Algorithmic Authority: The Case of Bitcoin

In this paper, we 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. We use this concept to examine the culture of users of Bitcoin, a crypto-currency and payment platform. Through Bitcoin, we explore what it means to trust in algorithms. Our study utilizes interview and survey data. We found that Bitcoin users prefer algorithmic authority to the authority of conventional institutions, which they see as untrustworthy. However, we argue that Bitcoin users do not have blind faith in algorithms; rather, they acknowledge the need for mediating algorithmic authority with human judgment. We 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.