Download This PaperClimate Change and the Legitimacy of Bitcoin
16 Pages Posted: 14 Nov 2021 Last revised: 31 Jan 2023
Date Written: October 15, 2022
Abstract
This paper examines the dynamics of legitimacy and delegitimisation in relation to distributed ledgers, using Bitcoin mining’s role in climate change as a case study. It finds that legitimacy becomes harder to maintain when moral questions are invoked if Bitcoin is viewed as a single power (the algorithm). However, when Bitcoin is analysed as a self-organising network where multiple actors behave as free agents, then local information comes into play, including Bitcoin’s entanglement with energy markets and infrastructures. These two opposing viewpoints, both of which emerged over the course of 2021-2022, demonstrate the role of discourse and rhetoric in the process of delegitimization, as well as the possible absence of norms related to distributed systems. The outcome for Bitcoin is that regulators in some jurisdictions are imposing constraints on Bitcoin that would not normally be applied to self-organising systems and networks (including markets), and which could be considered as overreach if the distributed nature of Bitcoin was accepted.
Keywords: Bitcoin, energy use, climate change, blockchain, legitimacy
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