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Full Paper for “The First Annual Toronto FinTech Conference”
Chain of Fools? Sensemaking Dynamics regarding the Issue of the Blockchain
Technology in the FinTech Field
Elke Schüßler, Johannes Lehner, Barbara Hartl, Roman Duffner
Johannes Kepler University Linz, Austria
SEPT 2017
WORK IN PROGRESS, PLEASE DO NOT DISTRIBUTE WITHOUT PERMISSION
Abstract
Our aim in this paper is to understand sensemaking dynamics regarding the opportunities and
threats of the blockchain technology in the FinTech field, which we characterize as an interstitial
issue field bringing together a variety of actors and meaning structures. Conceptually, we are
particularly interested in how sensemaking unfolds in a distributed and virtually mediated setting
and with regard to a highly uncertain future. Empirically we conduct a content analysis of one
traditional news source (Financial Times) and two online media (Cryptocoinsnews and Medium)
to identify dominant frames and their usage of different actors in the public debate about the
blockchain. Overall, we identify ten different frames, the majority of them with a positive stance
towards the blockchain, indicating that the field is still far from a common meaning structure and
reflecting a dominance of commentators and journalists in the discourse who tend to stress the
potential of the new technology. We also observe a dominance of past and present rather than
future-oriented metaphors, indicating that while the blockchain is still seen as science fiction by
some, visions of how the world could look like in the “blockchain age” are currently rare.
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Introduction
The blockchain technology, that is the “distributed database for independently verifying the chain
of ownership of artefacts in hash values that result from cryptographic digests” (Norta et al.,
2015), provides for a new way of securing and distributing digital content. Since its first
implementation as the Bitcoin, it triggered a wave of start-ups in the financial sector, largely
fuelled through considerable venture capital and later through the interest of incumbent firms
aiming to apply the technology to virtually all types of content and transactions in economic and
social life. The emerging subfield of FinTech, which revolves around the blockchain technology,
comprises actors from many different industries and professions, including IT-firms, financial
players, industry commentators or venture capitalists. In this sense it can be described as an
interstitial issue field (Furnari, 2014; Zietsma et al., 2017), characterized by diverse actors that
rely on a common technology, but seek to shape and use it in various directions, with the possible
applications and potential implications of the technology still being highly uncertain, ambiguous
and contested. As Vergne and Swain (2017) demonstrated, for instance, even basic building
blocks of FinTech, such as the Bitcoin, are not well understood.
A high ambiguity of interpretations calls for sensemaking (Weick, 1995), understood as “the
process through which people work to understand issues or events that are novel, ambiguous,
confusing, or in some other way violate expectations” (Maitlis and Christianson, 2014: 57).
Sensemaking is typically studied as a process that occurs within organizations (for an overview
see e.g. Hernes and Maitlis, 2010) and is connected to organizational learning, change or
innovation (Maitlis and Christianson, 2014). Here, in constrast, we study sensemaking in the
context of an emerging organizational field at the interstices of several established fields that are
disrupted by the advent of new technology. We hereby build on extant studies that have identified
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sensemaking as a mechanism of field emergence (Anand and Peterson, 2010; Anand and Watson,
2008; Oliver and Montgomery, 2008; Santos and Eisenhardt, 2009). What is unique about our
empirical setting is that, given the high degree of uncertainty around the blockchain technology,
we are able to examine mostly future-oriented sensemaking (Gephart et al., 2010; Kaplan and
Orlikowski, 2013; Wiebe, 2010) and, given the nature of the field, sensemaking that takes place
largely in online fora in a highly distributed fashion (Fisher et al., 2012). Both of these issues are
at the forefront of current debates in the sensemaking literature (Maitlis and Christianson, 2014).
The main question we seek to address is how diverse actors in the FinTec field make sense of the
blockchain technology, including the question about which actors engage as sensegivers
“attempting to influence the sensemaking and meaning construction of others toward a preferred
redefinition of organizational reality” (Gioia and Chittipeddi, 1991: 442). Our empirical findings
based on a content analysis of the debate around the blockchain technology in two online
communities (Cryptocoinsnews, Medium) and one leading international newspaper (Financial
Times), indicate that, in order to make sense of the future, actors on the one hand evoke strong
metaphors from the past when talking about the potential of the blockchain technology, referring
to the gold rush, the Wild West or the industrial revolution. On the other hand, actors use
analogies from other spheres dealing with unknown futures, such as religion/faith, science fiction
or the image of a journey. Yet other metaphors focus on the present functioning of the economy,
such as comparing token payments to fuel, or the blockchain to the Commonwealth or the
Internet.
In the year 2017, the past or future-oriented metaphors were mostly mobilized by consultants,
journalists, bloggers or investors, whereas incumbents or regulators tended to stay focused on the
present, using a more neutral language. Thus, these metaphors clearly serve to legitimize the
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respective actors’ activities and identities in this highly uncertain field (cf. Cornelissen, 2012).
Overall we identified ten different frames in the discourse, two decidedly sceptical, five positive
and euphoric, and three neutral, either not mentioning a position or comprising both positive and
negative positions. The dominance of positive frames reflects the strong presence of consultants,
opinion makers (journalist, bloggers) and investors in the media that we analyzed as these actors
have an interest in announcing the blockhain as “the next big thing”, thereby creating facts rather
than waiting and monitoring.
Our study – which is still work in progress – promises to contribute to the literature on
sensemaking and field configuration in several ways. First, it responds to recent calls to bring the
sensemaking literature closer to institutional theory (Weber and Glynn, 2006; Maitlis and
Christianson, 2014) by indicating how frames and metaphors – as sensemaking tools – are used
to construct meaning in an emerging and highly ambiguous field context. Second, it elaborates on
studies that view sensemaking as a prospective rather than merely a retrospective activity
(Gephart et al., 2010; Kaplan and Orlikowski, 2013). It hereby not only illustrates the mechanism
of future-perfect thinking (Weick, 1995; Suddaby and Foster, 2017), but points to an alternative
tactic that we would describe as past-future thinking in that a part of the discourse relies on well-
known ways of addressing uncertain futures: science fiction and religion. Third, it elaborates on
the mechanisms of distributed sensemaking (Weick 2005) in interstitial issue fields where
interactions not only take place in physical “interstitial spaces” (Furnari, 2014), but also in virtual
spaces.
