An Analysis of Cryptocurrency
“Cryptocurrency may be a good investment if you are willing to accept it is a high risk gamble which could pay off – but also that there is a strong chance you could lose all of your money.” (Rodgers). In the article “ Is cryptocurrency a good investment?” written by Tom Rodgers and published by The Times Money Mentor, the risks of purchasing cryptocurrencies are discussed. Throughout the article, Rodgers uses multiple rhetorical strategies, such as Ethos, Pathos, and Logos, to propel his notion that cryptocurrency isn’t a good choice. While the techniques he uses could persuade some, there are multiple argumentative fallacies that undermine his claim and should be addressed, such as scare tactics, stacking the deck, appeals to false authority, slippery slope, and equivocation.
First let's define what cryptocurrency is. According to Forbes.com , “ A cryptocurrency is a digital, encrypted, and decentralized medium of exchange” (Ashford). So basically, it is a type of online currency that is self verified, and isn’t regulated by any outside organizations. Due to the fact that it isn’t regulated by an outside party or government, as well as its unpredictable nature, many have speculated on whether or not it's a safe investment.
Secondly, throughout the article, Rodgers uses Ethos to persuade the audience that they should steer away from purchasing cryptocurrencies. Ethos, which is a form of persuasion that calls upon the credibility of an author, and can be used to convince the audience that the author is believable, can be a valuable tool, however, Rodgers's use of the ethical fallacy, appeals to false authority, completely overshadows the persuasion tactic he used. Appeal to false authority is a fallacy of an ethical argument when the author claims themselves or another as a credible warrant for a claim, and these sources aren’t actually experts on the topic. Within the first paragraph, Rodgers cites The Bank of England saying, “The Bank of England would not agree that it is a good investment. Governor Andrew Bailey warned that people who invest should be prepared to lose all of their savings” (Rodgers). However, what Rodgers fails to address is that the top executive of The Bank of England, Governor Andrew Bailey, “has lost credibility on the markets and among politicians after his 'apocalyptic' forecasting of UK prospects” (Brummer) says Alex Brummer on thisismoney.co.uk, which was deemed the number one financial website of the year. This, on top of the fact that Bailey had only served as governor for merely two years, raises the question of whether or not he is a credible source to cite.
Furthermore, Governor Andrew Bailey’s age raises questions as to how much he would know about the world of online currency, as this market is more geared to the younger, tech-savvy generations. This would be an example of the false authority fallacy because the Governor isn’t an expert on the specific topic of cryptocurrency. This is relevant in the context of the article because Rodgers’ article is posted on a popular British website, where the audience would likely be aware of the governor's shortcomings, and credibility thus undermining Rodger’s claim. This would affect the audience's understanding of the topic being discussed because the reader would be under the impression that Rodger’s, by association, also doesn’t understand what he is writing about.
Next, Rodgers uses another form of ethical fallacy called stacking the deck. Stacking the deck, simply put, is when the author only articulates one side of the argument, specifically the one that the author favors. Writing is a conversation, and this article provides no dialogue one so ever. Not once does the author disprove a potential counterargument. This is completely detrimental to his thesis because if a reader has any doubts at all, which we’ve already established weren’t addressed, it would lead to the reader making the assumption that that doubt is truthful or irrefutable, which completely defeats the purpose of the persuasion tactics that the author has put into the article. Rodgers says, “ In the UK, people holding money with firms regulated by the Financial Conduct Authority (FCA) are protected by the Financial Services Compensation Scheme; if, say, a bank or building society goes bust, compensation of up to £85,000 will be available to customers through the FSCS. Most crypto assets, however, are not regulated by the FCA, and so if the cryptocurrency exchange or platform where you have invested goes bust, there is no guarantee you will get your money back” (Rodgers). N26.com makes a great counterargument to this saying, “ Some of the major benefits of cryptocurrencies aren’t linked to the currencies themselves, but to the infrastructure that supports them. That’s the blockchain—the decentralized data-storage ledger that tracks every transaction undertaken on it. Once you make an entry in the blockchain, it can never be erased. And with the blockchain stored decentrally across multiple computers, no hacker can access the entire chain in one go; any information stored in it is safe for good” (N26). This would have been a great counter argument to bring up, so that Rodgers could address the flaws that N26 makes, such as how N26 doesn’t address individual companies shutting down, thus causing investors to lose money, and more.
