Algorithmic Authority: The Case of Bitcoin

TL;DR

This paper introduces the concept of algorithmic authority to analyze how Bitcoin users trust algorithms over traditional institutions, highlighting the nuanced relationship between trust, human judgment, and institutional integration.

Contribution

It proposes the novel concept of algorithmic authority and applies it to Bitcoin user culture, revealing trust dynamics and tensions between institutional integration and resistance.

Findings

Bitcoin users prefer algorithmic authority over traditional institutions.

Users acknowledge the importance of human judgment alongside algorithms.

Tensions exist between integration and resistance within the Bitcoin community.

Abstract

In this paper, I propose a new concept for understanding the role of algorithms in daily life: algorithmic authority. Algorithmic authority is the legitimate power of algorithms to direct human action and to impact which information is considered true. I use this concept to examine the culture of users of Bitcoin, a crypto-currency and payment platform. Through Bitcoin, I explore what it means to trust in algorithmic authority. My study of the Bitcoin community utilizes interview and survey data. I found that Bitcoin users prefer algorithmic authority to the authority of conventional institutions which they see as untrustworthy. However, I argue that Bitcoin users do not have blind faith in algorithms; rather, they acknowledge the need for mediating algorithmic authority with human judgment. I examine the tension between members of the Bitcoin community who would prefer to integrate Bitcoin with existing institutions and those who would prefer to resist integration.