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Theoretical Framework
The FinTech Field forming around the Blockchain as an Interstitial Issue Field
The field level is an appropriate unit of analysis for understanding the dynamics of major
economic change involving multiple actors and relationships and challenging the boundaries of
existing industries (Davis and Marquis, 2005). In the context of institutional theory,
organizational fields have traditionally been defined as a set of exchange relations among a focal
population of actors (cf. Zietsma et al., 2017), such as “(…) key suppliers, resource and product
consumers, regulatory agencies and other organizations that produce similar services or products”
(DiMaggio and Powell, 1983: 148). The FinTech field forming around the blockchain technology
does not neatly fit into this conceptualization as it involves several fields including the financial
industry, venture capitalists or the technology community behind the blockchain. These actors do
not necessarily have exchange relationships with each other, but rather take each other into
account on a particular issue, namely emerging business opportunities resulting from the
blockchain technology and related threats to existing business models. Hoffman (1999) coined
such fields that consist of highly heterogeneous actors from different populations carrying
distinct logics and identities as “issue fields”. More specifically, following Zietsma et al.’s (2017)
classification, the FinTech field could be described as an “interstitial issue field”, characterized
by high complexity and fragmentation and the absence of stable institutional infrastructures.
Through organizing efforts by actors at interstitial positions (Furnari, 2014) such institutional
infrastructures, which will eventually increase field homogeneity, might emerge.
In issue fields, field membership is defined by participation in debates around a common issue
(Hoffman, 1999). Hoffman’s approach resonates with sociological field conceptions (Bourdieu
and Wacquant, 1992; Fligstein and McAdam, 2011) in that he considers fields as strategically
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shaped by actors competing over issue definition and veering for power positions. This situation
applies to the FinTech field: While there exists a set of common understandings (e.g. “the
blockchain is a disruptive innovation”), associated interpretations, meanings, mean-ends beliefs,
motives and categorizations differ considerably or might be even mutually contradicting, which
has already been shown for the case of bitcoin categorization (Verne and Swain, 2017). The
struggle to resolve such contradictions, thus to reduce ambiguity, simultaneously frames a
struggle for position and power within the field, ultimately surfacing as strategic action exercised
by individual and organizational actors.
While Hoffman (1999) already considers issue fields as highly dynamic because field members
are themselves embedded in different sub-fields, in particular Fligstein’s (e.g. 2013) strategic
action fields approach offers a more detailed account of the actors and their agency underlying
the dynamics of stability and change in fields. Specifically, fields are viewed as fluid arenas (cf.
Furnari, 2016; Fligstein and McAdam, 2012) where interaction between actors is governed by
hierarchies (e.g. incumbents, challengers), coalitions, and rules, which often are derived from
other fields actors are part of, and which are articulated to make “action between more and less
powerful members … more predictable” (Fligstein, 2013: 41). Actors aiming to influence fields
need to act strategically, which for Fligstein (2001) means securing the cooperation of others by
reading people and environments, framing lines of action, and mobilizing people in line with
these frames. In a newly emerging interstitial issue field, power structures are not yet tangible, as
field members come from multiple other fields and “no one field is likely to dominate discussions
on the issue” at stake (Zietsma et al., 2017: 25). Rather, individual actors switch between
different domains thereby activating and deactivating social ties and stories for creating meaning
and, at the same time, keep many possible evolutions possible (Fontdevila, Opazo, and White,
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2011). Over time, more tangible field infrastructures such as dominant coalitions, strategic
alliances, a common identity or common meaning structures may emerge.
Sensemaking in Fields
Innovations in general and especially those in the digital domain, such as in the early days of the
internet, with its potential for digital business, of virtual worlds (Berente et al., 2011) and the use
of big data (Calvard, 2016), introduce high levels of ambiguity, lacking clear value a priori and
diverging into multiple paths of interpretation. For example Berente et al. (2011) identified 12
patterns of argumentation in reflections on the value of virtual worlds, largely anchored by
comparisons with familiar phenomena, by referring to stories from own or other experiences. A
lack of reduction to a more broadly agreed set of meanings of a new technology might cause its
failure (and might explain the loss of interest in virtual worlds, such as Second Life). On the other
hand, as the above cited observations of field dynamics suggest, some level of ambiguity might
be necessary to keep open the possibility of different evolution paths. In the semiconductor
industry, for instance, SEMATECH and other industry consortia are arenas of collective agency
geared towards reducing some, but not all of the technological uncertainty in shaping the
industry’s future path (Sydow et al., 2012) .
Sensemaking often occurs in relation to events (crisis, disasters, encounters with novel
circumstances) which threaten existing meanings (Weick, 1993). Such events can occur in
emerging (Oliver and Montgomery, 2008) as well as mature fields (Anand and Peterson, 2000).
In the digital domain, innovation materializes around code, software platforms, and prototypes
for applications, sometimes supplemented through whitepapers, produced by individuals and
teams which are frequently dispersed around the globe. Such material objects enable the
transition from individual to collective sensemaking (e.g. Stigliani and Ravasi, 2012) if they
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fulfill conditions of coherence, derived in consistent coordination practices (Seidel and
O’Mahony, 2014). Multiple, competing representations (e.g. in programming languages,
platforms), however, may increase ambiguity, expressed in misunderstandings, conflicts and a
lack of standardization. The sensemaking perspective, with its focus on ambiguity, critical
episodes, and the use of metaphors as resources for sensemaking thus seems to be a useful
complement to capture the dynamics unfolding in the FinTech field, particularly regarding the
use of the blockchain technology.
Given the globally dispersed nature of many interactions in this emerging interstitial issue field,
textual rather than non-verbal means of sensemaking and sensegiving are likely to predominate.
Thus, we study sensemaking primarily as a “discursive processes of constructing and interpreting
the social world” (Gephart, 1993: 1485). In order to construct intersubjective meaning, actors
engaged in sensemaking often use narratives and metaphors (for an overview see Matilis and
Christianson, 2014: 81). Narratives are a powerful resource for defining individual and collective
identities. Typically, actors in different power positions mobilize different narratives which more
often than not conflict and overlap rather than converge in an organizational setting (e.g. Currie
and Brown, 2003; for the field context see Hardy and Maguire, 2010). Metaphors are a
“rhetorical device that connects cues and frames” (Matilis and Christianson, 2014: 83) which is
the central mechanism of sensemaking (Weick, 1995). Like narratives, metaphors help in
constructing actors’ identities, legitimize certain activities, and shape collective meanings.
