A primate example of this is in the stock market, which went digital in the 90’s and has since exploded in terms of trades per day. In fact, one area that federal regulators point to as a source of the market instability we saw in 2008 is something called “high-frequency trading”. High-frequency trading is the process by which a computer algorithm, not a human trader, makes trades at a rate of hundreds per second. The idea is that these algorithms take advantage of subtle fluctuations in the stock market to make fractions of a penny profit on a trade. However, if you make thousands of trades like this every minute, at the end of the day those penny slivers can add up to real cash.
The problem is that these trades happen so fast, and so often, that human traders really have no time to react to the ups and downs in the market that high-frequency trading can cause, like the “flash crash” of 2010 where the stock market lost 600 points in a single hour. In fact, a recent report found that, recent research shows that this type of trading leads to more than 18,000 such crashes every minute, but because they stabilize so quickly, we hardly ever notice. To go back to our previous analogy, imagine an enormous robot at a digital marketplace with millions of arms constantly selling, buying, and trading at the same time and a handful of people trying to keep track of it all.
The internet security company Incapsula recently released a report on its blog showing that fully 51% of all activity on the internet is non-human. The report goes even further, however, showing that about 20% of non-human activity is search engines, while the other 31% is “bad bots”. In other words, about three fifths of the robots in our hypothetical world are malicious; intending to harm users and businesses. Here’s the breakdown on the bad bots, according to Incapsula Blog:
- 5 percent hacking tools
- 5 percent “scrapers,” software that posts the contents of your website to other websites, steals email addresses for spamming, or reverse engineers your website’s pricing and business models
- 2 percent comment spammers
- 19 percent other sorts of spies that are competitive analyzers, sifting your website for keyword and SEO (search engine optimization) data to help give them a competitive edge in climbing the search engine ladder