# The Universe is a Quantum Algorithm: Evidence Emerges from the Stock Market

*For more evidence showing that the Universe is made of quantum “computer codes”, read my article titled Theoretical Physicist Finds “Computer Code” in the Fabric of Space. ~ PL Chang*

By Ovidiu Racorean, author of QuantumFinancialMarkets.WordPress.com

*Recently, quantum gates and quantum circuits have been found when portfolios of stocks were simulated in quantum computation processes, pointing out to the existence of a bizarre quantum code beneath the stock market transactions. The quantum code of the stock market might prove to have a more profound signification if is related to the recent finding of quantum codes at the deepest levels of our reality, such as quantum mechanics of black holes and the space-time of the universe. Could this mysterious stock market quantum code be a tiny fragment of a quantum code that our universe uses to create the physical reality?*

John Preskill’s talk “Is spacetime a quantum error-correcting code?” held at the Center for Quantum Information and Control, University of New Mexico, and previously at Kavli Institute for Theoretical physics , may represent a turning point in physical research related to questioning the existence and evolution of our Universe. The essence of this talk may change forever our understanding of the Universe, shifting the perspective of physical research from masses and energies to codes of information theory.

**Is Spacetime a Quantum Error-Correcting Code? | John Preskill**

John Preskill, professor at California Institute of Technology, is well known mostly for his remarkable developments of quantum computational models, more specifically topological quantum computing. Preskill’s lectures inspire a whole generation of brilliant physicists working on quantum computation. This experience in quantum computing may point out Dr.Preskill to knock at the Universe gates with the unique perspective of a quantum code reality.

#### Is spacetime a Quantum Error-Correcting Code?

The information theory facet that physical research is embraced in the late years when it comes to understand the laws of the Universe may seem bizarre, but it ends to makes perfect sense listening the reasonings of Dr. Preskill over the existence of spacetime as a quantum code.

The idea of expressing spacetime like a quantum code is so amazing that deserves at least a brief non-technical presentation. It relies on two relatively recent ideas in physics, the holographic principle and quantum error-correction. The holographic principle asserts that all the information contained in a region of space is encoded on the boundary of the region. Quantum error correction is the foundation of building large-scale quantum computers that can be operated to solve hard problems. Based on these two ideas, Fernando Pastawski, Beni Yoshida, Daniel Harlow and John Preskill have constructed quantum codes that realize the holographic principle.

John Preskill and Co built this incredible image of spacetime on the previous work of Almeheiri and Co and Polchinski and Co. The late researchers all came to the conclusion of a spacetime expressed as a quantum error-correcting code, still they do not formulate it explicitly.

#### The Holographic Universe

In a post on his blog, discussing Polchinski’s work, the string physicist Lubos Motl, former assistant professor at Harvard University, concluded that” we are living in a holographic universe that uses quantum computer code to create the physical reality”. He names it “Holographic code”.

The Holographic Universe theory originated to Leonard Susskind, professor of theoretical physics at Stanford and one of the co-founders of holographic principle alongside Gerard’t Hoft. Susskind proposed that the universe behaves as a hologram, that all the information that constitutes our three-dimensional world is actually encoded on the two-dimensional universe boundaries. Apparently, the universe is a virtual holographic reality.

The Bad Boy of Physics, as American Scientists named him, Dr. Susskind extended the idea that the information a black hole contains is lying on its surface event horizon, to the whole universe.

The black holes may have also something to do with quantum error-correcting codes?

#### Black Holes and the Quantum Error-Correcting Code

In a historical meeting in Stockholm this year, to the “Hawking Radiation Conference”, Stephen Hawking enrolled himself once again in the so called “Black Holes war”. He argued that the boundaries of the black hole hold the information about outside objects trapped inside, though it will be altered and useless when radiate outside the black hole horizon. This presentation caused uproar among the researchers.

Hawking’s new idea is that the information doesn’t make it inside the black hole at all. Instead, it’s permanently encoded in a 2D hologram at the surface of the black hole’s event horizon. “The information is not stored in the interior of the black hole as one might expect, but in its boundary — the event horizon,” Hawking said.

It should be noticed here the translation of the pole of interest from radiations and particles to information, hologram and information theory.

Verlinde brothers took another approach that eventually associate black hole to quantum error-correcting codes.

Erik Verlinde, University of Amsterdam and Herman Verlinde at Princeton Center for Theoretical science, use the parallel between black hole radiation and loss of coherence of a quantum computer. This analogy seems fruitful in applying technics of quantum information theory such as quantum error-correcting code to organize the internal state of the black hole.

All these recent theoretical discoveries are certainly revealed that information theory is more important in describing physical reality than had been previously appreciated. Appearance of quantum codes to explain such disparate phenomena of nature may converge to the idea that physical laws of our reality are encoded in the “lines” of a Universe quantum code.

May the entire Universe be a giant quantum computer that creates our reality using quantum algorithms?

#### Quantum Computational Universe

Seth Lloyd is a professor of mechanical engineering at MIT. He is a distinguished researcher in the field of quantum computation, co-authored some articles with Preskill.

For the present exposition, though, another aspect of his remarkable research career is relevant. Despite his incredibly laborious work in quantum computing, the large public mostly remarked him for launching the idea of Computational Universe.

In his controversial book, Programming the Universe, prof. Lloyd emphasized the idea that the Universe is a “giant quantum computer made up of connected quantum gates”, as it was characterized in the American Scientist [8] review of the book. Connected quantum gates are basically describing quantum circuits and quantum algorithms.