Frames hereby act as cognitive schemas that guide interpretations and actions, whereas specific
words may provide cues for triggering a particular frame (Cornelissen et al., 2014). In short,
frames serve to organize experience and guide action (Benford and Snow, 2000; cited in
Cornelissen et al., 2014). Common frames are typically established in a step-by-step manner.
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While commitment to a common frame is necessary to support collective action, a lack of
openness to alternative framings can lead to sensemaking failure (e.g. Weick, 1993; Whiteman
and Cooper, 2011), especially in situations of pressure (Cornelissen et al., 2014; Cornelissen,
2012). Metaphors are particularly useful in situations where common frames of reference are
absent, such as in novel or dynamic industries. Cornelissen and Clarke (2010), for instance, show
how the use of metaphors in both speech and gestures to frame novel ventures in terms of
familiar frames and thereby reduce uncertainty and create legitimacy. Metaphors can be defined
as “figurative language that represents one thing in terms of another” (Cornelissen and Clarke,
2010: 2015) and metaphors, like frames, help to organize thoughts and experiences and “make
the unfamiliar familiar” (Lounsbury and Glynn, 2001: 549; see Cornelissen, 2005 for an
overview).
A core feature of the sensemaking process is its retrospective nature: After events have
materialized and after actions have been completed, individuals bracket, label and interpret their
experiences and draw conclusions for further action. This notion, however, has recently been
challenged and expanded (see for reviews Maitlis and Christianson, 2014 and Sandberg and
Tsoukas, 2015) to include potentially future-oriented sensemaking for anticipated action in an
unknown future. In fact, Weick's (1979) observation that future action is thought of in "future-
perfect" tense, as if already finished, contains this orientation towards a future state already,
while still resting on the retrospection of actual previous experiences. With few exceptions
(Gephart et al., 2010; Kaplan and Orlikowski, 2013; Wiebe, 2010), sensemaking research to date
lacks an account of the interplay of past, present, and future temporal lenses (Maitlis and
Christianson, 2014). Moreover, the type of metaphors and frames used in sensemaking – from the
past or from the desired future, for instance – as well as their sources (own, vicarious
experiences, fictional) might influence the outcomes of sensemaking process in systematic ways
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and are not well understood. Especially in contexts where potential future states are unclear,
highly ambiguous or contested, future-perfect thinking might be able to adequately capture
sensemaking dynamics (Stigliani and Ravasi, 2012). The research context of the blockchain
technology with its highly uncertain nature allows us to empirically examine these questions.
Methods
Research Site
The technological core of the blockchain is developed in small teams of software developers
working in start-ups, consortia, and incumbent organizations. As these individuals and teams
work simultaneously and largely independently, the resulting code, software prototypes, and
white papers produce a high level of diverging meanings. Sensemaking at the interstices of
several fields thus depends on the existence of spaces for interaction and debate. Such spaces can
be informal places for microinteractions of individuals, so-called interstitial spaces (Furnari,
2014), or more formally organized field-configuring events where both individual and
organizational actors meet to exchange ideas and shape field structures (Lampel and Meyer,
2008). Spaces for interaction and debate can also be of a virtual nature, and especially in fields
that are strongly driven by digital technology online blogs, social media and virtual discussion
rooms (such as reddit, bitcointalk.org) or web repositories (GitHub) are relevant intersection
points for a diversity of actors. Lastly, of course, standard media are an important discursive
space where actors engage in framing and sensemaking activities (Meyer and Höllerer, 2010).
Table 1 provides an overview of key actors that appear in the public debate and attend
blockchain-related events which we have summarized based on our general knowledge of the
field.
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Table 1: Actors in the FinTech Field forming around the Blockchain
Actor Dominant
Background
(Originating Field)
Motivation Identity / Ideology
Regulators, Politicians Administration, Law Control Bureaucracy, Politics
Incumbent Firms, especially
Banks and IT Corporations. Finance, IT Position Tradition
Cryptocurrency Start-ups,
other Start-ups IT Creation
Anarchic, with merit-
based status
Venture Capitalists Investment,
Entrepreneurship
Return (Neo-)liberal
Commentators, Evangelists,
Authors Journalism,
Research
Attention – (heterogeneous)
Data Collection
Our data collection focuses on such interstitial spaces in the physical and virtual realm. The time
window included in our analysis starts with January 2014 when the first proposal for the
application of the blockchain technology beyond bitcoin has been issued in the mainstream media
(Marc Andreessen: Why blockchain matters, in New York Times) and ends with the beginning of
2017. In a first step of our research we draw on three data sources which can be reliably traced
back to 2014 and which address a general FinTech audience: the Financial Times (FT) as a major
printed newspaper, Medium as a central online forum where experts make sense of technological
and societal developments, and the online news portal Cryptocoinsnews (CCN) which has its own
section on the blockchain.
We chose these different media because each represents a different forum for sensemaking,
potentially attracting different actors and accompanied by different sensemaking dynamics. We
restricted our data analysis to “globally consumed” rather than specific national outlets, although
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of course boundaries in this regard cannot clearly be drawn. We are considering broadening our
database in further iterations of our study. The Financial Times is a London-based classic
journalistic medium, available both in print and digitally, with a strong influence on public
perceptions through its legitimized role in defining frames and meaning structures regarding
economic issues. Cryptocoinsnews, in contrast, is a digital newspaper founded in 2013 and
entirely dedicated to the FinTech topic. CCN is often cited by other newspapers, thus indicating
that it is accepted as a reliable source regarding FinTec issues. In 2014, it was edited by Chaleb
Chen, presumably a person that describes himself as a “Privacy and Digital Currency Advocate”
on LinkedIn, with the aim of presenting news about Bitcoin and the Blockchain technology “with
more relevance and accuracy” than mainstream media (CCN Website). This uncertainty about
identities is common in the blockchain community, referring back to Satoshi Nakomoto, the
unknown person(s) behind bitcoin, and practically illustrating the basic idea of the blockchain as
a quasi-anonymous chain of digital transactions. As a case in point, CCN is currently listed as
belonging to a Norwegian electronics store that does not have its own website. Not everyone can
write for CCN, as it is a closed platform, but it is more open to a diversity of writers than
incumbent media sources. Finally, Medium is a blog-based news site on which everyone can post
an entry without an intermediary editor. We found that many start-ups acted as authors of entries
on Medium. Thus, the three media assemble somewhat different authors and have different
discursive mechanisms, therefore allow us to identify different meanings in this emerging field.
