Bitcoin Imaginaries: Do They Even Need the Real World?

I read academic papers about blockchain for a living. Some of them are groundbreaking, others are pure garbage, but one paper, written by Yong Ming Kow and Caitlin Lustig, appeared to be hard to forget - I am still not sure to which bucket it belongs.

Sometimes it even keeps me awake at night. Its title is “Imaginaries and Crystallization Processes in Bitcoin Infrastructuring”, and it can be found/purchased/borrowed here. THe authors explore the motives of different stakeholders in the Bitcoin community - developers, miners, entrepreneurs, and investors - based on their observations at two key conferences in 2015. 2015 was the turning point for Bitcoin - this is when it became a corporate affair. David Yermack characterizes it as "an explosion of interest from industry" in his much cited paper "Corporate Governance an Blockchains", and a YouTuber Barely Sociable offers a conspiracy-driven but highly amusing analysis of the divide in the Bitcoin community in 2015 here. Finally, there is one more academic paper on decision-making in blockchain communities here - but I haven't read it yet.

Debates about the "blocksize increase" make the main case for the study of infrastructuring in IT and business communities conducted by Kow and Lustig. The authors describe these debates as not particularly fruitful, for a number of reasons. Interestingly,

"The bitcoin miners gained unprecedented (and unexpected) power in making decisions regarding designs of the Bitcoin blockchain" (225).

Who would have thought, in our decentralized world.

The authors state that global infrastructuring projects such as Bitcoin are challenging because

"there are few objective measures that stakeholders in infrastructuring can utilize to identify the best course of action" (211).

For this reason, stakeholders use so-called 'imaginaries': abstract ideas and narratives that help them consolidate their actions in implementing shared infrastructures - "an abstract call to action" (224). "Imaginaries" are different from "forms of thinking such as daydreaming and fantasizing" (211), because... Right, because they are about blockchain! At least, I could not find any other differences. Maybe I am wrong, and my reviewers will correct me.

It may be that my whole life has been a lie. I have lived much of it under the impression that there is a well developed set of practices called Business Analysis, specifically used to help stakeholders agree about the structure, particular features and general architecture of large projects and their integrations.

"The key to forming successful project relationships is understanding that different stakeholders have different expectations of the project and different definitions of project success" (Bourne 2006).

Business analysts start from the assumption that all stakeholders see the project differently, but they should all be reasonably satisfied in the end. This satisfaction is not achieved by collective fantasizing, but by delivered projects and their performance. While every stakeholder has a different idea of success, the job of a business analyst is to describe these ideas as thoroughly and realistically as possible, and to establish reasonable and achievable indicators of future performance. It could be returns of investments, customer satisfaction or any other positive outcome that is especially dear to a stakeholder's heart.

Weirdly enough, the authors list these indicators and prerequisites of future success as 'obstacles' that disconnect stakeholders from Bitcoin imaginaries and hinder the progress. Moreover, if stakeholders do not share the imaginaries of others, they become 'gatekeepers'. This is how Yermack describes 'gatekeepers' in the blockchain community,

"The gatekeeper can restrict entry into a market, assess monopolistic user fees, edit incoming data, treat some users preferentially, limit users' access to market data, and possibly share user data with outsiders, among other problems" (12).

What turns stakeholders into 'gatekeepers', as in Kow and Lustig? Actually, completely reasonable second thoughts. Miners, for instance, care about bitcoin's investment value most. This is literally their stake in the game, and they will not be satisfied by anything imaginary. From the viewpoint of a business analysis (as it works in the real world), this is the stakeholder's requirement that cannot be ignored.

Then, for corporate developers, user experience is at stake. The authors of the paper call it "imaginary user experience", because, in their perspective, this is "how imagined users would use Bitcoin" (220); however, this is exactly about how real users will use Bitcoin, and this is also the key priority.

Other developers mention the possibility of a permanent loss of the keys to the wallet and slow transactions. Those are minor concerns, but a good business analyst would note them all, and these complaints are still valid problems of many users of Dapps.

Allow me to bring up one more quote that disrupts my sleep-deprived mind every time I think about it.

"For the Bitcoin companies, investors like Kyle acted as a different kind of gatekeeper by only funding entrepreneurs who could design technologies that deliver good user experience" (221) .

• Why would an investor fund anything else?
• Why should they fund everyone?
• What if some enterpreunerial ideas are actually just scam?

In my humble opinion, you cannot make a big project happen by labeling real-world needs of its stakeholders as 'gatekeeping'. The project is delivered when all aims are aligned, or, at least, there is some form of consensus about shared goals. And it helps when the common vision is realistic and actually shared by all stakeholders.

But what if it is not? The authors make a rather surprising statement in the end:

"Importantly, the aim of an infrastructuring project like that of Bitcoin is not simply to build a system for user benefits, but also to disrupt and displace existing financial systems" (227).

Does any of the key stakeholders - developers, miners, entrepreneurs, and investors - really want to destroy the global financial system? Is this their shared vision? Is it in their plans, and how will they benefit from it?

Is there any stakeholder who would profit in any way from making this Bitcoin utopia come true? And if yes, is there a realistic roadmap for it? Is it even legal?

Personally, I would be reasonably satisfied watching the world burn - but maybe - just maybe - other people have different priorities? I should probably take my world domination fantasies elsewhere, and accept that not all imaginaries are shared. Especially bitcoin imaginaries.

REFERENCES

Bourne, L. (2006). Project relationships and the Stakeholder Circle™. Paper presented at PMI® Research Conference: New Directions in Project Management, Montréal, Québec, Canada. Newtown Square, PA: Project Management Institute.

Kow, Yong Ming, and Caitlin Lustig (2018). Imaginaries and Crystallization Processes in Bitcoin Infrastructuring. Computer Supported Cooperative Work (CSCW) 27, no. 2 (April): 209–32. https://doi.org/10.1007/s10606-017-9300-2.

Yermack, David. “Corporate Governance and Blockchains.” Review of Finance 21, no. 1 (March 1, 2017): 7–31. https://doi.org/10.1093/rof/rfw074.