What is Bitcoin? Imaginative Control and the Realities of Innovating within Capitalist Markets

• In Event: 4255 - Section on Economic Sociology Roundtables (1 hour)
  In Refereed Roundtable 60min: 1. Entrepreneurship and Innovation

Abstract

In less than a decade, Bitcoin has gone from being the monetary experiment of a small group of “Techno-Libertarians” to becoming the basis of new multibillion (USD) financial technology and digital asset sectors dominated by the many of the same institutions and actors it was initially intended to subvert. Building upon recent work by Beckert (2017) that has centered the role of “imagined futures” in economic action, this article argues that this developmental trajectory is a natural outcome of innovation in capitalist markets, one that arises from such systems’ inherent bias toward realizing the frameworks of interpretation and valuation possessed by those who are best positioned in the existing order to direct the flow of investment resources. Leveraging the strong conformance to free market ideals that characterized cryptocurrency’s conception and development, this work draws upon an original collection of sources documenting the history of cryptocurrency’s development, automated content analysis of over 7,500 media reports between 2011 through early 2016, and longitudinal trends in venture capital funding over the same time period to demonstrate how this emergent form of imaginative control plays out in real capitalist markets and the impacts this dynamic has on bounding the space of products and solutions that are likely to arise from innovation within capitalist markets.

Author

• Lynette Shaw, University of Michigan