We complement our data collection by attending several “face-2-face” events where debates
about the blockchain technology in different industry contexts take place. In July 2016, one of us
attended the KPMG Innovation Showcase event with the topic "Blockchain" in Berlin
(Germany). In November 2016, one of us attended a symposium on Blockchain Applications for
Public Administration at the University of Speyer (Germany). In December 2016, one of us
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attended a NET-WORK event with the topic Blockchain in Vienna (Austria). In February 2017,
the Event Horizon took place in Vienna as the first global summit on blockchain technology in
the energy sector. The event was attended by blockchain experts, decision makers from the IT
and energy sector, start-ups, well established energy companies and government representatives,
all of them discussing the future of blockchain and its impact on the energy sector. In March
2017 we attended the panel discussion The Blockchained Music Business - Opportunities and
Challenges and in September 2017 we participated at the Music Bussiness Reasearch Days
conference with the topic of “Unchaining the Music Business”, both held at the University of
Music and Performing Arts in Vienna. These events brought together developers, experts, music
mangers, lawyers and scientists from around the world discussing developments, opportunities,
troubles and illusions of the technology for the music industry. We use our insights gained at
these events as background information for our analysis.
Selection Process
To identify relevant articles, discussing the blockchain technology in the emerging subfield of
FinTech, we carried out a two-step selection process: First, all articles in FT, CCN, and Medium
containing the keyword “blockchain” were identified, using the provided search function of the
corresponding website. This first step is relevant to ensure that the final database consists only of
articles referring to the disruptive technology for the financial sector, the blockchain, and not just
single applications (e.g., Bitcoins). For the time period between January 2013 and June 2017, we
identified 608 articles including the term “blockchain”, more than half of which were published
in CCN (Table 2). Although this data depicts only a tiny part of the online debate regarding the
blockchain, it points to several aspects of the medial awareness: the attention seems to have been
growing slowly until 2016, with the established Financial Times not reporting about the
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blockchain technology before 2015. In 2016 the attention increased tremendously, reflected in
our database as the total number of articles and blog-entries writing about the blockchain
eightfold compared to 2015. This trend seems to continue in 2017, as just as many articles were
published by June in 2017 as in the whole previous year.
Table 2: Search results for “blockchain”
Number of articles/ medium /year FT CCN Medium Total
2013 2 2 4
2014 31 31
2015 21 13 1 35
2016 86 194 3 283
2017 24 102 129 255
Total 131 342 135 608
To identify all articles concerning the financial sector we conducted a second step in the selection
process, searching for the keyword “FinTech” in CCN and Medium in the current dataset. In this
second selection step, we excluded the Financial Times, as the newspaper itself addresses the
world of finance. Using the keyword “FinTech” enables us to picture the discourse about
blockchain in the FinTech field, as it is the technical term for current (disruptive) technological
developments in the financial industry. After this second selection step, 258 articles were found
in total, of which half were published in the FT (Table 3). Overall, the trend concerning the
increased attention for the blockchain technology described above is as well reflected in the
FinTech field, with minor deviations. In our database no article using the terms “blockchain” and
“FinTech” was found before 2014, and in 2014, only CCN referred to them in just four articles.
At the blogging platform Medium there were no blogs published until 2016 using both keywords.
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This may be due to the fact that people publishing entries on this platform are less aware of the
technical term “FinTech”, which, according to Google Trends, has received increased attention
only since the beginning of 2015.
For 2017, our database comprises 96 articles. More than half of the issued articles (54) are
released at CCN. In the Financial Times we could find 24 articles dealing with the blockchain
issue and on Medium only 18 article were blogged. The rather small number of articles at
Medium may be a result of the competition with other internet platforms, like CCN, which pay
for publications and of the presence of other, more interactive digital platforms. Finally, looking
at the development over time, we have to point to the dropping numbers of articles published in
the Financial Times using the keyword “blockchain”. For 2017 (until June), we collected 24
articles, which is less than a quarter of the published article in 2016. So it is questionable whether
the trend of increased attention will continue in 2017. The outstanding number of articles in 2016
may represent a peak of expectations and promises shared by the established newspaper, which
now, in 2017, waits for the realization of these visions.
Table 3: Database, search Results for “blockchain” and “FinTech”
Number of articles /medium /year FT CCN Medium Total
2014 4 4
2015 21 5 26
2016 86 44 2 132
2017 24 54 18 96
Total 131 107 20 258
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Data Analysis to Date
Our data analysis to date, for which we used the content analysis software MaxQDA, has focused
on identifying dominant frames in the three media based on a qualitative content analysis. As it is
common in other studies on field emergence or transformation (e.g. Dobusch and Schüßler, 2014;
Oliver and Montgomery, 2008) we focused on two dimensions: the dimension of actors, their
motivations, identities, coalitions and field positions, and the dimension of meanings, particularly
the topics raised by actors and the frames they applied. To capture sensemaking dynamics, we
payed particular attention to the use of metaphors and cues that act as triggers for sensemaking.
Specifically, we proceeded as follows. In line with a grounded theory approach (Glaser and
Strauss, 1967) we started out with developing first-order codes close to the data in order to get a
first glimpse of the occurring themes (Gioia et al., 2012). We approached this task largely
inductive while being informed by broad conceptual categories derived from the sensemaking
literature and previous frame analyses (esp. Benford and Snow, 2000). Thus, we paid attention to
problem or topic definitions (hinting at diagnostic frames) and, conversely, to passaged
recommending lines of action (hinting at prognostic frames). In addition we looked for cues,
metaphors, for attention to materialities (reference to technologies, white papers etc.), and for key
events. This process was complemented by a coding of time and actors, which we divided into
cited actors, i.e. actors that were mentioned in the texts, and authors of the respective articles. We
later grouped these actors into the broad actor categories summarized in Table 1. As a final step,
we derived frames from all three media sources followingan inductive approach, thereby
combining the identified codes into frames. We plan to complement this qualitative content
analysis with a quantitative correspondence analysis in a second step to identify how actors and
issues connect over time.
