Unpacking Bitcoin: An autoethnographic analysis of the emergence of Bitcoin in China

In my previous blog post, I proposed investigating the current state of Bitcoin in China for my individual research project and recorded my initial thoughts, perceptions and reactions to Motherboard’s documentary Life Inside a Secret Chinese Bitcoin Mine (2015). The purpose of this post is to reflect upon, analyse and interpret this experience within its broader sociocultural context using an autoethnographic research approach.

Chang (2008, p.43) observes that autoethnography can be distinguished from other genres of self-narrative such as memoir and autobiography by the way it “transcends mere narration of self to engage in cultural analysis and interpretation”. In other words, autoethnography is not about focusing on self alone, but about searching for understanding of others (culture/society) through self (Chang 2008, p.43).

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Hall (1973, p.30, cited in Chang 2008, p.34) argues that “the real job” of studying another culture is “not to understand foreign culture but to understand our own…to learn more about how one’s own system works”. For my individual research project, I will analyse the experience of buying a bitcoin using a Chinese Bitcoin provider from the perspective of a foreign cultural outsider. This will allow me to gain an understanding of how my own cultural frame of reference informs, influences and structures this experience.

Context matters

Context matters

My first emotional reaction to the documentary was one of trepidation. The Chinese Bitcoin mine appeared dark, desolate and dangerous. I immediately envisioned a Blade Runner style dystopia where humanity has become enslaved to machines. The eeriness of the persistent, deafening buzzing noise emanating from the cooling fans evoked an industrial setting that reinforced this initial response.

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The Chinese Bitcoin mine featured in the documentary

Dystopia

A dystopian vision

My initial impression of Chinese Bitcoin mining as threatening and dystopic is indicative of a Western techno-Orientalist mindset. Roh et al. (2015, p.2) define techno-Orientalism as “the phenomenon of imagining Asia and Asians in hypo– or hypertechnological terms in cultural productions and political discourse”. The term techno-Orientalism was first coined by Morley and Robins (1995, p.6) to refer to the new economic and technological presence of Asian powers and the threat they posed to Western global dominance.

blade-runner

Cinematic techno-Orientalism in Ridley Scott’s Blade Runner (1982)

In the discourse of techno-Orientalism, the West maintains its position of moral and cultural superiority over the Other by projecting an image of Asia as the figure of empty and dehumanised technological power (Morley & Robins 1995, p.170). Techno-Orientalist tropes represent Asian people and culture as cold, impersonal and machine-like, devoid of any emotional connection to the rest of the world (Morley & Robins 1995, p.169). These stereotypes were evident in my first reaction to Chinese Bitcoin mining, thus demonstrating a tendency to unconsciously reproduce East/West dichotomies.

Upon viewing the documentary, I was surprised to learn that the Chinese government is not opposed to the proliferation of Bitcoin mining in China. Bitcoin is a currency that is explicitly designed to evade government control (Chang 2013). My initial assumption was that the decentralised nature of Bitcoin and the cyber-libertarian values it promotes are antithetical to the centralised regulation exercised by the Chinese government. This reflects the widely accepted ‘‘socialist-thus-oppressive’’ refrain and the discursive position of China in the Western imaginary. According to Ono and Jiao (2008, p.409), Western news media narratives construct China as afflicted by an archaic authoritarian government that is unable to master rapid and comprehensive modernisation. Indeed, the concentration of Bitcoin activity in China has raised concerns that the system could become vulnerable to meddling by the ruling Communist Party, which restricts cross-border capital flows and has tight control over the internet (Chen and Nakamura 2016).

My understanding of the Chinese government

My understanding of the Chinese government

In reality, however, China is quickly becoming a modern, quasi-capitalist powerhouse with tremendous economic traction, a massive population and a future that threatens ageing and slow-to-change western-style superpowers (Ono & Jiao 2008, p.406). The incredible pace of China’s modernisation is evident in the Chinese government’s open stance towards Bitcoin mining to date. Chinese Bitcoin miners have leveraged their access to lax regulations, cheap labour and inexpensive electricity to outmanoeuvre their global peers in performing the complex calculations needed to verify Bitcoin transactions (Chen & Nakamura 2016). As a result, China is now attracting huge investments from savvy overseas entrepreneurs who are seeking lucrative mining opportunities in the country (Redman 2016). In this way, my initial assumption that China is not particularly fertile ground for nurturing the growth of Bitcoin is misguided and representative of the Western media’s time-worn constructions of the Chinese government.

