One day, the stock market could eat the power grid

February 20, 2012

High-frequency trading shops are basically in the business of taking electricity as an input and producing money as an output; then they use some of their profits to buy more hardware in order to take in more electricity, so that they can make more money, and on it goes. [...]

HFT's appetite for CPU cycles and electrical power is unlimited because it's an arms race. In other words, to win at HFT, you have to own the fastest, lowest-latency machines in the datacenter; so every time a competitor upgrades and becomes faster than you, you're forced to upgrade so that you can get back on top. [...]

In a post-Fukushima, post-Deepwater Horizon world of 7 billion people, where nations are struggling to meet the challenge of renewable energy, is this societally pointless one-upsmanship really what we want to spend our electricity on?

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