Why Anthropologists Are More Interested In Bitcoin Than Economists

Why Anthropologists Are More Interested In Bitcoin Than Economists
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Mainstream economists are renowned for bashing on Bitcoin. Anthropologists, on the other hand, are becoming more interested in it. Why?

I am an anthropologist and economist who went down the Bitcoin rabbit hole. I wrote this paper to clarify my thoughts about why these two disciplines respond so differently to Bitcoin.

What Is Anthropology?

Anthropology is a social science that is concerned with understanding culture through participatory observation, or ethnography: cultural immersion in the social worlds being studied. This research method is at the heart of the discipline, and it forces practitioners to “get out there,” to expose themselves, and to experience the culture being studied as a local.

This might explain why anthropologists often end up in heated debates with economists, who instead understand the world through numeric aggregates and abstract models. Mainstream economists take a top-down view of the world based on deductive reasoning stemming from their models and assumptions, which are heavily influenced by classical Newtonian physics and its notion of “equilibrium of the heavenly bodies” and lack the “systems perspective” that emerged from thermodynamics and influenced engineering (Alizart, 2020).

In contrast, anthropology, which involves both deductive and inductive logic, is mostly focused on the latter. Observed and experienced real-life evidence leads to the formation (and recalibration) of theoretical frameworks: first comes the evidence, then comes theory, and so forth (more on this in the Limitations section).

Another key element of anthropology is its concern for the “emic” (people’s subjective beliefs and experiences of the world) above the “etic” (objective truth). So, anthropology takes the view that objective measures such as various economic growth parameters can mean very little when abstracted away from people’s experiences and lived realities. Looking at the emic gives anthropology a superpower: the ability and need to be open to alternative belief systems, challenge its own mental models, take in additional insights, and craft a more nuanced and holistic view of the world as a result.

Anthropologists are not scared of dealing with people’s belief systems because it relativizes them. That means that each culture must be viewed as “a truth” that must be understood as a rational system on its own terms, which is why judging a culture from an external point of view often leads one to miss the point.

In anthropology, emic truth is multiplicitous and relative rather than universal and absolute. What does this mean? “Cultural relativism” doesn’t mean that “2 plus 2 does not equal 4” (these claims by self-proclaimed anthropologists are bogus). It just means that a particular belief system may have come to that conclusion, and that in itself may reveal something about that culture. Anthropologists recognize that math and physics have more adequate tools, languages and frameworks to assess the etic (and to establish that 2 plus 2 does equal 4 — for that we need mathematicians).

Why Are Anthropologists Interested In Bitcoin (And Many Economists Aren’t)?

Anthropology has a long tradition of writing about the alien “other,” and bitcoin certainly represents a new type of exotic “other” for the majority of the world’s population. So, anthropologists have approached the culture of Bitcoin as it would approach any other: with no judgment and with openness to challenge its own preconceptions of it.

Anthropologists have ventured to study the world of bitcoin miners, holders, speculators, and local bitcoin merchants, among others. This has allowed them to understand the communities’ beliefs and points of view by going beyond their own perspectives. Many anthropologists have come out of the studies inspired by the ethos and beliefs of these communities, as I will explain in more depth in the next section.

Source: „The Simpsons“

In contrast, mainstream economists continue looking at Bitcoin from the comfort of their ivory towers. Nobel Prize-winning economist Paul Krugman, Nouriel Rubini, Steve Hanke, and many others have systematically dismissed bitcoin as a bubble, tulip, or speculative asset with little regard to how people actually use and view it today.

Economics as a discipline is locking itself in an echo chamber, siloed from other perspectives and receiving little feedback from the outside. It also lacks the methodological tools to make sense of cultures. No wonder it mistakenly reduces Bitcoin’s meme culture to an irrelevant tribal phenomenon.

