Quantum computing is the new great game, the bleeding edge of technology that promises to change everything. It uses principles of quantum physics, rather than chemistry, and was first suggested by legendary theoretical physicist Richard Feynman in the 1980s.
Quantum computing promises instant answers to complex problems, like modeling chemical reactions, that defy solution in conventional machines. Analysts think it could be a $15-billion market in 10 years.
That’s big enough, and far enough away, with enough application to draw the interest of the government and big tech players such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC) and IBM (NYSE:IBM).
But it’s not yet big enough, or real enough, to impact much of your portfolio. Quantum computing remains at the start of its hype cycle.
Startup Mode
Some of the most important work in quantum hardware is being done by a Canadian startup called D-Wave Systems which wants to raise hundreds of millions of dollars to get its technology into clouds.
D-Wave’s computers are collections of magnets, kept at an ultra-low temperature, that can flip orientation in relation to changing magnetic fields.
Changes in energy are measured so that a bit, called a Qubit, isn’t a 1 or 0 but more like a point on a sphere, which is more complex and holds more information. Researchers are testing quantum computing on simulations of chemical reactions, getting answers more quickly than with conventional machines.
While IBM and Intel are focusing on quantum hardware, with IBM offering access to what it calls its “Q Experience,” Google and Microsoft are focusing on software, with competing open-source frameworks. Microsoft calls its language “Q#,” and Google calls its toolkit “Cirq.”
Government money is coming because quantum could break the strongest encryption by modeling encryption algorithms and solving them quickly. This has implications for every other technology dependent on encryption, including blockchain and bitcoin.
Ambitious politicians want to throw military dollars at quantum projects, for the same reasons that military dollars backed the first computers during World War II, semiconductors during the 1960s, and the internet in the 1970s.
They’re worried about hackers breaking public key infrastructure, so naturally, blockchain advocates are saying that their decentralized access to keys, in their infrastructure, is the best protection. It is, until hackers find a cache of keys and go to work on them.
Funding, however, is not going to be a problem for quantum computing researchers, as it was in earlier decades. Government funding usually goes to science that can’t bring in enough private dollars, and that’s not a problem for quantum computing.
When Will Quantum Computing Come to the Market?
Quantum computing is coming to the market but not right away.
You’re going to read a lot about it in the next two years, but for now, it’s a money sink for big tech, a research hole that corporate managers are throwing money into, and public relations managers are pulling press releases out of.
That is going to change in the next decade. Quantum computing is going to do for complex models, whether molecular, galactic and financial, what cloud did early in this decade for corporate databases, and what it is now starting to do for voice-based artificial intelligence.
There’s no way to tell, right now, who is going to win the quantum computing race, but it’s a game the biggest tech companies are playing avidly, and the biggest research centers are building labs around. If you’re under 40, it’s going to rock your financial world.
Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance, The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in MSFT.
