isbn-13: 9780563537618
Hardback
Quite a lengthy book, ostensibly about risk-taking. Practically it cames across a book with three loosely related sections: the first about gambling, focused primarily on poker, but also delving into slot-machines and sports betting. The second part is about Sam Bankman-Fried, his cryptocurrency startup and the Effective Altruism movement. The third part is about rise of GenAI and the risk that AI will cause the end of humanity - p(doom)
The gambling section was the longest and most detailed - it might have been more interesting if I was a gambler. Not uninteresting, just not a compelling read for me personally.
Muslims are religiously forbidden to gamble
The section os Sam Bankman-Fried (SBF) was the weakest in my opinion. I thought that Number Go Up did a much better job of detailing the follies of SBF.
I am likewise ambivalent about final chapters on p(doom). They were interesting enough but I just feel that humanity is involved in many other activities with a higher p(doom).
Probably the most valuable chapter was entitled “Inspiration: Thirteen Habits of Highly Succesful Risk Takers”. These, according to Silver, are:
- Successful risk-takers are cool under pressure. They don’t try to be heroes, but they can execute when the chips are down.
- Successful risk-takers have courage. They’re insanely competitive and their attitude is: bring it on.
- Successful risk-takers have strategic empathy. They put themselve in their opponent’s shoes.
- Successful risk-takers are process oriented, not results oriented. They play the long game.
- Successful risk-takers take shots. They are explicitly aware of the risks they’re taking - and they’re comfortable with failure.
- Successful risktakers take a raise-or-fold attitude toward life. They abhor mediocrity and they know when to quit.
- Successful risk-takers are prepared. They make good intuitive decisions because they’re well trained-not because they “wing it.”
- Successful risk-takers have selectively high attention to detail. They understand that attention is a scarce resource and think carefully about how to allocate it.
- Successful risk-takers are adaptable. They are good generalists, taking advantage of new opportunities and responding to new threats.
- Successful risk-takers are good estimators. They are Bayesians, comfortable quantifying their intuitions and working with incomplete information.
- Successful risk-takers try to stand out, not fit in. They have independence of mind and purpose.
Quotes
Coates believes that much of what accounts for the “irrational exuberance” that makes for financial bubbles are these biological factors. Traders can experience euphoria. A bull market “releases cortisol, and in combination with dopamine, one of the most addictive drugs known to the human brain, it delivers a narcotic hit, a rush, a flow that convinces traders there is no other job in the world.” Chapter 2: Perception p91
Given the mathematical complexities of the game, you might expect poker to fall into System 2. And indeed, this is how computers approach poker. Despite constant improvements in processing power, solvers still take several minutes to come up with an approximate solution to a single poker hand. And yet, experienced human players, who have more factors to weigh than computers-not just the math but the psychology-often come to a decision in just a few seconds. So maybe the distinction between System 2 and System 1 is fuzzier than is commonly assumed. System 2 tasks can become System 1 tasks with enough practice. Chapter 2: Perception p103
…here’s one stereotype that bears out both in my own life and in empirical research: women, on average, are more likely to form bonds by talking, while men are more likely to form bonds by doing things together. Chapter 2: Perception p119
The average slot hold on the Las Vegas Strip is above 8 percent, however. And it’s even higher-around 11 percent-on penny slots, which are the most likely games for casual gamblers to encounter. Among the most common forms of government-sanctioned gambling, the only worse deals for players are horse racing and state lotteries, which are essentially a regressive tax on low and middle income citizens. Chapter 2: Perception p164
“One of the things that con artists take advantage of is the fact that the human brain hates uncertainty and always craves some sort of a story - cause and effect, something that makes sense. And whenever the world is changing, and a lot of things are happening at once, it’s hard for the average mind to deal with it,” Maria Konnikova told me. Crypto gurus like Mashinsky and Bankman-Fried offered the authority that people desperately wanted. Con artists “give you a nice little narrative to make sense” of the world, Konnikova said. “They take advantage of that moment to give you the certainty you crave.” Chapter 6: Illusion p313
