PI: Prof. Ilan Talmud.
Research Students: Mr. Yaron Connoly.
The study aims at inquiring into social devices and organized activities embedded in the market making of a “virtual currency”. The Bitcoin market is embedded in anonymous, decentralized, de-territorialized, online system. Trade in Bitcoin is risky, as it involves high degree of uncertainty regarding valuation, fluctuation, liquidity, and a lack of formal institutional regulation. Exploratory analysis conducted within the Israeli Bitcoin community reveals that market organizers use various social and rhetoric devices in order to promote market legitimacy and velocity. The proposed study aims at systematically examining the ways in which market organizers attempt at influencing investors to frame their investments as valuable, despite high levels of uncertainty, dramatic fluctuations, recurrent fraud cases, technical interruptions, public skepticism, and regulatory uncertainty. The study will explore to what extent the practical materiality of Bitcoin is dependent on trust in virtuality, and acceptance of “Folk Theory” of economics, based on trust in the efficient operation of algorithmic regulation, private production of money, and conspiracy theories of banking. The PI has experience in studying computer mediated communication, social networks, and economic sociology, using a variety of research contexts and methodologies.