One The Edge

Silver's book brings out the ranting nerd in me. It's the kind of work that compels me to engage deeply with its content. While I don't agree with everything, it provides plenty to contemplate.

The book examines people who think like gamblers (in the most positive sense of the word) – whether they're actual gamblers, venture capitalists, cryptocurrency enthusiasts, startup CEOs, or technologists building potentially world-altering AI.

Some key insights from the book: People would benefit from taking more calculated risks in their lives. Many avoid risk because they struggle to evaluate it properly. Is there a 1% edge with a 10x payoff? Or is it a one-in-ten-million chance of winning the lottery? Did a penny stock with a weak business plan grow by 10x? Did it collapse? Failing to distinguish the actual risks in these scenarios, and going by your gut or feelings, indicates carelessness rather than calculated risk-taking. Understanding the Kelly Criterion becomes essential here.

Regarding intuition, Silver suggests you need hundreds or thousands of relevant experiences before truly trusting your gut on a topic. A professional poker player's intuition differs dramatically from an amateur's, and they can cite numerous experiences that shaped their instincts.

Will AI become so advanced that it destroys us? While the book doesn't provide a definitive answer, it has convinced me otherwise. Though I agree AI will be transformative, the idea that AI will destroy us stems from an oversimplified model of the future – one that assumes powerful future AI might rebel, therefore we should fear it. Silver points out that such simplistic models of the future are almost always wrong.

Consider this historical parallel: Millennia ago, imagine a philosopher and metallurgist discussing their craft. The philosopher warns that metal will eventually create guns and bombs, suggesting they slow metallurgical progress. The counterargument? Metallurgy would improve lives in countless ways, including providing tools to manage those very weapons. Similarly, AI will enhance our lives while potentially offering solutions to manage destructive AI.

Silver's interview with SBF during the FTX bankruptcy provides fascinating reading, though my takeaway remains unchanged: there are still no compelling reasons to buy cryptocurrencies.

The book explores the deeper implications of thinking like a gambler. While investors might reject a startup with ten risks as too dangerous, a CEO views those same ten items as problems to solve. Leaders like Peter Thiel and Elon Musk approach innovation this way – seeing problems as challenges to overcome regardless of risk. The abhor index, insurance or diverse style investing. They could have survivorship bias, though they are billionaires and I am not, so who am I to argue.

Silver concludes by examining "gamified casino capitalism" – where future technology, including AI, primarily exists to capture our attention (think social media feeds) rather than genuinely improving our lives or economy. He advocates for a future emphasizing agency (We have meaningful choices in our lives), plurality (Many types of people live and work together), and reciprocity (We help each other).