It’s common in the River, a highly secular place, to insult someone’s movement by comparing it to a religion. (For instance, you might say that wokeness is a religion or that effective altruism is one.) Chapter 3: Illusion p327
Here is a famous conundrum posed by the economist Thomas Schelling: You are to meet somebody in New York City. You have not been instructed where to meet; you have no prior understanding with the person on where to meet; and you cannot communicate with each other. You are simply told that you will have to guess where to meet and that he is being told the same thing and that you will just have to try to make your guesses coincide. Chapter 3: Illusion p327
According to the French historian René Girard - Peter Thiel’s favorite philosopher - this tendency to mirror what other people covet, what he calls “mimetic desire,” is at the very heart of the human condition. And when you combine mimetic desire with modern-day meme culture - “mime” and “mimetic” have the same Greek root word, mīmēma, meaning that which is imitated - you’ll wind up with prices for NFTs that fluctuate wildly as collectors signal to one another what should be a focal point and what is out of style. Chapter 3: Illusion p331
To Altman, it was like embarking on the Manhattan Project. In one interview, he even paraphrased Robert Oppenheimer, with whom he shares a birthday: “Technology happens because it is possible.” At first, this sounds like the sort of motivational pabulum that might be stenciled on the wall of a Sunnyvale startup. But Oppenheimer, who spent the latter third of his life haunted by his role in fathering the atomic bomb, had implied something darker than Altman’s rephrasing. “It is a profound and necessary truth that the deep things in science are not found because they are useful; they are found because it was possible to find them,” Oppenheimer said. Long ago, humankind ate fruit from the tree of knowledge, then began to scale the branches of scientific and technological achievement. It’s those of us who go where the action is who move humanity forward-and who might bring about its demise. Although some might prefer to live ignorantly in an eternal paradise, we are irresistibly drawn toward the path of risk-and reward. Chapter Infinity: Termination p407
“The place [ChatGPT] struggles the most is in places where humans require really thorough and longform decomposition and reasoning,” Ryder said-for instance, solving a mathematical proof. “Type 2 thinking is very foreign to language models, because it’s not how they’re trained at all.” Conversely, “when it comes to Type 1 thinking, they just completely ace it.” Chapter Infinity: Termination p431
Put another way, it’s not that machines can do things more powerfully than humans that’s disconcerting. That’s been true since we began inventing machines; humanity is not threatened because a Chevy Bolt is faster than Usain Bolt. Rather, it’s that we’ve never invented a machine that worked so well but known so little about how it worked. Chapter Infinity: Termination p434
Publisher’s Description
From the New York Times bestselling author of The Signal and the Noise, the definitive guide to our era of risk—and the players raising the stakes
In the bestselling The Signal and the Noise, Nate Silver showed how forecasting would define the age of Big Data. Now, in this timely and riveting new book, Silver investigates “the River,” the community of like-minded people whose mastery of risk allows them to shape—and dominate—so much of modern life.
These professional risk-takers—poker players and hedge fund managers, crypto true believers and blue-chip art collectors—can teach us much about navigating the uncertainty of the twenty-first century. By immersing himself in the worlds of Doyle Brunson, Peter Thiel, Sam Bankman-Fried, Sam Altman, and many others, Silver offers insight into a range of issues that affect us all, from the frontiers of finance to the future of AI.
Most of us don’t have traits commonly found in the River: high tolerance for risk, appreciation of uncertainty, affinity for numbers—paired with an instinctive distrust of conventional wisdom and a competitive drive so intense it can border on irrational. For those in the River, complexity is baked in, and the work is how to navigate it. People in the River have increasing amounts of wealth and power in our society, and understanding their mindset—and the flaws in their thinking— is key to understanding what drives technology and the global economy today.
Taking us behind the scenes from casinos to venture capital firms, and from the FTX inner sanctum to meetings of the effective altruism movement, On the Edge is a deeply reported, all-access journey into a hidden world of power brokers and risk-takers.