At face value, this article does a great job of using pathos to propel the claim, but the use of several emotional argumentative fallacies, specifically scare tactics and slippery slope shed light on the argument's holes. Pathos is when the author uses emotional appeals to influence the audience to alter their judgment. An example of this is when the author says, “Of course, the deflationary argument in favor of bitcoin falls down if governments decide to regulate specifically against it. India, for example, has proposed a ban on cryptocurrency trading, suggesting it will impose fines on anyone caught holding onto digital assets of any kind.” (Rodgers) This, however, is quickly undermined due to the use of scare tactic fallacies within this same quote. Scare Tactic fallacies are when the author uses actual fears, such as loss of money, into inflated panic, in this case, bankruptcy and facing litigation. This is an example of this fallacy because it perpetuates the reader's fear of losing all of their investment, without addressing any counter arguments, such as the slim chance that something like this will happen in Great Britain, where most of the article's audience resides. Scare tactic fallacies are dangerous in writing because it coerces the audience into accepting the claim, rather than actually convincing them using sustainable evidence.
Furthermore, this quote also contains a second emotional fallacy, slippery slope. The slippery slope fallacy is when the author portrays a choice made in the present as tomorrow's downfall. In this case a lot of people participating in the purchasing of cryptocurrencies in the present could lead to the need for codification in the future. This quote insinuates that this legislation would be extreme, causing any investor in digital currencies significant financial loss. On top of that, any signs of legislation at all could cause alarm considering one of the major appeals to cryptocurrency right now is the fact that it is almost completely unregulated. This is an issue because it’s not reasonable to make the assumption that one cataclysmic event is going to happen just because a separate miniscule one occurs.
Equally important is the fact that Rogers uses an appeal to a logical argument fallacy, a fallacy that counteracts the usage of Logos within an argument. Equivocation is the use of large, ambiguous words, sacchariferous for example, that deceive or distract from the truth. In this document Rogers equivocates several times. Using terms like “ethereum”, “ inflation hedge”, “ inflationary and deflationary currency”, and “volatility” that relate to the topic, are necessary. These are important terms that the average joe wouldn’t know the meaning of, so providing a definition or explanation is imperative to the reader's comprehension of the article. However, Rodgers hides behind the ambiguity of these term’s meanings, due to the fact that he never defines them, thus distracting the reader from the other flaws in his writing, but also the main message that Rodgers is trying to get across.
To reiterate, Rodgers use of multiple argumentative fallacies, those being scare tactics, stacking the deck, appeals to false authority, slippery slope, and equivocation, allows his use of the rhetorical strategies ethos, pathos, and logos to be compromised, which subsequently also diminishes his claim.
Works Cited
Brummer, Alex. “Bank Boss Andrew Bailey’s Credibility on Line over Inflation Figures.” This Is Money, 13 Aug. 2022, www.thisismoney.co.uk/money/markets/article-11108463/Bank-England-boss-Andrew-Baileys-credibility-line-inflation-figures.html. Accessed 19 Sep. 2022.
Rodgers, Tom. “Is Cryptocurrency a Good Investment?” Www.thetimes.co.uk, 5 Sep. 2022, www.thetimes.co.uk/money-mentor/article/cryptocurrency-good-investment/#is-bitcoin-a-good-inflation-hedge. Accessed 19 Sept. 2022.
Ashford, Kate. “What Is Cryptocurrency?” Forbes Advisor, 20 Nov. 2020, www.forbes.com/advisor/investing/cryptocurrency/what-is-cryptocurrency/. Accessed 27 Sept. 2022.
N26. “Pros and Cons of Cryptocurrency: A Beginner’s Guide.” N26.com, 17 Jan. 2022, n26.com/en-eu/blog/pros-and-cons-of-cryptocurrency. Accessed 27 Sept. 2022.