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Results
Our analysis so far maps the landscape of the interstitial issue field forming around the use of the
blockchain for the financial industry in the year 2017. In the following we outline our first results
as part of our ongoing inquiry regarding the frames used for sensemaking and the ways in which
different actors relate to and mobilize these frames in different media. We start with a description
of the frames of the blockchain debate in the FinTech field. Then we discuss the use of frames in
the three media sources, the relation of frames and relevant actors and the most important cues
for sensemaking.
Dominant Frames used for Sensemaking
Overall, we identified ten different frames that were mobilized in our sources in the year 2017.
Two of these frames were negative/skeptical, five positive/euphoric and three neutral, comprising
positive, negative, and neutral positions, which do not make an assessment (see Table 4 for an
overview).
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Table 4: Overview Frames
Frame Position Frequency/
Sources Metaphors Key quotes
Restraint Neutral; message: there
probably are possibilities
and advantages but it is too
early to say what these are
12
*10 (CCN)
*2 (FT)
- Due to the rapidly progressing digitisation in the financial sector, in particular in
the blockchain area, it can be assumed that business models will develop which are
not yet conceivable today. (CCN, Feb 2, 2017)
Hype Neutral; message: there are
huge business opportunities
but also risks
37
*22 (CCN)
*4 (M)
*11 (FT)
Goldrush, railway
mania
In the spirit of selling shovels to prospectors in any good gold rush, however, there
are already a growing number of outfits promising specialist consulting and
advisory services on all aspects of ICOs to both investors and potential issuers. (FT,
May 25, 2017)
Safeguarding Neutral; message: regulation
and control are needed to
provide a safe investment
environment and prevent
abuse
25
*11 (CCN)
*3 (M)
*11 (FT)
Trouble shooting In particular, the panel appears to be of the view that innovation needs to be given
room to grow, but at the same time risk needs to be managed. Moreover, while
blockchain based innovation may increase risk, it also increases transparency.
(CCN, April, 20, 2017)
Exploration and
discovery
Positive; message: the
technology is become more
accepted and more widely
used
24
*12 (CCN)
*3 (M)
*9 (FT)
Journey From banking to real estate, to the music industry and the airline industry, to
healthcare and education, the blockchain is becoming widely accepted around the
world. (CCN, Jan 1, 2017)
We are on a new digital journey, and no — there is no turning back! (Medium, Jun
2, 2017)
Competition
and business
opportunities
Mostly positive; message:
different actors establish
new networks and business
models veering for a
leadership position
34
*20 (CCN)
*2(M)
*12 (FT)
Sandbox Within the Sandbox, banks can try out their new Fintech products without the need
to achieve full compliance with the HKMA’s usual supervisory requirements.
(CCN, Sep 9, 2016)
With growing interest in blockchain technology and increased funding in the
FinTech sector, Australia is demonstrating the potential impact it could present to
leading countries such as London and Singapore by removing them from the top
spots. (CCN, Jan 13. 2017)
Revolution Positive; message:
blockchain will change
everything in unseen ways
40
*24 (CCN)
*5 (M)
*11 (FT)
Flying cars;
industrial
revolution;
analogy to
Internet
Taken all together, a Thiel run for the Governorship would re-energize the
millennial generation by returning a vision of a better and futuristic tomorrow,
symbolized by the 80’s dreams of flying cars and, more concretely, bullet speed
trains that go at 500 km/h. Thiel stated:“I think a lot of people want to go back to a
past that was futuristic — ‘The Jetsons,’ ‘Star Trek.’ They’re dated but futuristic.”
(CCN, Jan 15, 2017)
Efficiency Positive; message: the
blockchain will increase
23
*5 (CCN)
Machine No rent-seeking, no abuses of power, no politics — blockchain technologies can be
used to create “math-based money” and “unstoppable” contracts that are enforced
19
productivity, usability,
automatization etc.
*6 (M)
*12 (FT)
with the impartiality of a machine instead of the imperfect and capricious human
bureaucracy of a state or a bank. This is why so many people are so excited about
blockchain: its supposed ability change economic organization in a way that
transforms dominant relationships of power. (FT Alphaville, Jun 14, 2017)
Empowerment Positive; message:
blockchain will eliminate
intermediaries and create
more equal and just
exchanges in the global
economy
33
*12 (CCN)
*9 (M)
*12 (FT)
Commonwealth,
free speech
Most of the developing countries by and large lack day-to-day financial services to
the point where one can say the banking sector is as good as non-existent. Many,
therefore, are suggesting that like the invention of cell phones, the development of
the Internet and blockchain technology will likely allow developing countries to
bypass the banking sector and leapfrog their economies. (CCN, 2016 Aug 17, 2017)
At its heart, a decentralized search on a decentralized network is all about free
speech, and the free flow of information. (Medium, Jun 5, 2017)
Doubt Negative; message: the
blockchain will not work as
intended and the benefits are
overrated
20
*10 (CCN)
*10 (FT)
Religion Doing all of that on separate blockchains, instead of separate databases, might be a
technology upgrade (or a bunch of technology upgrades), but it is not a revolution.
(FT, Feb 28. 2017)
For the most part, the question that really needs asking is this: What sort of
legitimate organisation really benefits from a decentralised or headless state? Also,
what sort of company benefits from decentralised funding options or from
providing decentralised services? The answer is almost none. (FT Alphaville, Jun 1,
2017)
Like Catholicism, as described by comedy priest Father Ted, the wonderful thing
about blockchain technology is that’s all terribly vague and no one really
understands it. (FT, 3.12.2015)
Anything goes Mostly negative; message:
no regulation, no control;
less state, right of the
strongest; criminality
observable
12
*7 (CCN)
*1 (M)
*4 (FT)
Wild West;
anarchy
The ICO space is currently a bit of a wild west and in a state of flux as well as
confusion. On the wild west aspect, there are hardly any quality checks, verifiably
independent audits, etc. There are so many of them that few receive even a prima
facie look by journalists. Sometimes, even when they do get their attention, the
project developers might fail to respond to any probing questions. (CCN, Apr 20,
2017)
‘Tokens’ have preexisted blockchain by decades, and are in widespread use in
incumbent data systems. The only new ‘development’ that is causing the rise in
these platforms, is the lack of SEC action in response to increasingly aggressive
fundraiser claims. (FT Alphaville, Jun 1, 2017)
20
We identified three neutral frames: “Restraint”, “Hype”, and “Safeguarding”. In all these frames,
blockchain is generally discussed as a rapidly growing and developing technology whose future
developments cannot be foreseen at this point. “Restraint” refers to the blockchain technology as
premature and highlights the inability to predict or anticipate the next steps in the FinTech field.