Despite China’s rising power and influence in the Bitcoin market, the continuing supremacy of Western culture remains a constitutive aspect of media discourse. In a recent article in the Daily Telegraph, Australia was heralded the “world leader” in digital currency after the Turnbull government revealed plans to reduce tax on Bitcoin transactions (‘Federal Budget’ 2016). This self-construction of technological superiority served as a cultural frame of reference against which I judged and interpreted Chinese Bitcoin mining. In particular, I expected the Chinese Bitcoin mine featured in the documentary to resemble the imagery propagated in the Western media of futuristic, high-tech data centres with clean and consistent rows of server racks.

server-room

My (Western) expectation of what a Chinese Bitcoin mine should look like

Whilst viewing the documentary, I also struggled to accept Bitcoin as a valid payment method. This stems from my assumption that virtual currencies are intended to be light-hearted and fun, designed for trivial purposes such as purchasing virtual items in online games. My childhood is filled with fond memories of using virtual currencies in the fictional online habbo_ivan_walshworld of Habbo Hotel. As a 12-year-old, I spent hours crafting the perfect Habbo avatar and frequently requested my parents to buy me Habbo credits so that I could attain a VIP membership with access to exclusive hair and clothing styles, room designs and furniture. Based on this experience, I struggled to accept that virtual currencies such as Bitcoin can be used to purchase “real” goods and services in the “real” economy. This is supported by Hoffman (2011) who argues that virtual currency has long been seen as little more than the online counterpart of Monopoly money – a cash substitute largely used by online game players to spend in imaginary Internet worlds of their making.

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Virtual currency in Habbo Hotel

My initial skepticism towards Bitcoin is also the result of negative publicity that I was exposed to prior to watching the documentary. In the mainstream media, Bitcoin has been associated with a wide range of illicit activities including sales of illegal goods, drugs and weapons, assassinations, Ponzi schemes, money laundering, illegal mining, unlawful gambling and outright theft (Hurlburt & Bojanova 2014, p.12). This has spread Fear, Uncertainty and Doubt (“FUD”) about Bitcoin and the Bitcoin economy, thereby, contributing to Bitcoin’s poor notoriety and reputation as a risky and insecure method of payment (Hurlburt & Bojanova 2014, p.12). However, Hurlburt and Bojanova (2014, p.13) argue that the negative hype is overstated and not entirely accurate. As such, the plethora of concerns surrounding Bitcoin and its perceived threats to the economy and traditional financial institutions can be regarded as a “technopanic”. A technopanic is a variant of moral panic theory and refers to an intense public, political and academic response to the emergence or use of media or technologies (Thierer 2013, p.315). My preconceptions about Bitcoin, therefore, reflect wider cultural anxieties about disruptive technological innovations which are fueled and perpetuated by the media.

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Another contributing factor to my distrustful attitude towards Bitcoin is the negative perceptions of Chinese Bitcoin mining that I gained through watching the documentary. The footage of the remote and dilapidated building with low security mechanisms and no identifiable brand name or logo led me to question the trustworthiness of the Bitcoin network. I perceived the Chinese mining operation as unprofessional and amateurish, particularly due to the run-down interior, dirty walls, dusty equipment, tangled cables and heap of empty boxes and discarded computer parts sprawled across the floor. I also questioned the reliability of a payment system that is run entirely by computers, while the employees maintaining the hardware smoke cigarettes and play games. These observations challenged my preconceived image of Bitcoin miners as white-collar employees working in sterile environments at state-of-the-art technology facilities.

