In this blog post, Kobe De Keere opens his journal of field notes and takes us into the often hidden world of cryptocurrencies. While crypto often gets a bad rap for its get-rich-quick schemes and illegal online markets, its journey has revealed a much more complex ecosystem. Yes, scams, market manipulation and crime are commonplace, but there is much more beneath the surface. Surprisingly, as Kobe ventured down the crypto rabbit hole, he faced more pushback from his sociological peers than from the crypto enthusiasts studied.
Only two years ago, I had a very limited understanding of cryptocurrency. I certainly failed to grasp its appeal. Despite my rudimentary knowledge, it still bored me. To me, crypto was something that mostly naive young men were interested in because they wanted to outsmart us all and get rich quick. I felt little sympathy for this and so largely ignored it. Yet when in 2021 the market saw a huge surge, pushing the overall market capitalization to over $2 trillion, I was struck by the fact that many of the most powerful players in finance, such that JP Morgan, the SEC or the ECB, appeared to be largely hostile to this new emerging financial product. This got me thinking: could this really challenge our current financial system? And if so, is that necessarily a bad thing? Knowing how the financialization of our contemporary economy, as Neely and Lin have pointed out, has hardened the reproduction of elites and accentuated economic inequality, I decided to jump down the crypto rabbit hole, taking me on a journey that proved dizzying and disorienting. I came out the other end both amazed and worried. These are notes from my trip.
Entering unknown territory
Entering a completely new field comes with at least two major challenges: a knowledge problem and an access problem. Regarding the first point, not only is the crypto market an emerging field that does not yet have many sources of institutionalized knowledge, but at the same time one must gain a basic understanding of the technical intricacies behind cryptocurrency. It was necessary to familiarize myself with concepts like distributed ledgers, hash functions, staking, proof of work, smart contracts or zero-knowledge proof to go deeper into the rabbit hole. Just like Alice in Wonderland eating the mushroom, I taught myself by buying, receiving, sending or trading (tiny amounts) of crypto. It was only through this process that I began to understand the logic behind cryptography and the ideological aspirations encoded within it. This process of initial purchase and then understanding is often described in the crypto ecosystem as the Trojan horse effect: the digital coin you buy ultimately turns out to contain an entire worldview.
Although we are talking about a digital market, the crypto world exists both online and offline. All over the world, people are organizing meetups, developer workshops, hackathons, and global conferences. I discovered a very welcoming ecosystem, where people are eager to explain what they are supporting, building or improving. As Koray Çalışkan showed in his pioneering ethnography, many cryptocurrency projects – and the variety of projects and goals is enormous – start as community projects marked by volunteerism, voting systems and donations. I’ve noticed that this eagerness to guide newcomers into their crypto world is (at least in part) based on a sense of stigma. Many crypto enthusiasts I’ve spoken with lament a general lack of knowledge among “normals” – those who haven’t (yet) bought into crypto – or have been misrepresented by public media. Jokingly, my respondents often pointed to a website cataloging media reports of Bitcoin’s alleged demise.
Unexpected resistance
Far from experiencing resistance when entering the field, I was welcomed into crypto communities, asked to volunteer during hackathons and invited to the offices of several crypto exchange platforms. On the other hand, resistance comes more often from my academic peers than from the crypto world. Most of my disciplinary backgrounds recognize the relevance of cryptography as a subject. But I was under continued pressure to reframe it to fit general stereotypes surrounding crypto. Often, my fellow sociologists try to convince me that crypto is either a get-rich scam rooted in toxic masculinity, or that it is simply criminal money used to fund terrorist organizations, drug cartels, and dictatorial regimes. None of these assumptions match my field experience, nor are they based on empirical evidence (for example, only 0.3% of crypto transactions are estimated to involve criminal activity).
Thus, my reluctance to characterize crypto as a simple scam or a greed-infested field has caused either confusion or hostility. This situation of first having to clear away all of these preconceived notions about cryptography (some of which I myself had initially) in order to get to the actual study was certainly an unforeseen challenge. Yet crypto is so new that we are still in the phase of what Robert Merton called “establishment.” Part of the work to be done is to first describe, define and situate the full social meaning of cryptography.
The versatility of crypto
“Money is a versatile thing. You have to give him credit for that.says John Self, the protagonist of Martin Amis’s dazzling 1984 novel. Money. This certainly also applies to digital currency. The introduction of digital scarcity, through blockchain, has the performative potential to reshape our economic lives in a variety of ways. A recent study I conducted with colleagues on crypto-related YouTube content revealed several sociotechnical imaginaries at play that attribute value to crypto. While there is certainly a speculative aspect, particularly in the way “finfluences” attempt to convince their audience that crypto trading will make them rich, we also found a more political-economic repertoire – largely inspired by economics from the Austrian school – aiming to replace our fiat-based monetary systems with protocol economies.
But it’s also about how crypto can bank the unbanked around the world while making international remittances easier. This transcends our typical discussions about money and allows us to reimagine property rights, privacy, and the organization of economic power. In this case, crypto is about decentralized organizational structures (DAOs), Web3, and creating an Internet of value.
Even though scammers, pyramid schemes, and terrorist networks do indeed exploit cryptocurrency markets, I would argue that they are parasitically attached to – rather than defining – this socio-economic ecosystem. The world of cryptography is multifaceted and difficult to understand using traditional sociological categories. It is therefore not simply a question of applying our old tools to a new subject, but rather, as Ori Schwarz writes in the context of digital sociology, a total reimagining of our theoretical instruments.
Image credit: Kobe De Keere
All articles published on this blog give the views of the author(s), and not the position of the Department of Sociology or the London School of Economics and Political Science.