But the core of economist’s fallacy is epistemological: what is recognized as truth, and where does truth come from? Does it come from the “top” (meaning the state or god), or the “bottom” (the local popular beliefs)? When it comes to money, who decides what is money (the truth of money)? Mainstream economics lives off the assumption that money is money by “fiat,” meaning that its value is determined by the state’s ultimate judgment and formal decree. In contrast, anthropology, being interested in people’s views and beliefs, has no problem accepting bitcoin as money because ultimately, people believe that it is, and that is how they use it.


At the core of economists’ fallacy is the belief that money is money by decree (because the state and its expert economists say so), which means they don’t fully recognise the power held by people’s collective decisions.

Anthropologists are also interested in Bitcoin because it is not a threat to the discipline’s status quo. Anthropology is mostly a descriptive discipline, concerned with making sense of things as they are rather than “messing with things.” In contrast, economics is all about prescribing and “intervening” in the economy: the economy needs to be “stimulated” and then “stabilized,” and employment needs to be “maximized.” As a result, Bitcoin, which cannot be controlled in terms of monetary policy, massively limits the scope of economics to act on the economy. Bitcoin may well be challenging economists’ core beliefs, and perhaps, their relevance (ouch!). Having said that, this is not true of all of economics. For example, there are heterodox approaches that take more of a systems perspective, such as the Austrian school, which flips the episteme around: truth and economic activity come from the economic actions of the individual rather than the state, the latter of which are not seen as fundamental to economic life.

So, What Are Anthropologists Saying About Bitcoin?

After looking at anthropologists’ foundational methods, theories, and epistemologies, it is worth checking what anthropologists are saying about Bitcoin.

1. Bitcoin is money

Anthropologists have no problems admitting that bitcoin is money, first and foremost “because people call it so, [and] many use it as money” (Kavanagh et al.).

2. Bitcoin leverages people’s ethos

Research on Bitcoin miners has revealed the degree of excitement and creative energy that surrounds the Bitcoin space (Calvão), and it is this ethos and ethic of the Bitcoin community that may infect the world.

3. The values and rituals of the Bitcoin community are important for Bitcoin’s success

A study by Kinney demonstrated that Bitcoin adoption by individuals follows a distinct process: first, adopters discover the value of Bitcoin on their own terms. Next, they reflexively overcome challenges to these initial perceptions of its value. Finally, they reaffirm their embeddedness in the system through rituals of commitment (Kinney), such as today’s “Laser rays to $100,000!” phenomena on Crypto Twitter. This reaffirms the importance of group identity to the social construction of Bitcoin as money.

Thus, the Bitcoin community’s value systems and rituals make bitcoin mature and have helped to establish it as money. As the Bitcoin community has also clarified, Bitcoin is backed not only by technology and numbers, but also by memes.

4. Bitcoin is not just speculation

Anthropologists reject the notion that Bitcoin is just about speculation. Bitcoin is an asset for owners to hold for the long term.

Bitcoin is sustained not only by greed, but also by community, beliefs, and a sense of belonging (Morucci).

„Balinese Cockfights & Bitcoins“

5. Bitcoin is a mirror

The meaning of Bitcoin is “loose enough to mean many things to the members of the community, but specific enough to bind that community together.” The facts that this community is a new type of organism (Quittem) and that bitcoin’s valuation is difficult to establish mean that each person can project the meanings and desires of their choice on them. Bitcoin tells us all what we want to believe, and that is true of both lovers and critics (Kavanagh et al.).

6. Bitcoin is highly political

So, Bitcoin has the ability to create political bodies. It has the ability to project our primitive human passions, even in ways that are destructive to the current political, economic, and social systems (Caldararo).

For example, to the Bitcoin community in cyberspace and offline, hodling is a way of countering state-controlled debasement of the value of money (Morucci). Furthermore, a study of a Bitcoin coffee shop in Slovakia showed how the staff supported the initiation of Bitcoin “newbies.” Bitcoin provided a great degree of power and freedom from the state’s “Big Brother techniques” of control to the coffee shop (Tremcinsky).

Interestingly, others have come to the conclusion that Bitcoin can help us to overcome corporate power entrenchment caused by the centralisation of new technologies, which is currently in the hands of a few tech corporations (Caldararo).

