16.5 mm Edited by Malcolm Campbell- BITCOIN AND BEYOND Royal No. 25 V erduyn RIPE Series in Global Political Economy BITCOIN AND BEYOND CRYPTOCURRENCIES, BLOCKCHAINS, AND GLOBAL GOVERNANCE Edited by Malcolm Campbell- Verduyn A PDF version of this book is available for free in Open Access at www.taylorfrancis.com. It has been made available under a Creative Commons Atrribution-Non Commercial-No Derivatives 4.0 license. an informa business ISBN 978-0-415-79214-1 Routledge www.routledge.com 9 780415 792141 Routledge titles are available as eBook editions in a range of digital formats 16.5 mm Bitcoin and Beyond Since the launch of Bitcoin in 2009, several hundred different ‘cryptocurrencies’ have been developed and become accepted for a wide variety of transactions in leading online commercial marketplaces and the ‘sharing economy’, as well as by more traditional retailers, manufacturers, and even by charities and political parties. Bitcoin and its competitors have also garnered attention for their wildly fluc- tuating values as well as implication in international money laundering, Ponzi schemes and online trade in illicit goods and services across borders. These and other controversies surrounding cryptocurrencies have induced varying govern- ance responses by central banks, government ministries, international organiza- tions, and industry regulators worldwide. Besides formal attempts to ban Bitcoin, there have been multifaceted efforts to incorporate elements of blockchains, the peer- to-peer technology underlying cryptocurrencies, in the wider exchange, recording, and broadcasting of digital transactions. Blockchains are being mobil- ized to support and extend an array of governance activities. The novelty and breadth of growing blockchain-based activities have fuelled both utopian prom- ises and dystopian fears regarding applications of the emergent technology to Bitcoin and beyond. This volume brings scholars of anthropology, economics, science and techno- logy studies, and sociology together with global political economy (GPE) scholars in assessing the actual implications posed by Bitcoin and blockchains for contemporary global governance. Its interdisciplinary contributions provide academics, policymakers, industry practitioners, and the general public with more nuanced understandings of technological change in the changing character of governance within and across the borders of nation-states. Malcolm Campbell- Verduyn is an SSHRC Postdoctoral Fellow at the Balsillie School of International Affairs, Canada. RIPE Series in Global Political Economy Series Editors: James Brassett (University of Warwick, UK), Eleni Tsingou (Copenhagen Business School, Denmark) and Susanne Soederberg (Queen’s University, Canada) The RIPE Series published by Routledge is an essential forum for cutting-edge scholarship in international political economy. The series brings together new and established scholars working in critical, cultural, and constructivist political economy. Books in the RIPE Series typically combine an innovative contribu- tion to theoretical debates with rigorous empirical analysis. The RIPE Series seeks to cultivate: • field- defining theoretical advances in international political economy • novel treatments of key issue areas, both historical and contemporary, such as global finance, trade, and production • analyses that explore the political economic dimensions of relatively neg- lected topics, such as the environment, gender relations, and migration • accessible work that will inspire advanced undergraduates and graduate stu- dents in international political economy. The RIPE Series in Global Political Economy aims to address the needs of stu- dents and teachers. For a full list of titles in this series, please visit www.routledge.com/RIPE- Series-in- Global-Political- Economy/book-series/RIPE Beyond Defeat and Austerity Disrupting (the Critical Political Economy of ) Neoliberal Europe David Bailey, Monica Clua- Losada, Nikolai Huke and Olatz Ribera-Almandoz Civil Society and Financial Regulation Consumer Finance Protection and Taxation after the Financial Crisis Lisa Kastner Bitcoin and Beyond Cryptocurrencies, Blockchains, and Global Governance Edited by Malcolm Campbell- Verduyn Bitcoin and Beyond Cryptocurrencies, Blockchains, and Global Governance Edited by Malcolm Campbell- Verduyn First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 selection and editorial matter, Malcolm Campbell-Verduyn; individual chapters, the contributors The right of Malcolm Campbell-Verduyn to be identified as the author of the editorial matter, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. The Open Access version of this book, available at www.taylorfrancis.