In Nassim Nicholas Taleb’s latest book, Skin in the Game: Hidden Asymmetries in Daily Life he makes the case that it’s dishonourable to talk about, debate or challenge something when one doesn’t bear any risk.
When one has an invested risk in something they consider the possible repercussions and outcomes more seriously because they have something to lose.
A politician who wants his country to go to war overseas will take a different stance if he had to live there after the war is over.
A market trader who has to put his own money into his dealings will take less risk when he personally has something to lose.
This is called having skin in the game and in traditional societies, before career politics and complex finance, the person who rose to the top in life took the most risk.
Taleb makes the case that only a third of Roman emperors died in the comfort of their own bed. The greater their own personal risk the higher up the chain they went.
That’s having skin in the game.
Skin in the game brings credibility
It’s all too easy to spout off on Twitter about something that doesn’t affect you either way. Many people do.
They lack the intuition that comes with understanding the nuances and complexities of using social media.
Despite a net worth of hundreds of millions, Garyvee still uses the technology himself. Not only does he invest in social media companies, he builds businesses on the back of it. He has skin in the game.
Futurists are the same.
“Robots will steal your job in 10 to 15 years time” they claim, yet who is going to check up on their predictions 15 years from now? These wild and outlandish statements (or guesses, rather) require them to have no skin in the game.
The energy shift
A lot of smart people I follow online are suggesting that the world is going through a form of energy shift and I’d be lying if I said I didn’t feel a change in the air.
The era we’re moving out of allowed us to sit on the sidelines and be armchair commentators, whereas this new era will require us to have more skin in the game.
For years, many people said cryptocurrencies like Bitcoin were a scam or a Ponzi scheme, yet if they were so sure why didn’t they short the market?
If they knew for certain that the price of Bitcoin would go up and then back down again why didn’t they buy low and sell high? No skin in the game.
So now, I’m a cryptocurrency investor. I have skin the game.
I care about what happens to the crypto market and specific cryptocurrencies that I have invested in.
I care about whether the government will legislate against the industry and whether it will tank or fly.
I need to understand the underlying blockchain technology and its possibilities as decentralisation mechanism for information and currency exchange.
As I begin to learn more, I’ll write about it here.
But having skin in the game in any endeavour will be a prerequisite from henceforth.
Intermittent fasting is dangerous, you say? Do enlighten me on your health protocol, wise one.
Don’t like a political ideology? Then, other than a few retweets on Twitter, what moves are you making to fight it?
Think the world is an evil place? What are you doing to bring the light?
I include myself in this too.
Having skin in the game is about credibility. And this is where our future lies.