According to Wiki: Knob-and-tube wiring is an early standardized method of electrical wiring in buildings, in common use in North America from about 1880 to the 1930s. It consisted of single-insulated copper conductors run within wall or ceiling cavities, passing through joist and stud drill-holes via protective porcelain insulating tubes.
Thanks Wiki, but is it safe?
The short answer is, yes. As long as the wiring is not damaged and the insulating sleeves are in good shape this type of wiring is still safe however you should always have a junction box when making connections to another type of wiring such as seen here above.