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Alright, so, you want to see something adorable?
Well here you go: it’s the New York Stock Exchange.
Look at all these guys yelling their little hearts out.
This one’s so excited.
Oh, this one’s angry.
Aw, that one’s jumping up and down.
Now I know you might be thinking: what’s adorable about the New York Stock Exchange?
Isn’t it a bunch of greedy capitalist pigs who profit off the labor of the oppressed
and caused a massive global financial meltdown for which they were never punished?
Moving on, these people, the people on the floor of the stock exchange, aren’t really
the New York Stock Exchange, it turns out.
They’re basically just a fun little theatre act for CNBC, because this isn’t where the
real trading happens.
It really happens here, in Secaucus New Jersey, and it isn’t really a bunch of fun little
guys in suits jumping around.
It’s a bunch of massive servers sitting in data centers, processing millions of trades
a minute, and it is for this reason why a massive, super-expensive cable stretches between
New York and Chicago.
To understand this, though, you first have to understand something about information
and data: they don’t travel instantaneously.
You see, generally speaking, the internet operates through a series of interconnected
underground wires that snake across the entire world like some sort of giant spiderweb, except
instead of catching small bugs, it’s meant to catch hurtful YouTube comments.
Even when you’re on Wi-Fi, that Wi-Fi connection is coming through a router that’s connected
that bunch of underground wires.
Imagine you, in the US, want to send an email to someone in France.
So, you type out your email, and then, unless you’re using a satellite connection, which
you almost certainly aren’t because those suck and are very expensive and very unusual
and also did I mention they suck, that email literally travels through one of these physical
wires, across the Atlantic Ocean, and then through France, past baguette stores and twisty
mustache parlors and silent theaters showing movies about escargot falling in love, or
whatever it is they have in France, and then eventually to your friend’s computer.
If you have a good internet connection, that email travels through that cable at close
to the speed of light, which is really, really, really, really fast, but it’s not instant.
The speed of light is about one foot per nanosecond.
In other words, if I connect my computer to your computer with a one foot fiber optic
cable, I can send information to you in about one nanosecond.
If the cable is two feet, it’ll take about two nanoseconds.
If the cable is three feet, it’ll take forty-seven nanoseconds.
Wait no, sorry, I think my math is wrong.
It’ll take three nanoseconds.
The point is, the longer the cable, the longer it takes to send or receive information between
our computers.
So, now that we’ve talked information, let’s talk about money, and
to do that, unlike Hillary Clinton in 2016, we need to go to the Midwest.
In the United States, the market for futures exists mainly in Chicago—the New York City
of places that aren’t New York City.
A future, if you don’t know, is like a stock, except technically it’s not: it’s a promise
to get a stock in the future for a set price.
You don’t need to totally understand it.
For now, just know that futures are basically made up of stocks, in the same way that my
comments section is made up of people demanding videos about bricks.
But most stocks don’t sell in Chicago, they sell in New York.
Or, technically, they sell in data centers in Secaucus, New Jersey but people pretend
they sell in New York because… you know, New Jersey.
Gross.
So now imagine this: there’s a future in Chicago made up of stock in Half as Interesting
Inc, and that HAI stock is selling for $100 on the New York Stock Exchange, and so the
Chicago future market is valuing HAI stock at $100.
But then, because the world finally decides they want to know How Polar Bears Ruined Halloween
in Northern Canada, our price goes up to $100.01 on the New York Stock Exchange.
But here’s the crucial thing: it’ll take a few milliseconds for the computers running
the futures market in Chicago to find out that our stock price has gone up, because
they have to wait for the information to physically travel through cables, from the data centers
in New Jersey, to the data centers in Chicago.
But if I can find out that the stock price went up before the Chicago market can, I can
buy a future of that HAI stock in Chicago valued at $100, and then sell it for $100.01
once the price is updated, and I would, with full certainty, make one penny.
But in order for me to execute this risk-free trade, I need to be able to find out the price
in New York—or, again, technically New Jersey—faster than anyone else.
Now, New Jersey and Chicago, for a while, have been connected by high-speed internet
via fiber optic cable, but that fiber optic cable isn’t in a straight line, mainly because
it runs into the Allegheny Mountains in West Virginia and has to sort of snake between
them.
If I want a faster connection, I’d have to make the cable shorter, but what am I gonna
do, build a perfectly straight, 827 mile tunnel all the way from Chicago to New Jersey, boring
through mountains and under rivers, so I can lay a single, 1.5 inch thick piece of fiber
optic cable across the eastern United States?
Uh… yep.
I want my risk free pennies, so that’s exactly what I’m gonna do.
At least, it is if my name is Dan Spivey, founder of Spread Networks, which spent $300
million hiring a crew of two thousand to dig a hole from Chicago to New Jersey—in secret,
by the way, so competitors couldn’t scoop him.
Now, using this cable, instead of 16 milliseconds for information to go from Chicago to Jersey,
it takes just under 13.
That’s a difference of 3 milliseconds, or about $100 million per millisecond.
For context, it takes 400 milliseconds to blink your eyes.
This way, if they pay to use the cable, traders can turn a profit when the price of a future
is different in New York than it is Chicago.
Ok so, you want to know how else you can turn a profit… sort of?
Well, Nebula, that great streaming service where you can watch HAI videos early and ad-free,
and that will also be home to a 30-minute HAI special in a matter of weeks—it costs
$30 a year.
Great price, I know, but CuriosityStream, that great streaming service home to thousands
of documentaries by big names like Nick Offerman, Jane Goodall, and Steven Hawking, is $20 a
year, but, and here’s the kicker, by signing up for CuriosityStream at CuriosityStream.com/HAI,
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So that’s two fantastic streamings sites for just $20 a year—less than the cost of
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So, especially before the HAI Nebula Original releases in a few weeks, sign up at CuriosityStream.com/HAI.