“For someone who doesn’t watch many matches, Elihu Feustel makes a million dollars by winning bets simply by using algorithms”
Algorithms have revolutionized our world as we know it.
Today, a lot of things come to us a lot more easily than before. We have moved forward from the age of waiting to hear our favorite song on the FM radio and recording it on a cassette. Now, we visit YouTube to play your favorite song. It miraculously recommends all your favorite songs in the auto playlist.
When you visit IMDB’s website, it suggests the most relevant movies every time. When you Google something, you see the most relevant information on the first page. Have you ever wondered how each website knows exactly what to show you?
We have advanced so much that we can create a painting that one cannot distinguish from the works of an artist who died in 1669!
We are talking about the new 3D-printed Rembrandt painting. Developers created an algorithm to collect data from portraits painted by Rembrandt. This data was then used to create a new 3D-printed painting, which took over 500 hours of rendering.
What is an algorithm?
“A process or set of rules followed in calculations or other problem-solving operations, especially by a computer”. At the simplest level, it is a procedure for accomplishing a task or solving the problem.
How algorithms shape our world every day
Algorithms are everywhere—sports, computer gaming, finance etc. Let us take a look at a few examples.
Healthcare: Algorithms help in areas where healthcare had no effective treatment. From matching appropriate organs to mining data for matching symptoms. They complement some of the most proficient doctors across the globe.
In 2013, 4500 former footballers filed lawsuits against the NFL for concussion-related injuries. This issue came into the limelight when Hall of Famer, nine-time Pro Bowler, Mike Webster and a few other players were diagnosed with Chronic Traumatic Encephalopathy (CTE). The effects of repeated blows to the head cause CTE.
1.6 to 3.8 million sports-related concussions occur annually in the United States. To this day, there are no effective tests/scans to detect this disorder. Sanford Health studied common symptoms of the disorder and developed a concussion-evaluation algorithm, which detects the signs and symptoms of CTE. Now, because of timely treatment and precautions, the effects of concussions are prevented in more players. Until an effective test or scan is developed, algorithms are the answer to detecting CTE in time.
Sports: The sports industry today is the result of what has moved from intuition to statistics. It is a big game of algorithms from the Duckworth-Lewis method in cricket to the ranking players by using the Elo rating in the game of chess.
Algorithms also dominate the world of sports betting. So when you see weird numbers like 12/25 for ManU and 17/25 for Arsenal, you can rest assured that they are correct. The complex mathematical concept of the Poisson distribution equation is the foundation to the sports betting. This concept is used to generate numbers in sports betting.
Let’s take the example of Elihu Feustel, who makes almost a million dollars a day by betting on tennis. You would think that he would recognize Serena Williams if he passed by her on the street. However, this isn’t the case, he neither recognizes any of the famous tennis players nor does he know their playing styles etc. So, just how does he know who to bet on? He relies on a big data model that the live betting market uses. This algorithm collects data from existing (almost 2,60,000) matches. This data is then manipulated to allow users to determine which player/match they should bet on.
It seems like it’s all out of this world, right?
Gaming: It’s amazing how videos and computer games have evolved over the last 2 decades. We started with DOS games, Super Mario, Pac-Man, and went on to highly-advanced games like Need for Speed, Counter-Strike, and DotA.
The games are now getting more realistic, with life-like surroundings, smarter and scarier anti-heroes. There is an increased advancement in Augmented Reality (AR) and Virtual Reality (VR) technologies. We are now developing techniques to bring in games that require player involvement at an epidemic rate. This has led to the development of algorithms that are highly complex in nature to create complex games.
Finance: The financial world has not remained untouched by algorithms. Like the Rothschild
pigeon story of 1815, which helped Rothschild build a financial empire that’s going strong even today, the prediction in the field of finance needs to be quick and accurate. Black Box trading uses advanced and complex mathematical models to figure trading strategies for the most ideal returns. In stock markets, you have to make quick decisions. By 2011, algorithms governed 70% of the US stock market.
There is no doubt that irrespective of the field that you choose, algorithms have a strong influence on our lives and they are changing our world.
Soon there is a possibility that algorithms will take over most of the tasks done by human beings. This could lead to the creation of mundane jobs, which algorithms cannot do, such as stocking bottles, collecting blood samples, and other work that requires physical effort.
Until then, put your algorithm skills to test with these programming challenges.