When tales of money fail: the importance of price, trust, and sociality for cryptocurrency users

ABSTRACT

This paper is based on research among blockchain communities in the Netherlands and online terrains. Through an empirical example, it explores tales produced by projects based on the blockchain protocol and on the premise that cryptocurrencies are money and that money has generative potential for social and economic change. By unpacking the pragmatics of a particular project – Bitnation and Pangea – I argue that despite tales of decentralisation through the moneyness of cryptocurrencies, and the distributed and automated character of the blockchain protocol, these currencies, and projects, are deeply entangled with fiat and mainstream economies and markets. This is visible by looking at the ups and downs of cryptocurrency pricing and on the effects this volatility has on (certain) projects. The lack of a sustainable community of trust in cryptocurrencies as money – particularly visible in initiatives following more libertarian and utopian tales, detached from everyday life realities – and the way these retain attention mainly due to speculation, have very real effects for blockchain based projects. No matter how radical their tales for decentralisation and socioeconomic revolution are, utterances for these tales to become real have to be there, and seem absent.

KEYWORDS:

• Cryptocurrencies
• monetary multiplicity
• digital economies
• fiat
• speculation

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 For reflections on conditions of success and unsuccess of other monetary and community building endeavours see, for instance, Peebles 1991, about the case of the Euro and the case of the Øresund Region.

2 Coinmarketcap is a website dedicated to listing cryptocurrencies, their price oscillations, and market capitalisation. See: https://coinmarketcap.com/ [Accessed 12 February 2021].

3 A software can be considered an intermediary, with its own bias and stakes, as programmed by the creators.

4 In this case, a proof of concept reflects a pilot software program designed to prove that what a project proposes to do – its concept – is feasible.

5 The system has more complexity than the details described here, please see Tempelhof et al. 2017 for more detail.

6 See https://coinmarketcap.com/ [Accessed 14 June 2021]

7 Initial Coin Offerings (ICOs) are platform token pre-sales used as a sort of equity-based means of decentralised funding, or crowdsale, in some ways similar to Initial Public Offerings (IPOs).

8 See: https://www.facebook.com/MyBitnation [last accessed 23 June 2021].

Additional information

Funding

This work was supported by Fundação para a Ciência e a Tecnologia [Grant number PTDC/IVC-ANT/4520/2014,UID/SOC/04521/2019].

Notes on contributors

Inês Faria

Inês Faria is a researcher at the CSG/SOCIUS - ISEG, University of Lisbon. She has a PhD in Medical Anthropology from the University of Amsterdam, focusing on reproductive health and reproductive technologies. Since 2016 she has been developing research about ‘alternative’ and mainstream financial uses of blockchain technology, she was involved in the project Finance Beyond Fact and Fiction that explored financial changes and continuities in Europe after the 2008 crisis. Currently, she continues working about the relations between technology and society regarding the areas of finance, but also of healthcare, respectively in European and sub-Saharan African contexts.