“Hype” is specifically referring to opportunities and risks for businesses, observing euphoria of
founding and investing in new businesses, accompanied by greed and expressing a fear that such
enthusiasm may end in the realisation that blockchain is a bubble. “Safeguarding” views the
technology from the point of security issues, discussing blockchain on the one hand as a mean to
make the financial world safer, while calling on the other hand for regulation and restrictions to
keep the technology under control and prevent corruption.
The five more explicitly positive frames we identified were “Exploration and discovery”,
“Revolution”, “Efficiency”, “Empowerment” and “Competition and business opportunities”. In
these frames, the blockchain technology is described as a journey or as a technology under
development that is taken more seriously now and is getting attention. Though positive,
“Exploration and discovery” refers to a less enthusiastic view of the technology than
“Revolution”. With the latter, blockchain is described as a disruptive technology which will
challenge and change not only the financial sector, but the economy or even the world as we
know it. The development of the technology is compared to the industrial revolution or the
revolutionary changes due to the internet. “Exploration and discovery”, in comparison, is often
explicitly positioned as a counter-frame to the “Restraint” argument, for example:
“It’s not just the industry that’s excited about blockchain — it’s the world, everyone.
Even at Davos, every single tech panel I have gone to mentions blockchain and some
people call it ‘the second coming.’ But while we think it’s very interesting, we don’t want
21
to, and no one wants to, be blindsided by rushing into it [as the technology is still
developing].” (Representative of MasterCard, cited in CCN, Jan 22, 2016)
The perception of blockchain as an ideal tool to increase productivity, profitability, and speed is
represented by the frame “Efficiency”. “Empowerment” focuses on blockchain as a decentralized
technology which reduces people’s dependencies on powerful intermediaries, fosters
transparency and enables a free flow of information. Blockchain as a fertile ground for new
business models and business opportunities, resulting in cooperation as well as competition, is
represented by the frame “Competition and business opportunities”, which mainly contains
positive messages.
Finally, two explicitly negative frames were identified: ”Doubt” and “Anything goes”. “Doubt”
expresses skepticism about the benefits of the technology and claims that the technology is
difficult to put in practice, bears no link to needs in reality or is even inferior to conventional
technologies. “Anything goes” makes use of a “wild west” metaphor, pointing out a lack of
regulation and control which results in the right of the strongest and anarchy.
Occurrence of Frames in Different Media
Comparing the relative frequency of the ten identified frames in three media sources (CCN,
Medium, FT) shows that overall, as well as in CCN, “Revolution”, “Hype”, and “Competition”
are the three most dominant frames. In contrast, the discourse in FT can be characterized by
expressions of “Efficiency”, “Empowerment”, “Competition”, as well as “Doubt”. Medium,
which in 2017 is represented by a rather small number of articles, is clearly dominated by the
frame “Empowerment”. Notably, the frames “Restraint” and “Doubt” are not used at all in
articles in Medium. These differences reflect the author- and readership of the different media,
with the FT clearly representing the business side interested in things like competition and
22
efficiency and Medium representing various kinds of commentators and users who are
enthusiastic about the blockchain as a “democratizing” device.
Table 5. Frames’ frequencies in the three media sources
(number of documents which contain the frame in relation to total number of documents)
CCN M FT All
Restraint 18.52% - 8.33%
12.50%
Hype 40.74% 22.22% 45.83%
38.54%
Safeguarding 20.37% 16.67% 45.83% 26.04%
Exploration and
discovery
22.22% 16.67% 37.50% 25.00%
Competition and
business
opportunities
37.04% 11.11% 50.00% 35.42%
Revolution 44.44% 27.78% 45.83%
41.67%
Efficiency 9.26% 33.33% 50.00%
34.38%
Empowerment 22.22% 50.00% 50.00% 34.38%
Doubt 18.52% - 41.67%
20.83%
Anything goes 12.96% 5.56% 16.67% 12.50%
Dominant Frames Used by Actors
Among commentators (and venture capitalists, who are, however, not strongly represented in the
present database) the ten identified frames are distributed rather equally, largely dependent on the
individual commentator’s position in regard to blockchain. In contrast, regulators, start-ups, and
incumbents are clearly characterized by dominant frames. Moreover they use these frames in
specific ways, which will be described in the following.
23
Dominant frames used by regulators, who are quoted only indirectly in the debate, are
“Restraint” and, somewhat unexpectedly, “Competition and Business Opportunities”, with the
first suggesting a rather passive stance and the second a pro-active trial-and-error approach to
regulation. While developers sometimes call for more direction through regulation (preferably,
however, by non-government bodies), regulators view the developments as „premature“, taking a
„neutral position“, avoiding too much restriction in regard to potential future developments. As
the following citations show, restraint is often an expression of a lack of understanding the
technology.
“Ms Yellen also noted that blockchain – the shared database system that underpins bitcoin
– is an important technology that the Fed is looking at ‘in terms of its promise in some of
the technologies that we use ourselves’.” (FT, Jan, 18, 2017)
“The European Commission has said that it is actively monitoring blockchain and DLT
developments, stating that its almost limitless potential use cases make it both ‘very
promising and challenging.’” (CCN, Feb, 16, 2017)
Furthermore, while the need for regulation is acknowledged, restraint is also grounded in high
ambiguity regarding the stage of development which will trigger regulation.
“(…) appears to be of the view that innovation needs to be given room to grow, but at the
same time risk needs to be managed” (CCN, April, 20, 2017, reported summary of an
IMF panel meeting)
“Due to the rapidly progressing digitisation in the financial sector, in particular in the
blockchain area, it can be assumed that business models will develop which are not yet
conceivable today. The Federal Council will follow these developments closely also in the
24
future and will swiftly propose the necessary regulatory adjustments if required” (CCN,
Feb, 2, 2017)
Concerns about safety, often expressed in terms of the “Safeguarding” frame, are considered as a
main factor influencing competition, particularly between nations, regarding developments and
start-ups. For example, US, Australia, Britain and Europe in general are referenced as rather
favourable environments, in contrast to China and Norway (for the case of Bitcoin). Thus,
regulators discuss a trade-off between too much regulation too early, potentially killing initiatives
and scaring away investments and start-ups, and too little regulation, leaving players in an
institutional void without direction.
