Sources of Cryptocurrency Value Systems: The Case of Bitcoin

Stephen C. Wingreen, Donncha Kavanagh, Paul John Ennis, and Gianluca Miscione
International Journal of Electronic Commerce,
Volume 24, Number 4, 2020, pp. 474-496.


Cryptocurrencies are a hotly debated topic because it is not clear why they should be valued as they are. Bitcoin, by far the most prominent cryptocurrency, currently trades around $9,500 USD. “Why is Bitcoin valuable?” is a question often heard but seldom answered well. It is not the legal tender of any nation, nor does it represent anything of physical or intrinsic value. Some people attribute its value to its scarcity, others to its anonymity, and others to its immutability, all of which are created and managed by a computer algorithm. Current theories fail to explain Bitcoin’s value, or it is not immediately apparent how they might explain it. We are therefore motivated to investigate the sources of cryptocurrency value through the emergent value systems of the Bitcoin community. We use concourse theory and Q-methodology to discover five types of Bitcoin value systems that are complementary and coexisting facets of a collective whole, each type being its own internally consistent “theory” of value, and therefore our typology avoids simplistic generalizations about cryptocurrencies and the motivations behind those involved. We named the types: Fintech, Libertarians, Purists, Average Joe, and Gentrifier. Of interest, four of the five types we identified appear not to value Bitcoin for its monetary or market value, despite what is usually assumed. Instead, Bitcoin is associated with its potential as an alternative currency that may be used to exchange value, to mitigate various forms of risk, or as a force for social and cultural change. These five types may also underlie broader digital innovation processes and provide a basis from which to understand them.