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN: 978-0-415-79214-1 (hbk) ISBN: 978-1-315-21190-9 (ebk) Typeset in Times New Roman by Wearset Ltd, Boldon, Tyne and Wear Contents List of figures vii List of tables viii Notes on contributors ix Acknowledgements xiii 1 Introduction: what are blockchains and how are they relevant to governance in the contemporary global political economy? 1 MALCOLM CAMPBELL- VERDUYN 2 Moneys at the margins: from political experiment to cashless societies 25 MORITZ HÜTTEN AND MATTHIAS THIEMANN 3 The internal and external governance of blockchain-based organizations: evidence from cryptocurrencies 48 YING- YING HSIEH, JEAN- PHILIPPE (JP) VERGNE, AND SHA WANG 4 The mutual constitution of technology and global governance: Bitcoin, blockchains, and the international anti- money-laundering regime 69 MALCOLM CAMPBELL- VERDUYN AND MARCEL GOGUEN 5 Between liberalization and prohibition: prudent enthusiasm and the governance of Bitcoin/blockchain technology 88 KAI JIA AND FALIN ZHANG 6 Cryptocurrencies and digital payment rails in networked global governance: perspectives on inclusion and innovation 109 DAIVI RODIMA- TAYLOR AND WILLIAM W. GRIMES vi Contents 7 Governing what wasn’t meant to be governed: a controversy- based approach to the study of Bitcoin governance 133 FRANCESCA MUSIANI, ALEXANDRE MALLARD, AND CÉCILE MÉADEL 8 Experiments in algorithmic governance: a history and ethnography of “The DAO,” a failed decentralized autonomous organization 157 QUINN DUPONT 9 Conclusion: towards a block age or blockages of global governance? 178 MALCOLM CAMPBELL- VERDUYN Index 198 Figures 3.1 Variation of the five cryptocurrencies in our sample along the decentralization spectrum 58 4.1 The mutually constitutive relationship between technologies and international regimes 71 5.1 Spectrum of Bitcoin/blockchain governance 91 5.2 Bitcoin price fluctuations, 2009–17 (US dollars) 94 9.1 Interrelationships between governance by, with, and of blockchains 186 Tables 2.1 Evolution of the Bitcoin money game 41 3.1 List of variables 62 3.2 Regression results 63 5.1 Key events and policies in China 102 Contributors Malcolm Campbell- Verduyn is an SSHRC postdoctoral fellow at the Balsillie School of International Affairs. His research combines a general focus on lan- guage and ideas in the global political economy, with a specific interest in the roles of private actors, technologies, and technical artefacts in contemporary global governance. His research has appeared in the journals Business and Politics, Competition and Change, Global Society, Journal of European Public Policy, New Political Economy, and New Political Science. He is the author of Professional Authority after the Global Financial Crisis, published in 2017 by Palgrave Macmillan. Quinn DuPont is a postdoctoral researcher at the University of Washington. He studies human and social dimensions of cybersecurity, cryptography, and code. He has a PhD in information science (Toronto), and is an ALA- accredited librarian (Western), with a decade of industry experience as a senior information specialist at IBM, an IT consultant, and a usability and experience designer. He is currently writing a book on cryptocurrencies and blockchains (Polity). Marcel Goguen is a PhD candidate in political science at McMaster University, Hamilton, Canada. He studied political science at l’Université de Moncton and the University of Ottawa. His research focuses on the interstice between international relations theory, political theory, and global finance. Under the supervision of Tony Porter, he is participating in research funded by the Social Sciences and Humanities Research Council of Canada (SSHRC) on ‘Numbers in the changing fabric of global governance’. William W. Grimes is Associate Dean for Academic Affairs and Professor of International Relations and Political Science at the Frederick S. Pardee School of Global Studies at Boston University. He is the author of Unmak- ing the Japanese Miracle: Macroeconomic Politics, 1985–2000 (Cornell University Press, 2001) and Currency and Contest in East Asia: The Great Power