“Yet, through regulators such as the U.K.’s Financial Conduct Authority, which works by
providing businesses with the regulations they need to abide by, it is somewhat easier for
FinTech startups to get their businesses off the ground in a difficult environment.”(CCN,
Feb, 16, 2017)
The metaphor of a (regulatory or supervisory) “sandbox”, hinting at the playful, experimental
character of regulation in this field, is used to describe an environment where regulatory regimes
are tested with regard to their potential of enabling and facilitating developments through giving
some guidance. Such “sandboxes” include regulatory agencies and start-ups which represent
rather contradicting identities.
“This has also been highlighted by the fact that the U.K.’s Financial Conduct Authority
(FCA) revealed, in November, the first 24 companies that will be taking part in its
FinTech regulatory sandbox. By doing so, it is hoped that more businesses will establish
themselves in the U.K. and know what regulations they are required to abide by.” (CNN,
Jan. 11, 2017)
25
Unlike for regulators who use the “Competition and Business Opportunities” frame usually with
reference to their region or nation, incumbents use this frame regarding their individual
businesses and industries. Incumbents hereby have two main messages: the need to set standards
and, thereby, control the development; and fears of losing power during radical changes, which
are beyond their control. The importance of setting standards is expressed through references to
the need of a “killer app”:
“As we have written previously, a killer app is likely to emerge in concentrated markets: a
market with concentrated leaders could more easily set up standards and governance
protocols and have less issues aligning incentives and sharing costs.” (Morgan Stanley
cited in FT, June 14, 2017)
This comes with a focus on establishing cooperation, e.g. in the form of consortia (R3), not only
to lead future developments but also to establish technological standards:
“R3 is an interesting way of doing that because it brings several interested parties together
to experiment with underlying tech. It’s a good opportunity for the banks and there’s more
chance of block chain technology succeeding as a group than disparate parties.”
MasterCard Chief Innovation Officer Garry Lyons, cited in CCN, Jan 22, 2016)
While competition is predominantly expressed in a positive fashion, it surfaces also as fear of
losing power.
“… according to the deputy governor of the Reserve Bank of India, banks need to be
aware that they run the risk of becoming history if they don’t maintain the pace in the age
of FinTech.” (CCN, Feb 23, 2017)
26
Rather than hoping for revolutionary changes, incumbents express their need to embrace and
consolidated developments to be part of a “smooth evolution to tomorrow’s financial system”
(Bank of Canada, cited in CCN, Feb. 3, 2017). Warnings are expressed:
“’Consolidation will be done by those who have mastered technology,’ says Mr González.
‘If you don’t master technology you won’t survive.’” (Francisco González, chairman of
Spain’s BBVA, cited in FT, Jan. 17, 2017)
Part of this debate is a discussion about the public vs. private technological basis of the
blockchain and the transition in nomenclature from blockchain to distributed ledger technology
(DLT). Again, while public blockchains, as they are used for cryptocurrencies such as bitcoin and
ether, represent rather revolutionary developments, incumbents refer to private or permissioned
distributed ledgers, which promise smooth transitions from traditional databases and from the
incumbents’ roles as intermediaries to new functions:
“Almost two dozen of the world’s largest banks, including JPMorgan, UBS and Barclays,
have thrown their weight behind R3 CEV, a start-up venture, to set up a private
blockchain open only to invited participants who between them maintain and run the
network. It forms part of an effort to build an industry-wide platform to standardise use of
the technology.” (FT, Sep 1, 2015)
“Not one bank nor policymaker that we have met with on blockchain gives even a second
thought to an unpermissioned public network,” (Huw van Steenis, an analyst at Morgan
Stanley, cited in FT, Sep 26, 2016)
Clearly contrasting incumbents, but similarly reflecting actors’ identity, “Revolution” is the
dominant frame used by Startups in this field. Revolution is often expressed as hope and reflects
27
sensemaking through “future perfect thinking” (Weick, 1979), for example by drawing analogies
to the development of the internet, for example:
“(…) this space will take a long time to develop (like the Internet), and we will see a
power law outcome (many failures with a few huge home run winners)” (Muneeb Ali,
cited in Medium, June 1, 2017)
“We’re sure that blockchain will become as commonplace as the Internet and
smartphone” (citation from an event in CCN, June 18, 2017)
The most concrete feature of the imagined future is the absence of intermediaries, captured within
the “Empowerment” frame:
“A global and open blockchain … lends itself very well to current anti-establishment
sentiment,” said Jon Matonis, an economist and founding director of the Bitcoin
Foundation. “The general theme is removing the role of a third-party auditor or
enforcement agency.” (cited in FT, Jan 10, 2017)
Future-perfect thinking implies also the imagined non-reversibility of the development and is
nurtured through a strong belief in technology, supposedly replacing hope through necessity:
“We are on that journey, and there’s no turning back.”, Farzam Ehsani, Blockchain Lead
at the Rand Merchant Bank in South Africa, cited in Medium, June 2, 2017)
A commentator in Medium even refers to logic as supporting his image of a future state:
“…This idea does not come from hope, nor love; it comes from logic.” (Medium, March
12, 2017)
While venture capital is surely important for sensemaking and even sensegiving in this field,
venture capitalists are underrepresented as actors in the present database and are mainly cited
28
through reports on their investment activities. Interpretations of their behaviour, however, suggest
– unsurprisingly – “Competition and Business Opportunities” as the dominant frame.
Finally, the analysis revealed a small but important group of actors not initially distinguished in
Table 1. As observed in early developments of startups in the biotechnology industry (Powell and
Sandholtz, 2012) and in art worlds (Patriotta and Hirsch, 2016) amphibious actors bridge fields
and act as mutual sensegivers early on. Here, such actors either come from the bitcoin community
to collaborate with incumbents (Mike Hearn), or earned a high reputation in the finance industry
to take over startups in the blockchain field (Duncan Niederauer, Blythe Masters). Amphibious
actors import their frames to incumbents or startups, which is dominantly “Efficiency”. By
referring to past experiences in one field and portraying a “shadow future” (Powell and
Sandholtz, 2012: 96) they give sense to the new interstitial field. The efficiency logic is
expressed, for instance, in the following quote:
“Nasdaq said the blockchain technology could significantly speed up the clearing and
settlement of equity trades from the existing standard of three days in the US and two
days in Europe to as little as 10 minutes.” (referring to Duncan Niederauer, in FT, Dec,
30, 2015)
Reference to amphibious actors diminishes over time, suggesting that their ability to give sense to
other actors from their originating field at some point decreases as common meaning structures
develop.
