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#BitcoinRegret of #BitcoinAt10 multimedia series by @coindesk

February 1st, 2019|Bitcoin, History, Quote|

Black Swan Theory

The black swan theory is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying which presumed black swans did not exist, but the saying was rewritten after black swans were discovered in the wild.

The theory was developed by Nassim Nicholas Taleb to explain:

  1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
  2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
  3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.

Taleb’s “black swan theory” refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.

https://en.wikipedia.org/wiki/Black_swan_theory

The problem of induction [also once called the Black Swan Problem] is the philosophical question of whether inductive reasoning leads to knowledge understood in the classic philosophical sense,[1]since it focuses on the alleged lack of justification for either:

  1. Generalizing about the properties of a class of objects based on some number of observations of particular instances of that class (for example, the inference that “all swans we have seen are white, and, therefore, all swans are white”, before the discovery of black swans)
  2. Presupposing that a sequence of events in the future will occur as it always has in the past (for example, that the laws of physics will hold as they have always been observed to hold). Hume called this the principle of uniformity of nature.

https://en.wikipedia.org/wiki/Problem_of_induction

June 21st, 2015|Bitcoin|

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