Nassim Taleb on Bitcoin: “Bitcoin is the beginning of something great”

In Nassim’s recent Ask Me Anything (AMA) on Reddit he was asked about Bitcoin. His response:

Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.

But I am not familiar with the specific product to assert whether it is the best potential setup.
And we need a long time to establish confidence. I only talk from skin-in-the-game.
If I had money in bitcoin, I would have reported it. But I don’t yet.
I am waiting to understand it better, not with my brain, but with my experience…

http: // www. reddit. com/ r/ IAmA/ comments/1a…

Nassim Taleb Ask Me Anything (AMA) on

reddit-logoNassim has just completed a AMA (Ask Me Anything) on

I am interested in decision making under opacity (when we don’t know what’s going on) without being harmed by mistakes, disorder, and volatility, and be potentially helped by them. Antifragility at the gobal level is achieved through the skin in the game rule: people should be harmed by their mistakes if these harm others. At the personal (local) level… let’s discuss. Home Page (Verified on twitter @nntaleb)

http:// www. reddit. com/ r/ IAmA/ comments/ 1aoi0s/ iam_ nassim_ taleb_ author_ of_ antifragile_ ama/? sort= confidence

Comment Correspondance: ‘Antifragility’ as a mathematical idea

Nassim Taleb’s response to Michael Shermer’s review of Antifragile in the science journal Nature:

In his review of my book Antifragile, Michael Shermer mischaracterizes the concept of ‘antifragility’ (Nature491, 523; 2012).

‘Fragility’ can be defined as an accelerating sensitivity to a harmful stressor: this response plots as a concave curve and mathematically culminates in more harm than benefit from random events. ‘Antifragility’ is the opposite, producing a convex response that leads to more benefit than harm.

We do not need to know the history and statistics of an item to measure its fragility or antifragility, or to be able to predict rare and random (‘black swan’) events. All we need is to be able to assess whether the item is accelerating towards harm or benefit. The relation of fragility, convexity and sensitivity to disorder is thus mathematical (N.N. Taleb and R. Douady Quant. Finance, in the press) and not derived from empirical data,
as Shermer implies.

Shermer’s suggestion that I should offer “a checklist of things companies or countries can do to prepare for black-swan events” overlooks 50 or so such heuristics based on the identification of convex responses.

Nassim N. Taleb Polytechnic
Institute of New York University,
New York, USA.

PDF Link: http:// www. fooled by randomness. com/ nature-definition. pdf
Link on http:// www. nature. com/ nature/ journal/ v494/ n7438/ full/ 494430e. html
Michael Shermer’s Review: http:// www. nature. com/ nature/ journal/ v491/ n7425/ full/ 491523a.html

NNT Textbook: Probability, Risk and(Anti)fragility

From Nassim Taleb’s Facebook Page …

Friends, the new project: a linear TEXTBOOK on risk and (anti)fragility. I am putting all the relevant technical papers in linear textbook form. To bust current econometrics and similar frauds, and suggest replacement I need to put it in a complete technical textbook-style format targeted at the new generation of students in statistics (econometrics), risk, and social science.

The document will be freely available electronically. I think it will come out at the same time as the U.K. AF paperback in June.
Will post chapters here.

http://www. fooled by randomness. com/ textbook. pdf

Nassim Taleb Book Review: Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life

 Here is what I wrote in my endorsement: Emanuel Derman has written my kind of a book, an elegant combination of memoir, confession, and essay on ethics, philosophy of science and professional practice. He convincingly establishes the difference between model and theory and shows why attempts to model financial markets can never be genuinely scientific. It vindicates those of us who hold that financial modeling is neither practical nor scientific. Exceedingly readable.

From the remarks here, people seem to be blaming Derman for not having written the type of books they usually read… They are blaming him for being original! This is very philistinic. This book is a personal essay; if you don’t like it, don’t read it, there is no need to blame the author for not delivering your regular science reporting. Why don’t you go blame Montaigne for discussing his personal habits in the middle of a meditation on war inspired by Plutarch?

