Blockchain is considered a viable technology with great potential in industrial, scientific and policy circles. Although they are applications of this technology, Bitcoin and other cryptocurrencies remain niche instruments opposed by rep- resentatives of central banks and large financial institutions. The paper investigates the legitimacy challenge faced by cryptocurrencies, under the assumption that legitimacy is, for the latter, a necessary condition for becoming an alternative to fiat money and a global instrument for exchang- ing and storing value. Legitimacy is the condition of be- ing desirable, proper, or appropriate within some socially constructed system of norms, values and beliefs (Suchman, 1995). Key to legitimacy is justification, the act of providing clear and persuasive accounts of strategy and actions.
Drawing on thematic analysis, consisting of 29 expert in- terviews and 41 online texts, we analyse how this legitimacy challenge is carried out by mapping justifications provided by three competing groups of stakeholders: State and pri- vate institutions (macro), large technology companies (meso), and crypto start-ups, investors and communities (micro). The research questions are the following: Which dynamics best describe the legitimacy challenge faced by cryptocur- rencies? Which justifications do different stakeholders put forward to explain their attitude towards cryptocurrencies?
The choice of focus stems from the assumption that the legitimacy challenge of cryptocurrencies can be described as a ‘symbolic struggle’ (Bourdieu, 1979), where social groups and organisations challenge incumbent, dominant players that try to maintain their position in the field. The pa- per also explains that large technology companies bear the potential for creating successful cryptocurrencies that over- come the legitimacy challenge, by using the global symbolic power of their own brand.
Bourdieu, Pierre. ‘Symbolic Power’. Critique of Anthropology 4, no. 13–14 (1979): 77–85.
Suchman, M. C. (1995). Managing Legitimacy: Strategic and Institutional Approaches. 41.