7. Bitcoin is not just dependent on the math and is not entirely “trustless”—its social layer is essential to maintaining it and giving it value

Anthropologists have criticized the Bitcoin community’s belief that Bitcoin is totally trustless and entirely “run by numbers.” According to anthropologists, this would be impossible because we are social creatures, which means that Bitcoin’s sociocultural layer plays an important role in determining whether it has value, and what that value is. The formation of democratic communities in the digital economy remains embedded in social relations. So, the idea that Bitcoin is not mediated by any institution is seen as an illusion (Tylor and Bill Maurer).

A similar stance has been echoed by Giacomo Zucco, who proclaimed the importance of maintaining a puritan Bitcoin-only stance whereby all cryptocurrencies besides Bitcoin are declared “shitcoins” and not worthy of holding.

This further highlights that the “social layer” of the Bitcoin protocol is just as important as the technical one.

8. The nature of money is changing, and Bitcoin will play a critical role in the future

Anthropologists have noticed that, thanks to Bitcoin, serious questions are being raised about the nature of money, which has important implications about society and humanity at large. Even if it fails, Bitcoin is a fascinating “‘breaching experiment’ that helps to reveal how money is implicated in the social order and how particular values and practices come to emerge” (Kavanagh et al.).

In his book “The Social Life of Money,” Dodd wrote that what is considered money has changed through time, and that we are on track to see it change again. Money is becoming increasingly fragmented, and Bitcoin is likely to play a role in the future of money.

Anthropology’s Limitations In Understanding Bitcoin

Anthropology is far from perfect, and it has some challenges as a framework for understanding Bitcoin:

  • Anthropology lacks the quantitative toolkits needed to be able to understand and research on-chain activity, from which one can gain many behavioral insights. We need to push anthropology to be able to understand the technological backbones of our digital world so that it can remain relevant and engage in broader discussions with other disciplines.
  • Anthropology has always been a highly diverse discipline, welcoming perspectives, theories, and approaches from very different viewpoints and other disciplines. However, in the last few decades, it has been undergoing increasing homogenization towards hyper-reflexive, highly theoretical, and overly philosophical schools of thought, which often lose touch with people’s everyday lives.
  • Anthropology lacks a systems view of macroeconomics and does not do enough to understand the basics of the current monetary paradigm. This leads many anthropologists today to view the market as simply dysfunctional and the system as simplistically capitalistic or neoliberal with little awareness of the extensive role that central banks play in economies.

Like the rest of academia, anthropology has no (or little) skin in the game, so not only can it afford to be wrong, but it can continue being wrong and pretending that it is right. Anthropology does not need to be scared to become more applied in praxis, and by doing so, it can grow its methods and frameworks. This is what the hybrid discipline of design anthropology is doing today.


The key takeaway here is that anthropologists have many interesting things to say about Bitcoin. In contrast, economists’ commentaries are often very stale and uninformed.

Anthropologists recognize the important role that Bitcoin is playing in leading us to rethink what money is, which in turn has many consequences for social life. At the same time, anthropologists also recognize that the social dynamics and community surrounding Bitcoin, its memes and the socio-cultural elements of the Bitcoin phenomenon are critical to its success.

Anthropology may not be the best discipline to understand Bitcoin as a whole, but the same can be said about every other discipline on its own. Bitcoin is complex, and to fully understand it would require an understanding of engineering, cryptography, incentives, culture, social psychology, network systems and much more. In other words, it is not a one-discipline job.

The cultural and social aspects of the Bitcoin phenomenon cannot be understated and overlooked, as therein lie answers to many questions (such as the why). Why do people care about Bitcoin? Why should we care about Bitcoin? Well, for many anthropologists, this technology may well be brings money back in the hands of the people.


  • I am aware that the disciplines of anthropology and economics are highly varied and complex, more so than I am picturing here. I am therefore guilty of making generalizations. I do not purport to speak for all economists or anthropologists out there.
  • That said, this article does not aim to be a criticism of economics as a whole, but of its current state: it has lost touch with reality because of its command-and-control approach, top-down methods, models, assumptions, and the lack of a systems perspective.


