An Intangible Community

The fastest data cable under the Atlantic, Project Kelvin has the power to send a multiple of the entirety of Hansard political records from the UK to the US, every second. That is a great example of the raw power of the modern network as much as it offers a clear cure for insomnia through data overload!

In the modern era, the power of networks is much trumpeted but at the same time, barely considered. Raw data throbs through cable and thus we can do so many things with a cellphone that nowadays we are sometimes even disrupted checking email / sifting through apps when the mobile device actually rings with a voice call! …The power in mobile telephony is how we can meld voice interaction with data usage.

Markets have enjoyed the most incredible leap forward since we began the digital process which I discussed in “Capital Market Revolution!” in 1999. (Older readers will recall that “CMR!” was published in that novel format involving multiple sheaves of paper bound together, in the pre-Kindle era). Having written that book, predicting our interlinked and interdependent financial future, clearly networks fascinate me. Therefore, I remain as passionate a digital devotee as ever. Then again I am also minded of how many issues have been allowed to fester. Are all exchange regulations really oriented to delivering the best approach to digital markets? I am not entirely convinced given how somebody else’s error can often create a moment of giddy HFT trading throughput… Yet the entire market is left simultaneously with a hangover and headache thanks to low latency delivery when counterparties are allowed to cry “oops!” and have their trades declared null and void. Old rules are often the best precisely because they have stood the test of time. “My word is my bond” (‘meum dictum est meum pactum’), the London Stock Exchange motto shines through in this regard – just apply the “bond” to “keystrokes” and surely market errors could be significantly reduced?

One problem solved, a few zillion to go, I won’t manage it in a single column but I have confidence in the power of the network peer group to work on these advances! Of course this reminds us that a data centre is a place where wisdom can be found but not necessarily processed, without human interaction. The data centre is merely a repository of binary ultimately delivered via multifaceted coding languages – it still requires that certain je ne sais quoi of humanity to meld together to seal the deal and deliver better innovation!

Of course Artificial Intelligence is growing but networks are still best leveraged by mankind. Without humans, networks can process incredible data streams but overall they don’t really add enormous value. It’s the human interaction which makes the difference. That in and of itself, ought to lead us to appreciate the value of social interaction all the more. In this we have the separation between the network and that certain bond which creates a community. Communities are therefore networks while networks are not necessarily communities. Which brings me to the crux of this article (beside clearly helping rectify exchange rule oversights from the analogue to the digital!).

A world with only networks would be a dull one in terms of social interaction – commoditised but hardly cooperative. Therefore we need communities to make life better as it allows humans social interaction from which we can profit (intellectually, socially, and of course, fiscally). At the same time, valuing a network can often be tricky – they are an intangible commodity, to borrow the name I chose for the SFOA 25th anniversary tome. The Burgenstock meetings have been an Intangible Commodity for many years. However, we need to clearly recognise that in recent times we have seen a decline in the other key ingredient: community. A certain neglect crept into the Intangible Community of Burgenstock, despite having created a rather giddy peer group in its heyday. Now, hopefully the peer group can be rebuilt for a digital age while maintaining the core vestiges of interaction which have been so useful in the developing history of the derivatives’ world. Here’s to a renewed focus in SFOA and to a great meeting of minds in a delightful venue with lots of data to help the community expand its knowledge base both inside the mind and data centre alike… The Intangible Commodity with its Intangible Community drawn from all around the world to interface about the future of markets.

Patrick L Young (Patrick@DerivativesVision.com) is CEO of Crowdfunding platform HanzaTrade & an active entrepreneur/investor as well as the Publisher of the Market infrastructure daily “Exchange Invest.” He was a Member of the SFOA board from 2002-2007 and edited / published the association 25th Anniversary Book “An Intangible Commodity.”