Putting Pro-Innovation Bias on the Blockchain

Blockchain Bias

Over the past couple of years I've spent a lot of time listening to people wittering on about "the blockchain". They've claimed it can solve a plethora of society's ills – everything from the elimination of poverty to the overthrow of fiat currencies and the nation state.

Being charitable this is evidence of pro-innovation bias in all its perverse glory. Being cynical it's evidence of people trying to scam investment funds by capitalizing on the halo effect. The blockchain is a brilliant piece of innovation, which will one day – probably – lead to significant economic benefits, but in the end it's just another piece of technology.

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The Halo Effect: What’s in a Company Name?

Angels and Demons

The halo effect is a simple, pervasive and powerful psychological bias which sees us anchor onto a single positive feature of a person and then indiscriminately apply it to all of their other traits. So if we perceive someone as physically desirable we’re likely to assume that they’re attractive in all other ways as well. Which is highly fortunate for those beautiful but bad tempered, foul mouthed and cerebrally challenged personalities who commonly grace our multi-media world.

Companies will often attempt to use the halo effect by getting celebrity endorsements from completely unrelated but popular celebrities. Still, trading on such a simple psychological trait would be unlikely to fool savvy investors, you’d think. Wrongly, of course.

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