Thanks to the following thinkers and writers for the invaluable feedback: Martin Tremcinsky, Emil Sandstedt and Paula Magal.

This is a guest post by Michele Morucci. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

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Market Analysis Demonstrates Bitcoin Price Is Nowhere Near Top Of Run

Market Analysis Demonstrates Bitcoin Price Is Nowhere Near Top Of Run
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A deeper dive into bitcoin’s fundamentals and recent market trends shows that the price bull run is nowhere near its top.

Bitcoin has been consolidating around the $1 trillion market capitalization threshold for almost three months, which is a very healthy development during a bitcoin bull market. So, what’s happening behind the scenes, and how should investors be thinking about the recent price action of bitcoin?

Let’s dig in.

BTC price action over the last three months 

Long-Term Trend Still Clear: Bull Market Far From Over

While it is true that at the time of writing BTC is trading at a price it first saw 75 days ago, there is absolutely nothing to be concerned about in terms of the fundamentals and long-term outlook of the monetary asset. Many market spectators have been quick to call it a “top” because of the speculation occurring in the illiquid altcoin markets, but this is a shortsighted take that does not take into account the empirical data. New entrants and capital are entering the market every single day, and the fixed monetary policy of Bitcoin remains consistent.

Long-Term HODLers Are Accumulating

Long-term HODLer net position change in 2021 

The long-term HODLer net position change, which measures the 30-day change in supply held by long-term bitcoin holders, recently flipped positive, and the data from Glassnode shows that over the last 30 days, HODLers have accumulated 93,638 BTC more than they have sold. This shows that the conviction of bitcoiners is not the least bit shaken in regards to the choppy price action, and they are viewing the period of consolidation as a buying opportunity.

Miners Are Accumulating

Not only have long-term HODLers been net accumulating over the last month, but miners are as well. Over the last 30-day period, miners have accumulated a net position of 5,459 BTC, a bullish development as miners are the only natural sellers in the market, since capital expenditure and operational expenses force operations to occasionally liquidate a proportion of their treasuries.

With hash rate lagging far behind price action over the past year, and a global semiconductor shortage occurring simultaneously, expect miners to continue to be net accumulators of BTC, as profit margins remain wide across the industry.

Miner net position change since the May 2020 Halving 

Another fascinating metric to look at is the Puell Multiple, which measures the dollar value of bitcoin issued to miners in relation to its 365-day moving average. The Puell Multiple measures when the market has run too far, too fast.

Obviously, the market value of new bitcoin issued greatly increases in a bull market, and this can be seen not only during the recent run up but also past bull market cycles following the halving. Currently, the Puell Multiple is at 2.5, following the healthy 75-day consolidation. When compared to previous bull markets, a similar pattern occurred around the $100 mark in 2012 and the $3,000 to $4,000 level during 2017. 

Puell Multiple over the history of Bitcoin 

Another promising metric which puts into context the exponential growth occurring around bitcoin and the Bitcoin network is realized market capitalization. Realized market capitalization shows the total market cap of bitcoin, but accounts for the time each UTXO was last moved in the calculation.

This measure can be thought of as a more reliable way to measure the true economic value of the Bitcoin network. Realized cap at the time of writing is sitting at $370 billion, increasing approximately $250 billion since November. To put this move into context, the realized capitalization of bitcoin at the height of the previous bull market was $90 billion. The recent parabolic rise in realized capitalization can be seen as an immense amount of capital flowing onto the network.

Realized capitalization of bitcoin 

A very telling metric when determining how “overheated” the bitcoin price is, MVRV is the ratio between the market capitalization to the realized capitalization. Short-term price fluctuations occur on bitcoin as price is set on the margin, and especially with the growing prevalence of derivatives and leverage in the ecosystem, total market capitalization can see explosive growth when actual capital inflows and economic activity remain somewhat muted. This is not what we are seeing, at all and is a key reason to be bullish at this moment in time.

