Crypto-Capital: The Political Economy of Cryptocurrencies

Technology and capitalism are intertwined in an historical and dialectical relationship. One aspect of technological advancement is that it allowed for more efficient and distant trade networks which ultimately allowed for the exchange of value to go beyond city walls--and eventually national borders. Cryptocurrencies and blockchain technology represent a new phase of this historical process. Cryptocurrency systems and their technical details are complex as well as unintuitive. A higher level understanding of these systems assists in deconstructing the particulars. Features and protocols underlying cryptocurrencies obscure and obfuscate an individual entity's transaction behavior and real life identity. This obfuscation makes these systems difficult to study.

In this study I deanonymize key actors in two cryptocurrency systems--bitcoin and litecoin. Using this deanonymized network I study the evolution of the transaction networks in both systems. Ultimately I argue that cryptocurrencies, counter to popular rhetoric employed by advocates, are not a decentralizing or democratizing force. I show that consolidation is occurring within these systems' infrastructural and organizational contexts and that this consolidation is deeply intertwined with changes in the underlying social structure as well as the external and abstract market surrounding these systems.