At the same time, the documentary also undermined my understanding of the role of banks in assuring the safety and security of monetary transactions. Growing up, I was socialised to perceive banks as credible, responsible and trustworthy institutions that play an integral role in the financial system and wider society. 1472131609598In general, people trust banks with their money, and bank account deposit guarantee schemes exist in many countries (Raymaekers 2014, p.33). This is not the case yet with Bitcoin service providers (Raymaekers 2014, p.33). There is also no centralised bank, such as the Reserve Bank of Australia, which processes, verifies and produces bitcoins (Rountree 2013, p.5). In this way, my initial skepticism towards Bitcoin was influenced by my inherent trust in conventional, state-sanctioned banking.

Through this autoethnographic analysis, it has become evident that my initial thoughts, perceptions and reactions to the documentary emerged as a result of particular social, cultural, political and historical structures. By digging wider into the many factors underpinning my assumptions, I have been able to cast a different perspective on my first encounter with the documentary.  For my individual research project, I will take this autoethnographic account one step further in investigating whether my skepticism and distrust in Bitcoin is validated or contradicted by the actual experience of buying a bitcoin from a Chinese Bitcoin provider. This will produce a more holistic and intimate account of my autoethnographic experience.

References

Chang, GC 2013, ‘A China Triangle: Bitcoin, Baidu and Beijing’, Forbes, 24 November, viewed 21 September 2016, <http://www.forbes.com/sites/gordonchang/2013/11/24/a-china-triangle-bitcoin-baidu-and-beijing/#2e41181d11c9>.

Chang, H 2008, Autoethnography as method, Left Coast Press, Walnut Creek, California.

Chen, LY & Nakamura, Y 2016, ‘After 4,400% Surge, Bitcoin’s Fate Hinges on Huge Chinese Miners’, Bloomberg, 7 July, viewed 21 September 2016, <http://www.bloomberg.com/news/articles/2016-07-06/after-4-400-surge-bitcoin-s-fate-hinges-on-huge-chinese-miners>.

‘Federal Budget 2016: Weird stuff we learnt’ 2016, Daily Telegraph, 3 May, viewed 21 September 2016, <http://www.dailytelegraph.com.au/news/national/federal-election/budget2016/federal-budget-2016-weird-stuff-we-learnt/news-story/5b311cccdaca80cf7d56eafd26119b32>.

Hoffman, KE 2011, ‘E-Commerce: Beyond Fun and Games’, Digital Transactions, 1 September, viewed 21 September 2016, <http://www.digitaltransactions.net/news/story/E-Commerce_-Beyond-Fun-And-Games>.

Hurlburt, GF & Bojanova, I 2014, ‘Bitcoin: Benefit or Curse?’, IT Professional, vol.16, no.3, pp.10-15.

Morley, D & Robins K 1995, Spaces of identities: Global media, electronic landscapes and cultural boundaries, Routledge, London.

Ono, KA & Jiao, JY 2008, ‘China in the US Imaginary: Tibet, the Olympics, and the 2008 Earthquake’, Communication and Critical/Cultural Studies, vol.5, no.4, pp.406-410.

Raymaekers, W 2014, ‘Cryptocurrency Bitcoin: Disruption, challenges and opportunities’, Journal of Payments Strategy & Systems, vol.9, no.1, pp.30-40.

Redman, J 2016, ‘Visiting Tibet: An Inside Look at China’s Bitcoin Mining Mega-Facilities’, Bitcoin.com, 13 September, viewed 21 September 2016, <https://news.bitcoin.com/tibet-bitcoin-mining-hotspot/>.

Roh, DS, Huang, B & Niu, GA 2015, Techno-Orientalism: Imagining Asia in Speculative Fiction, History, and Media, Rutgers University Press, New York.

Rountree, D 2013, ‘Champing at the Bitcoin: Bitcoin, Regulators and the Law’, Communications Law Bulletin, vol.32, no.4, p.5-7.

Thierer, A 2013, ‘Technopanics, Threat Inflation, and the Danger of an Information Technology Precautionary Principle’, Minnesota Journal of Law, Science & Technology, vol.14, no.1, pp.309-386.

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