Against the Gods Book Review

As all crypto buffs know, there is an immense amount of financial risk involved in our day to day actions. Especially when altcoins are involved, there is always the fear that there will be some Black Swan event leaving our portfolio absolutely shattered. How can we avoid this? Well, it helps to have a good idea what risk is, how it is measured and how it can be managed. This is the story of Against the Gods.

It begins by giving us an insight into early Roman numerals, and how close the ancients came to understanding probability. Unfortunately, despite being on the brink of success, they never crossed it. It took until the Renaissance when their works had been rediscovered by the West for probability theory to be created. In the Renaissance, progress was quick thanks to the likes of great mathematicians such as Bernoulli and Pascal. The man among this Era closest to providing an insight into portfolio theory was who else but a gambler (perhaps we might have something to learn)

It then follows the Victorian age, and their immense optimism, but it was also here that they discovered reversion to the mean. This, paired with the law of large numbers, has been the object of prayer for many a gambler, but it is explained how although this may be a law, it isn't set in stone. When on a losing streak, it may be a long time before it is reversed. Reversion to the mean is also interesting for us in crypto. When something is going extremely well, it is more likely to begin to reverse rather than continue sky rocketing. The opposite can also hold true as long as the asset actually has value.

The story nears the end with John Von Neumann, one of the key developers of Game theory and computers. Computers have seen the rise in risk management with the immense amount of calculations they can undertake, taking into consideration far more variables than what we humans ever could manage.

I believe that Against the Gods is a book that provides an amazing insight into the life of risk and just how many variables are in play at any one moment of time, regardless of how simple the world may seem. In crypto, this must never be forgotten, but if the technology is amazing, the capital gains will follow, which it has.

All for now,
CryptoGod101