One of the best parts of Philosophy 101 has to be the section on logical fallacies. So what are fallacies?
Fallacies are arguments that seem sound on the surface and are pretty persuasive but when you sit down and think about them a bit more, you realize that there's something wrong with the logic.
I thought it would be good to discuss some fallacies on Proof-of-Brain so that we can recognise them easier next time. Let's start with one that's close to our hearts:
"Gold has been around for 5,000 years. Bitcoin just doesn't have the history that gold has..."
I heard this quote on a podcast I watched recently. Wasn't able to dig it up but it is a common one that we see in the financial press from time to time.
In the Bitcoin vs Gold debate, oftentimes, the pro-gold camp brings out gold's history as a store of value as for why it is a superior choice to Bitcoin.
Is the argument sound?
Without thinking too much about it, that does sound like a sound argument:
- Gold has been a store of value for a very long time.
- Investments that retain their value for a long time are good investments.
1>2>Therefore, gold is a good investment.
Appeal to Tradition
The problem with the argument is that it is making an appeal to tradition. It is a fallacy that something is correct or better because it has 'always been done that way'.
Here are some famous examples to drive home the point:
"The Americans have need of the telephone, but we do not. We have plenty of messenger boys." — William Preece, British Post Office (1876)
"The horse is here to stay but the automobile is only a novelty—a fad." - president of the Michigan Savings Bank (1903)
"There is no reason for any individual to have a computer in his home." - Ken Olson
"The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?" - Associates of David Sarnoff
"It will be years - not in my time - before a woman will become Prime Minister." - Margaret Thatcher (1969)
As you can see, the appeal to tradition fallacy, applies not only to technology, but also to traditions and norms like only men having the ability to vote in the past.
One thing to be mindful of
The opposite of the appeal to tradition, is the appeal to novelty, also known as the early adopter's fallacy. This is when any new discovery or improvement has to be better. Why? Simply because it is newer.
Ultimately, Bitcoin and cryptocurrencies in general will live and die based on their usefulness not because some talking head on TV or the Internet says so.