MVRV Z-Score (market cap minus realized cap) divided by std. (market cap).
MVRV Z-Score, five-month view

The recent pullback in MVRV, or rather the rise in realized cap as market cap consolidates, is a very bullish sign, and should give investors confidence that this bull market has a long way to run.

The Macroeconomic Backdrop Remains Extremely Favorable For Bitcoin 

Total assets of major central banks 
Total assets of major central banks (stacked) 

One of the primary reasons for the surge in interest in Bitcoin over the past 12 months, the macroeconomic backdrop remains extremely favorable, and you shouldn’t expect that to change anytime soon.

Debt loads across the global economic system are at all-time highs, and central banks have painted themselves into a corner in terms of policy optionality. The only thing that markets know is ever-increasing liquidity injections, in what has become almost a competition between nation states and their respective central banks as to which can devalue against all of the others at a faster pace.

While it is true that rates being raised is not out of the question, it would be crippling for a global economy that has become accustomed to negative real rates over the past decade. In a very basic sense, investors should have two distinct intentions in regards to growing and preserving their capital in this macroeconomic environment:

  1. How do I protect against debasement/dilution risk?
  2. How do I protect against counterparty/contagion risk?

The market outcomes that can occur at this point is somewhat binary. Either central banks continue to inject liquidity into financial markets and the risk on everything rally continues, as debt continues to become cheaper in real terms, and the discounted valuations of every asset class skyrocket, or they collectively take away the punchbowl, credit contracts and markets witness a deflationary event similar to what was witnessed in March 2020. While this second possibility may not happen immediately, it is just reality that collectively, the domestic economy (in the U.S.) and the global economy are far too indebted.

In this deflationary scenario, anything with counterparty risk (any asset in the extremely leveraged banking system) is something you should hold with extreme caution. The interconnectedness of financial markets ensures that contagion spreads fast, and the default/credit risk of one market participant is something that should worry everyone.

Without going too much deeper on this matter, bitcoin is the solution to both of these market outcomes. With bitcoin, you are insulated from the record monetary debasement that is occurring in legacy financial markets, but you are also protected from a deflationary scenario in which systematic risk in the banking system does not affect you because of the network’s native self-custody attributes.

Conclusion: Stay Bullish

The fundamentals of bitcoin and the Bitcoin network remain as strong as ever, and in hindsight the shortsightedness of many prominent bitcoin skeptics will prove to again be pure folly. The reasons to be bullish are greater than ever, and one should expect that once bitcoin breaks out of the recent range, the monetary asset will once again be off to the races as global FOMO picks up in ways that have never been witnessed before. 

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The great tech exodus: The Ethereum blockchain is the new San Francisco

The great tech exodus: The Ethereum blockchain is the new San Francisco

The blockchain shift from Ethereum to alternate chains closely resembles the exodus of tech talent from San Francisco to emerging hubs.

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Remember the “Silicon Valley Tech Bubble”? In the early- to mid-2000s, the San Francisco Bay Area gave birth to some of the most storied and successful technology companies the world has ever seen. Facebook, Google, Salesforce, Twitter, Tesla, Lyft — the list itself could take up half of this article. From the palpable energy to the networking potential, one thing was certain: San Francisco was the place to be.

For many, present-day San Francisco has lost its allure. Across the city, the cost of living continues to surge. The remaining inhabitants are cobbling together money to afford the egregiously high rates and are constantly browsing Zillow to see where the grass is greener. Suffice it to say, San Francisco has become unlivable for the working class and is no longer suitable, much less ideal, for many new and existing companies. Although it gave us early tech platforms, the overcrowded, overpriced locale clings to its reputation and the memory of what it once offered.

This isn’t to bash the city of San Francisco but, instead, to highlight the allure of what is becoming San Francisco 2.0: Austin, Texas. The cheaper, sleeker city of Austin is siphoning off a high volume of San Francisco’s best companies and brightest people. Sound familiar? The blockchain community is in the midst of a similar shift.

