Cryptocurrencies and New Spaces of Finance

Despite cryptocurrencies’ (such as Bitcoin) astronomical rise in value and effort to create decentralized financial systems there remains much uncertainty about where they are manifesting and how they are reshaping markets, innovation and investment practices in these places. Building upon the PI’s work on venture financing during the dot.com boom as well as research on information technologies’ integration with the spatial economy, this proposal integrates digital, economic and financial geographies to study the global phenomenon of cryptocurrencies. More specifically this proposal represents the first geographical analysis of emerging practices of currency and exchange and their associated geographies of inputs, regulatory constraints, capital flows and entrepreneurial practice. This research considers both the material contours and ideological underpinnings of these digital cryptocurrencies and uses this foundation to analyze how they connect to and influence markets, financing and firms. The central objective of this proposal is to examine how blockchain cryptocurrencies are reshaping the spaces and practices of financing innovation within tech-based start-up firms . While not denying their volatility and speculative qualities, it is evident that new entrepreneurial practices and spatial patterns of capital investment are emerging from cryptocurrencies. For example, initial coin offerings (ICOs) are a new form of venture financing which changes the scale and scope of investment as well as shifting it to regulatory and tax havens such as the Cayman or British Virgin Islands. By studying the organization of these new financial practices this project provides much need insight on how cryptocurrency engendered changes are affecting the location of economic growth and wealth formation. The central objective of this proposal will be reached by pursuing three research aims focused on analyzing the geographies, networks and practices of cryptocurrencies. Specific Aim 1: We will determine the spatial distribution and integration of core cryptocurrencies functions (blockchain miners, developers, exchanges, ICOs, and regulatory and tax regimes) using advanced data scraping and geolocating methods from GIScience and computer science. Specific Aim 2: We will assess the types of uses and networks associated with cryptocurrencies. by using natural language processing and deep neural networks to conduct a social network analysis of how relations and social capital vary over use case and time. Specific Aim 3: We will determine how cryptocurrencies are affecting entrepreneurial and financing practices within tech-based start-ups through archival research of blockchain documentation as well as interviews with relevant actors.