Today almost all aspects of our lives are controlled by an algorithm of some description.
From the Google searches delivering us results based on our preferences and location, to the Facebook timeline that filters our feed based on what it thinks we want to see. Do you wonder why that friend from high school you never talk to doesn’t show up in your feed anymore? It’s because Facebook figured out that you don’t care about their status updates very much.
The danger of any machine automation based on an algorithm is that the algorithm itself has been engineered, coded, and conceptualised by a human. Not that I am saying humans are all bad – just prone to the occasional mistake. Human errors are the basis of all algorithm errors.
Here is a very brief look at how algorithms are influencing our day to day lives.
Twitter is fantastic especially for sentiment analysis but what if that sentiment was artificially generated? Hacking attacks on the Twitter accounts of major news organisations could be used to send false Tweets about catastrophic incidents.
Bill Mew’s explanation of sentiment data is as follows:
“Social Sentiment is the view, whether positive or negative, of a brand or keyword as it is used across social media platforms such as Facebook and Twitter.”
So what? You may ask.
Today many of the trading and banking platforms are fully automated based on algorithms, including social data. This type of trading via algorithm is commonly called ‘High Frequency Trading’ which invokes trading decisions made by computers in milliseconds.