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EPISTEMOLOGY IRL (maybe some $BTC stuff)
Epistemology to me is a quite practical field. It's about what we can know and to which degree of certainty.
Diff methods to obtain knowledge have diff standards. Usually the more restrictive the method, the more reliable the results.
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Epistemology to me is a quite practical field. It's about what we can know and to which degree of certainty.
Diff methods to obtain knowledge have diff standards. Usually the more restrictive the method, the more reliable the results.
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Basic example: hard science (physics, engineering etc.) has higher standards of verifiability than history, so if historical records seem to contradict our current (scientific) understanding of the physical world, we tend to listen to science.
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Science is a very useful tool, but it's not universal. We're constantly faced w/ decisions for which there isn't enough scientific data available, so we have to use other tools instead. This is what's happening with #COVID19
https://twitter.com/butera_simone/status/1247824879879163904
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https://twitter.com/butera_simone/status/1247824879879163904
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Screaming "LISTEN TO THE EXPERTS" is not a solution when said experts can't give a full answer on the subject.
Scientists are not supernatural creatures, they're normal humans who studied how to obtain & process data on a specific field.
The scope of science is very limited.
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Scientists are not supernatural creatures, they're normal humans who studied how to obtain & process data on a specific field.
The scope of science is very limited.
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We have to fill the blanks ourselves. This is why there's not a single person on the planet that relies solely on science. Even the most staunch follower of scientism uses heuristics to decide who to trust in a conversation. We all use a mix of epistemological tools.
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The better a person is at epistemology, the more he/she can choose the right tool to face a certain problem, and be able to use it correctly.
Epistemologically naive people can (at best) be good on one limited subject (many scientists have this kind of limitation).
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Epistemologically naive people can (at best) be good on one limited subject (many scientists have this kind of limitation).
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Diff jobs are based on diff epistemological tools.
Let's call their reliability ES (Epistemological Strength) for convenience.
Some examples of jobs for diff ES might be:
High ES - mathematician
Medium-high ES - physic
Medium ES - nurse
Medium-low ES - farmer
Low ES - trader
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Let's call their reliability ES (Epistemological Strength) for convenience.
Some examples of jobs for diff ES might be:
High ES - mathematician
Medium-high ES - physic
Medium ES - nurse
Medium-low ES - farmer
Low ES - trader
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People who are not good at dealing with uncertainty may prefer an high ES job.
Being a trader specifically requires the ability to cope with uncertainty, but what's interesting is that finance is an epistemological microverse of its own.
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Being a trader specifically requires the ability to cope with uncertainty, but what's interesting is that finance is an epistemological microverse of its own.
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That's it for now, I'll carry on if the first tweet in the thread gets 10+ retweets :p
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EPISTEMOLOGY IRL (maybe some $BTC stuff) pt. 2
Yesterday I asked for 10 RTs to the first tweet of the thread, I got them, so let's continue from where we left, aka epistemology & finance.
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Yesterday I asked for 10 RTs to the first tweet of the thread, I got them, so let's continue from where we left, aka epistemology & finance.
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Investing is betting on the markets, but before that, it's betting on one's own ability to *know* what to invest on (or on said ability of one's fund manager).
Investing is inherently an epistemological endeavor.
Markets are networks that process information and...
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Investing is inherently an epistemological endeavor.
Markets are networks that process information and...
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...while not perfect, they far exceed the potential of central planners in that regard.
So if investing is all abt knowledge, the default approach would be the Buffettian one: Fundamental Analysis, only investing on things that you understand. Go where you have higher ES.
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So if investing is all abt knowledge, the default approach would be the Buffettian one: Fundamental Analysis, only investing on things that you understand. Go where you have higher ES.
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This is one of the reasons that lead me to dismiss Technical Analysis as quackery (well, this and the fact that it kinda is quackery).
But during a conversation with @afilini the other day, he pointed out to the self-fulfilling-prophecy properties of TA.
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But during a conversation with @afilini the other day, he pointed out to the self-fulfilling-prophecy properties of TA.
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Since most traders use it, it's like a loose script followed by a significant portion of market actors. This is where it can get some predictive power.
Is this in any way comparable to actually understanding the assets? No, but as I realized, that's not the point.
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Is this in any way comparable to actually understanding the assets? No, but as I realized, that's not the point.
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When trading a wide variety of assets, you can't rely on FA, you're playing in a lower ES league. You have to make it with what's available: software, heuristics, experience, instinct, TA...the rules are different. Traders are the footsoldiers of the market war of knowledge.
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So, how does #Bitcoin 
come into play in all of this?
I think Bitcoin is a higher-ES-investment compared to other assets.
The complex interplay of IT, cryptography, game theory & economics that makes it work, also makes it more predictable than fiat, bonds, stocks...
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come into play in all of this?I think Bitcoin is a higher-ES-investment compared to other assets.
The complex interplay of IT, cryptography, game theory & economics that makes it work, also makes it more predictable than fiat, bonds, stocks...
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...and other types of assets that are more reliant on human behavior (and/or based on more naive models of human behavior & incentives).
When I say "predictable" I'm not talking about volatility. I'm talking about "deep safety":
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When I say "predictable" I'm not talking about volatility. I'm talking about "deep safety":
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https://twitter.com/NickSzabo4/status/1162743096821469184
If you're thinking in terms of volatility, you're addressing Bitcoin as an epistemological footsoldier (tweet # 15), stuck to the superficial level of the market war of knowledge.
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If you're thinking in terms of volatility, you're addressing Bitcoin as an epistemological footsoldier (tweet # 15), stuck to the superficial level of the market war of knowledge.
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The concept of deep safety is to me the gist of the Bitcoin question: it's a value proposition engraved in reality to a degree that no company stock, no government bond can replicate.
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And I think it's in part the cause of its volatility: whales can play the dump game with the Bitcoin price because the system is stronger than price. The toy you can toss around the most, is the one that's most difficult to break.
Thanks for reading.
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Thanks for reading.
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