Knob and tube wiring
Knob and tube wiring used cloth insulation. Over time this insulation can wear out, become brittle, and fall off, leaving bare wire. The ceramic knobs and tubes provide some protection because even if the insulation does fall off, the bare wire can not touch the wooden structure. The insulation is also somewhat flammable. Some knob and tube insulation intended for industrial use contained asbestos, which reduced the risk of fire, but can cause cancer. Unlike modern wiring, splices were not contained in a protective box. If a splice failed, it could make a spark and start a fire. The fuse boxes usually had no protection from using an incorrect fuse. An incorrect fuse could cause the wiring to overheat and become damaged or start a fire. Another problem is that when a fuse blew, people who didn't know or didn't care about the hazards would sometimes replace it with a coin or a ball of foil if a replacement fuse wasn't available, leaving no overload protection at all. These issues can be partially corrected by installing a modern circuit breaker panel with arc fault circuit interrupter breakers. There was also no ground wire. Knob and tube can be updated with a GFCI to add the equivalent of grounding. There is generally no need to replace knob and tube wiring if it is in good condition.