Bitcoin and Beyond: Cryptocurrencies, Blockchains and Global Governance by Malcolm Campbell-Verduyn

1 Introduction
 What are blockchains and how are 
they relevant to governance in the 
global political economy?
 Malcolm Campbell- Verduyn
 Imagine having almost instantaneous access to a permanent record of all digital 
transactions undertaken across the world. Without revealing precisely who and 
what is involved in these transactions, this digital database grants you nearly 
real- time overviews of peer- to-peer exchange within and across national borders. 
Such unprecedented capacity to monitor direct Internet- based interaction 
between quasi- anonymous individuals who undertake, verify, and publish 
records of their digital transactions is at the core of promises and fears surround-
ing blockchains. This volume explores governance implications for the actors 
and processes involved in ordering, managing, and organising an increasingly 
digital global political economy arising from growing applications of this set of 
emergent technologies to Bitcoin and beyond.
 At their essence, blockchains are digital sequences of numbers coded into 
computer software that permit the secure exchange, recording, and broadcasting 
of transactions between individual users operating anywhere in the world with 
Internet access. Like most technological changes, the development of block-
chains drew on and combined several existing technologies. Blockchains incorp-
orate digital encryption technologies that mask, to varying degrees, the specific 
content exchanged as well as the identities of individual users. Algorithms, pre- 
coded series of step- by-step instructions, are also mobilised in solving complex 
mathematical equations and arriving at a consensus on the validity of trans-
actions within networks of users. Time- stamping technologies then periodically 
bundle verified transactions into datasets, or ‘blocks’. Linked together sequen-
tially, these ‘blocks’ form ‘chains’ that make up larger ‘blockchain’ databases of 
transactions that broadcast a permanent record of transactions whilst maintaining 
the anonymity of users and specific content exchanged. Blockchains are intended 
to be maintained by all users in manners meant to be immutable, unless users 
arrive at a clear consensus to undertake changes.
 Ledgers of user- verified transactions were envisioned by the science fiction 
writer H.G. Wells (2005) in the 1930s and advocated by ‘cypherpunk’ computer 
hackers seeking to ensure digital privacy as the Internet began evolving later in 
the twentieth century (Jeong, 2013). The technical blueprint for developing 
blockchain technology was originally proposed in a white paper published by 
one Satoshi Nakamoto in 2008. Efforts to identify this individual or group of

 individuals have remained unsuccessful, adding a substantial aura of mystery to 
this information communication technology (ICT).1 The technical design for 
blockchains initially circulated on the cryptography mailing list was quickly 
taken up by an online community of technology enthusiasts, who developed 
Bitcoin as the first time- stamped ledger of user- verified transactions in 2009. Ini-
tially intended to enable the transactions of monetary- like ‘coins’ between users, 
the Bitcoin blockchain was later adapted for the digital exchange, verification, 
and broadcasting of a range of other information. As non- proprietary and open- 
source software, the original Bitcoin ‘protocol’ was replicated in developing 
other blockchains that exchange not only ‘cryptocurrencies’ (CCs), but also a 
much wider range of information on everything from ownership rights and con-
tractual obligations to votes and citizenship.
 Applications of blockchain technologies began being noticed beyond technol-
ogists and technology enthusiasts a half- decade following the publication of 
the 2008 white paper. Attention to Bitcoin in particular exploded in 2013 
because of a confluence of events internal and external to esoteric online ‘crypto-
communities’. Internally, the rise and fall of both the leading ‘exchange’ con-
verting CCs to and from state- backed currencies, Tokyo- based Mt. Gox, as well 
as the infamous online marketplace for illicit goods and services, the Silk Road, 
received widespread media coverage. Primarily negative and sensationalistic, 
this attention alerted citizens, firms, and governments to what appeared as the 
‘new wild west’ surrounding Bitcoin (Singh, 2015). At the same time, a host of 
external events focused more positive attention to the potential benefits of the 
original application of blockchain technologies as alternatives to the widespread 
government and corporate surveillance revealed in the Edward Snowden leaks; 
financial instabilities in the eurozone that included the confiscation of deposits in 
the ‘bailout’ of Cypriot banks; technical glitches at major banks that left cus-
tomers unable to access their savings; and confirmation that controversial central 
bank quantitative easing programmes would be extended well beyond their ori-
ginal intention as emergency responses to the 2007–08 global financial crisis. 
Whether for philosophical, speculative, or security reasons, wider public interest 
in the promises and perils of Bitcoin occurred in a period of unprecedented vola-
tility in the exchange values of the original CC, which rose nearly tenfold from 
just over US$10, only to fall by nearly half and eventually end 2013 at around 
US$750.
 In the wake of this pivotal year, Bitcoin and blockchain technologies became 
increasingly integrated into the very global economic system that their earliest 
developers had explicitly sought to provide alternatives to. Bitcoin became pro-
gressively accepted for a wide variety of transactions in leading online commercial 
marketplaces, such as eBay, in the ‘sharing economy’ of AirBnB and Uber, as well 
as by more traditional retailers, manufacturers, and even by some political parties. 
Beyond merely accepting Bitcoin for transactions, some multinational firms began 
developing their own CCs and integrating blockchains into their operations. The 
world’s largest retailer, Wal- Mart, trialled the technology for enhancing quality 
control over its global food supply chain. Several investment banks and stock

Bitcoin and Beyond: Cryptocurrencies, Blockchains and Global Governance by Malcolm Campbell-Verduyn