what a classical algorithm does. This is your spinning wheel on the mouse cursor, when the computer is ‘thinking’. This is how a computer does everything. From 1 + 1, to generating high-end graphics of realistic dinosaurs and making Grand Theft Auto 6, or choosing the best venue and price for an equity trade.
Back to the maze. You can think of a quantum computer as existing across the whole maze at once. Because of superposition, it occupies every possible solution simultaneously. In essence, it ‘floods the entire maze with water’, and those ‘waves’, or competing probabilities, interfere with each other, some constructively, some destructively. The clever trick is that a quantum algorithm has to be specifically designed to make this happen, to engineer it so the wrong answers cancel each other out. Then when you ‘observe’ the system, or ask it for the answer, all of those probabilities collapse to leave just the one that is correct. You open the box and force reality to choose whether Schrödinger’s cat is alive or dead. In a way, you are asking nature, you are asking reality itself what the answer is, and IT ‘KNOWS’! It is more complicated than that, and the engineering challenges are massive.
We are talking about a new kind of computer that can solve things in hours or days that all the supercomputers in the world would take decades, centuries, or even millennia to break down.
Isn’t that something?
So, for the world of science, quantum computers will be completely revolutionary. Think of pharmaceutical discovery, when you can model what the atoms in a human body will do without ever having to test a drug on people. Imagine what it will do for modelling complex financial markets, optimising portfolios, predicting market movements, or for our understanding of the universe, when we can model what an entire galaxy will do, or model the entire universe itself – the sky is not even the limit.
But it is not going to make your MacBook more powerful; you don’t need a quantum chip to do what modern computers already do really well; you need it for the very, very, insanely heavy lifting.
So why does FinTech care?
Well, an important use case is cryptography and its use in digital payments and transactions. Your signals between you and your bank, the point of sale terminals, or online shopping. It is all encrypted for security, with ciphers that – without the correct key – would take a supercomputer decades to crack. In a world with quantum computers, this is theoretically obsolete. A quantum CPU could crack the most difficult encryptions in the world in a matter of hours. How much is your Bitcoin holding worth when everyone can build their own decryption key? What if you could easily hack interbank transactions and add a few zeroes to your account balance?
And this is what governments, banks and institutions are scared of; this is the new arms race.
Since all banking and payments are based on trust, only cryptography designed to withstand post-quantum cryptography (PQC) can stand up. So the big organisations are spending billions on trying to solve this problem, because if they don’t, they are not secure and cannot be trusted. Governments and regulators here and abroad have reached a consensus that quantum computers are coming, and that financial infrastructure needs to have transitioned to post-quantum systems by 2035. So this is not science fiction; this is very much the real deal. In fact, adversaries are already ramping up, undertaking what are known as ‘Harvest now, decrypt later’ data attacks.
This is just the first application, but it is an absolutely key one, and arguably the only one that should matter to finance right now. We are potentially talking about the future stability and resilience of the entire global economy.
Are quantum computers the beginning, or the end?
So raise your hand up in front of your face. It is not a hand; it is trillions and trillions of atoms all aligned in a stable structure, all interacting with each other, and the outside world, and all of the electrons and protons are doing their mad things behind the scenes, being bombarded by light and heat, sharing quantised energies, credits and debits. The insane world of atoms and quantum mechanics doesn’t impact this perception too much, unless you’ve been at the absinthe.
But the bonkers world of quantum mechanics is potentially about to wreak havoc on our financial world, and now only the nerds can save us.
I suppose you could say that the financial world itself is in a state of superposition. Currently it is both alive and dead, like Schrödinger’s unfortunate cat.
Let’s manifest a future where it is alive and well.
Quantum mechanics may be insane, but it just is this way, and our only choice is to get over it, and quickly.
… And there they all are – The Solvay Conference, 1927
This is a picture of the greatest scientists involved in the birth of quantum mechanics at the 1927 Solvay Conference, referred to as the ‘most intelligent photograph ever taken’. You can clearly see Einstein, front and centre, but Bohr, Planck, Dirac, Pauli, de Broglie, Heisenberg, Compton, Lorentz, Schrödinger, etc, are all there. But spot the odd one out: front row centre-left is Marie Curie, the only woman. She stands out because she is the only person in the frame with two Nobel Prizes.