If you’re a developer, Ethereum was your San Francisco — you had to build there. Ethereum hosts many of the most notable decentralized apps available today and truly outlined the blueprint for smart contract development. Present-day Ethereum looks very different.

Much like the city of San Francisco, Ethereum is becoming far too crowded and far too overpriced to retain its population. The limited scalability is forcing users to explore alternative options to circumvent the excessive gas prices and avoid network congestion. To maintain the analogy: Developers are looking for their Austin, Texas.

In the blockchain ecosystem, the equivalent of Austin can be seen in the likes of similarly attractive chains like Solana, Binance Smart Chain or Polkadot, to name a few. The rise of nonfungible tokens has even brought newer chains, like Flow, to the forefront as an alternative option.

New chain, who dis?

Make no mistake, although NFTs are rising in popularity, decentralized finance remains at the heart of the crypto ecosystem. Among other things, the sustained rise of DeFi brought to light two critical concepts:

  • Decentralized finance will (most likely) attract the most mainstream institutional capital.
  • Ethereum is no longer equipped to handle the scaling decentralized economy.

Related: DeFi-ing the odds: Why DeFi could rebuild trust in financial services

For this reason, alternative chains to Ethereum are receiving more developer attention than ever before. We’ve seen the likes of Polkadot, Moonbeam, Polygon, Binance Smart Chain and Solana not only challenge Ethereum but actually win over developers.

It is possible, perhaps, that instead of completely abandoning Ethereum, developers are simply test-driving these alternative chains. Maybe a developer hasn’t given up their $3,500 per month San Francisco apartment, but they’ve sublet it while renting an Airbnb in Austin.

Related: DeFi users shouldn’t wait idly for Eth2 to hit its stride

Of course, the list does not end here. A multitude of other chains are gaining ground against Ethereum. Similarly, Austin is not the only hot destination; Miami, Denver and Toronto have each opened their arms to Bay Area transplants.

Long-term implications

As more developers flock to new chains in search of respite from high gas prices, it is worth questioning whether this is the new normal or merely an experimental phase.

At this moment in time, it is difficult to predict whether free agent developers are moving to new chains as a temporary means of mitigating gas prices or whether they view these chains as their new long-term homes. One thing we can say with absolute certainty is that alternative chains are threatening the development monopoly held for so long by Ethereum.

Related: Where does the future of DeFi belong: Ethereum or Bitcoin? Experts answer

Among the most telling factors will be the unveiling of Ethereum 2.0. The upgraded solution promises to increase the efficiency and scalability of the Ethereum network — alleviating the most alarming pain points of the blockchain at present.

Related: Ethereum 2.0: Less is more… and more is coming

At the same time, San Francisco had the biggest drop in rent across the country over the past several months, with costs dropping 23% early this year. San Francisco, in its own right, is trying to entice people with its own “2.0” unveiling.

Related: Eth2 is neutral infrastructure for our financial future

One question now haunts both Ethereum and San Francisco: Will it be enough?

Although the number of developers on Ethereum is a bit harder to determine, we’ve already seen the number of newcomers to San Francisco fall by 21%. If this is any indication, Ethereum may be in danger of permanently losing its clientele to alternative chains if it does not address its problem areas in the very near future.

Ethereum and San Francisco have both served as linchpins for development in their respective ecosystems. Their blueprints, in fact, are the basis on which these new and exciting alternatives are being built and modified.

As the blockchain community reshuffles and new apartment tenants unpack boxes, it begs the question: In which blockchain do you reside? Hopefully, one that offers less network traffic, lower gas fees, and can handle an influx of newcomers. If not, it may be time to consider a move.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alex Wearn is the co-founder and CEO of IDEX, a cryptocurrency exchange focused on performance and security. He has spent his career in software development, including time at a marketing analytics startup that was acquired by IBM and as an analytics project manager for Adobe. Prior to IDEX, he led the product management efforts for Amazon Logistics’ capacity planning. He has been working for crypto startups since 2014, transitioning to full-time with the launch of IDEX in 2018.