Customer Review: Models.Behaving.Badly.: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life (Paperback)


From Nassim Taleb’s Facebook Page:

Friends, comments are invited for this draft on a philosophy paper w/ Constantine Sandis, “ETHICS AND ASYMMETRY: SKIN IN THE GAME AS A REQUIRED HEURISTIC FOR ACTING UNDER UNCERTAINTY

C. Sandis & N.N. Taleb
Abstract: We propose a global and mandatory heuristic that anyone involved in an action that can possibly generate harm for others, even probabilistically, should be required to be exposed to some damage, regardless of context. We link the rule to various philosophical approaches to ethics and moral luck.

http://www. fooled by Sandis Taleb. pdf

Link to Paper: http://www. fooled by randomness. com/ SandisTaleb.pdf
Link to Facebook Discussion: https://www. facebook. com/ permalink.php? story_fbid= 515541175165176&id=13012333374

Nassim Taleb opinion piece on

We’re more fooled by noise than ever before, and it’s because of a nasty phenomenon called “big data.” With big data, researchers have brought cherry-picking to an industrial level.

Modernity provides too many variables, but too little data per variable. So the spurious relationships grow much, much faster than real information.

In other words: Big data may mean more information, but it also means more false information.

Link: Beware the Big Errors of ‘Big Data’
http:// www. wired. com/ opinion/ 2013/ 02/ big- data- means- big-errors- people/

Nassim Taleb: More Skin in the Game in 2013


“Those who have the upside are not necessarily those who incur the downside. For example, bankers and corporate managers get bonuses for “performance,” but not reverse bonuses for negative performance, and they have an incentive to bury risks in the tails of the distribution –& in other words, to delay blowups.

The ancients were fully aware of this incentive to hide risks,& and implemented very simple but potent heuristics. About 3,800 years ago, the Code of Hammurabi specified that if a house collapses and causes the death of its owner, the house’s builder shall be put to death.”


Nassim Taleb on

Foreign Policy has an article on their website with reflections from Nassim touching on Fragility/Antifragility, the stability of countries, city-states and decentralizing government, Lebanon, the European Union, and US deficits, titled Epiphanies from Nassim Nicholas Taleb.


Nassim Nicholas Taleb has made a career of going against the grain, and he has been successful enough that the title of his book The Black Swan is a catchphrase for global unpredictability far beyond its Wall Street origins. Born in Lebanon, he weathered the first few years of the civil war in the late 1970s reading philosophy and mathematics — from Plato to Poincaré — in his family’s basement. War taught him how quickly fortunes can change, an insight he soon applied to derivatives markets. For Taleb, investing is about “hyper conservatism,” which includes making lots of tiny bets on wildly unlikely events — like a currency crisis or the banking collapse, on which he made tens of millions of dollars. His newest project is helping governments get smarter about risks, and his fervent anti-euro message has helped win him the ear of British Prime Minister David Cameron.

Link: http: // www. foreign policy. com/ articles/ 2012/ 10/ 08/ epiphanies_ from_ nassim_ nicholas_ taleb

Taleb vs Davies

Just posted on Nassim’s Facebook Wall:

Nassim Nicholas Taleb
Looks like a preview of what to expect from the economics and econophaster establishment. Davies is the gentleman there; others have not even given a simple thougth to model error and which domains are affected by it. But asking people to explain insults can lead to pleasant surprises.

When Taleb met Davies:

This morning, Nassim Taleb returned to Twitter, posting one of the technical appendices to his new book. And immediately he got into a wonderfully wonky twitterfight/conversation with Daniel Davies.

I don’t pretend to understand all the subtleties of the conversation between the two, but, for Tom Foster, here’s an attempt. Davies has promised a Crooked Timber post on other parts of the appendix; I’m really looking forward to that.

Read the rest here…