In the same register it should be added here the remarks of Dr. James Gates, professor at the University of Maryland, at a show moderated by the astrophysicist Neil deGrasse Tyson. Referring to its founding’s Dr. Gates argued that, if the reality is a code than researchers should “try to detect the presence of codes in the laws that describe physics”. This is precisely the outcomes physics came out with in the recent years – quantum codes in the description of our universe.

More intriguing is, perhaps, the presence of quantum codes in the representation of a reality totally unrelated to physics, financial markets. A recent paper [Quantum Gates and Quantum Circuits of Stock Portfolio- http://arxiv.org/abs/1507.02310] in applying quantum computation to model the stock price movements surprisingly suggests that the stock market itself is a complex quantum algorithm.

#### Quantum Computation and Financial Markets

To take an advantage over the competition, financial institutions must adopt new scientific ideas and advanced technologies very early in their development. Is the case of quantum computers.

Promised to be more powerful and faster than their classical counterparts, quantum computers captured the total attention of financial players lately.

A visionary Canadian venture, D-Wave Systems, came out in the market with the first quantum computer, a product that immediately caught the attention of some important buyers, Google, NASA, and Lockheed Martin.

Using the quantum adiabatic theorem at the core of their revolutionary processor, D-Wave Systems created this particular quantum computer that may be a major breakthrough for fields that encounters complex optimization problems to be solved, like advance search for cancer drugs or finance.

Finance may benefit from harnessing the power of adiabatic quantum computation to solve optimization of portfolios or logistic problems like the well-known, salesman problem.

Briefly, financial problems can be solved, in an adiabatic quantum computation, by initializing a system of particles into the ground state of a simple Hamiltonian, and then adiabatically evolving the Hamiltonian to one whose ground state encodes the solution to the problem.

The amazing thing here is that **changing the quantum states of tiny particles can solve exclusively human related problems, like selecting an optimum portfolio of assets in the financial markets.**

There is another angle to view the applicability of quantum computation to financial markets, simulation of price movements of stocks in the portfolios.

#### The Mysterious Quantum Code of the Stock Market

One of the conventional models of quantum computers, working with quantum gates and quantum circuits, that is most reliable to be built in the near future is the topological quantum computer. The genuinely bizarre way topological quantum computer realize quantum computation arises to the attention of the scientific community in 1997, once A. Kitaev thought it may solve the error correction problem of quantum computers by means of topology.

Topology is concerned with the properties of geometric configurations that are unaltered by deformation. In the same manner the topological trajectories of theoretical quasi-particles formed braids are protecting the information against errors caused by local interactions with the environment. The quasi-particles are called anyons and are supposed to be found in fractional quantum Hall effect.

In topological quantum computation, quantum gates are simply implemented by braiding the quasi-particles trajectories in a predefined sequence.

What these quasi-particles and braided trajectories had to do with financial markets?

Here is the catch. The time series of prices of stocks in the portfolios are exhibiting the same braiding behavior, just like the collection of quasi-particles. From here to the idea of simulating the prices of stock movements in a portfolio on a quantum simulation is just a small step to take.

The astonishing thing is that, when simulating in topological quantum computation environment the time series of stock prices realize, in their braiding movement, elementary quantum gates. The quantum gates that prices of stocks in a portfolio are realized can be chained in quantum circuits.

It is absolutely fascinating to see how stocks of reputable companies like McDonalds or Walt Disney Company are literally realizing quantum gates in their New York Stock Exchange daily evolution.

Selecting a stock portfolio, from the shares of companies listed on *Dow Jones Industrial Average* market index, composed of **McDonald’s Corp. (MCD)**, **The Walt Disney Company (DIS)**, **American Express Company (AXP)**, and **United Health Group Incorporated (UNH)**,an astonishing chain of quantum gates is recovered. Hadamard gate, Pauli gates and S-phase gate are all acting concerted in 1-qubit quantum circuit.

More complex quantum code structures arise considering increasing the number of stocks in the portfolio. 2-qubit quantum circuits are realized by adding **Nike Inc. (NKE)** and **The Home Depot, Inc. (HD)** to the initial portfolio of stocks.

**Fragment of the Stock Market Quantum Algorithm realized by quantum computing simulation of a stock portfolio composed of: The Walt Disney Company (DIS), Nike Inc. (NKE), McDonald’s Corp. (MCD), American Express Company (AXP), UnitedHealth Group Incorporated (UNH), The Home Depot, Inc. (HD)**

Extended the process to the whole *Dow Jones Industrial Average* market index a mysterious quantum code of the stock market is revealed.

Here is the link to the quantum computational universe. This strange quantum code laying beneath the stock market transactions may be a small fragment of the universal code the entire Universe acts according with. This result may point out the shocking conclusion that New York Stock Exchange is perhaps a **quantum computational virtual reality**.

It may look hazardous to jump to this conclusion at so early stage of the research related to existence of quantum codes on the stock market. It also looks hilarious to link the stock market to black hole evaporation or holographic universe, but at this point, it seems to be the only logical explanation.

At the end of the day, a deeper and more troubling question may arise out of this story – **Could the trajectories of particles express not only the quantum code beneath the stock market transactions but also the hidden code of our entire physical reality?**

*This article was published with permission from the author Ovidiu Racorean. To read more articles written by Ovidiu Racorean, visit QuantumFinancialMarkets.WordPress.com.*

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