Cues for Sensemaking
Cues, that are enacted events, objects, and messages from others, may nurture various frames.
Eventually, as sensemaking processes move forward, the relationship between cues and frames
become stronger, in the sense that specific cues evoke certain frames, whereas cues for which no
29
frame exist remain unnoticed (Weick, 2006). Thus, observations and experiences are bracketed
and used in idiosyncratic ways, dependent on the dominant frame. In our findings, news on
incumbents rushing into the field nurture the “Exploration and Discovery” frame used both by
start-ups and, to a lesser extent, by incumbents themselves. In addition, for enacting the growing
number of incumbents and regions entering the field, regulators use “Competition and Business
Opportunities” as a frame, expressed through “sandboxing” regulatory environments.
Simultaneously, “Restraint” is used to react to the absence of working applications, whereas
others use “proofs-of-concept” as a cue for the “Efficiency” frame.
How cues are used differently, dependent on the dominant frame, is especially visible with
negative experiences such as apparent abusive behaviour (e.g. some ICOs turned out to be
outright Ponzi-Schemes), design flaws of blockchains and smart contracts (such as the “DAO-
hack”) or increasing transaction costs with the proof-of-work mechanism. Whereas such facts or
events are highlighted largely when “Doubt” is the dominant frame, they are typically ignored in
the context of other frames. In the early phases, especially amphibious actors emphasized the
“Efficiency” frame by isolating (i.e. bracketing) the blockchain technology from cryptocurrencies
as available cues, a process similar to what has been found for mediated sensemaking (Strike and
Rerup, 2016). For example, in 2014 and 2015, the blockchain had to be introduced as “the
technology behind bitcoin”, and amphibious actors used the “Efficiency” frame in opposition to
the “Empowerment” frame utilized by cryptocurrency-proponents.
Discussion and Conclusions
The blockchain technology is said to contain tremendous transformative potential for several
economic sectors. Especially within the financial sector subfield of FinTech, which revolves
around the blockchain technology, possible applications and potential implications of the
30
technology are subject to discussion. Still, the blockchain technology is in its infancy, its
potential being highly uncertain, ambiguous and contested. By studying sensemaking processes
in an interstitial issue field like the blockchain we deviate from and expand traditional
conceptions of sensemaking in several ways. First, rather than representing a single action,
episode, or event, the developments in this field are ongoing, thus enabling us to study ongoing
sensemaking, especially with regard to different temporal frames being used (cf. Maitlis and
Cristianson, 2014). Second, at the intersection of institutional fields, sensemaking by its nature is
collective and distributed and often takes place in virtual spaces, sensemaking dynamics in which
are not well understood. To explain both ongoing and distributed sensemaking we identified
dominant frames, cues, and groups of actors.
Building on data from three different media sources – an established newspaper (FT), an online
forum (Medium), and an online news portal (CCN) - , we found a heterogeneous range of frames
used to make sense of the blockchain technology in the financial sector, reflecting the high
degree of uncertainty among all actors, but also the lack of understanding and knowledge of the
technology among the actors involved, resulting either in reluctance (“Restraint”), euphoric hope
(“Revolution”), or rejection (“Doubt”). Although we were able to identify positive, negative, as
well as neutral frames, the dominance of positive frames is remarkable. Five out of ten frames
identified are mainly positive, including “Revolution”, which is the most common frame
(41.67%). This dominance of positive frames reflects the strong presence of consultants, opinion
makers (journalist, bloggers) and investors in the three different media sources, as these actors
have an interest in announcing the blockhain as “the next big thing”.
In order to picture possible advantages and disadvantages of the technology actors use both
strong metaphors of the past (“gold rush”, “railway mania”, “Wild West”, “industrial revolution”)
31
and analogies to futuristic and future-oriented concepts and scenes (“flying cars”, “religion/faith”,
“journey”). But also references to present situation of the economy (“Commonwealth”,
“internet”, “fuel”) are used. There is no evident link between a particular temporal orientation
and its use in a positive, negative or neutral context. It is interesting, however, that the uncertain
future is imagined in rather conventional ways as either a matter of faith or as a kind of science
fiction. Thus, not just future-perfect thinking is a technique to anticipate future events (Weick,
1995), but also a reliance on common ways of expressing an uncertain future, either as a matter
of fiction or of faith, a tactic we cautiously label “past-future thinking”. Here, however, we are
surprised by the relative dominance of past or present-oriented metaphors, given that fictional
expectations are a driver of capitalist economies (Beckert, 2016), creating expectations that
enable economic exchanges in the first place. In the field of blockchain, such expectations seem
too diverse as of yet to drive investment decisions on a broad scale, though further analysis is
clearly needed to capture the frames used in particular by venture captialists, which are
underrepresented in our sample.
Conclusions are possible in relation to the widely repeated comparison to the development of the
internet. While ambiguity in the early days of the internet was also high, it developed in a rather
linear way from electronic billboards over the advent of HTML, enabling e-business applications,
and finally to the success of social media. Already at this stage, such a straight path seems
unlikely for the blockchain. Rather, a “forking” dynamic can be observed at multiple levels,
leading to contradictory instead of mutually supporting chains: forks within public chains,
between public and permissioned chains (replacing the label blockchain with “distributed
ledger”), and a multitude of variants of permissioned blockchains, with intermediaries
establishing new positions. Eventually, the interstitial issue field might evolve into few rather
homogenous fields accompanied by new labels. The mechanism of “forking” as a means of
32
reducing ambiguity promises to inform sensemaking theory as well as institutional field theories,
though further analysis is clearly needed to systematically capture these developments over time.
The limitations of our study, which lead to questions and tasks for further research, mainly lies in
our limited database and analysis as of yet. First, using the frames we have identified, a
systematic coding of the use of these frames by different actors over time needs to be conducted.
Second, additional data sources need to be included in our analysis, not least to complement the
public discourse with an “insight” view on different actors’ positions and strategies regarding the
blockchain. Additionally, in order to capture sensemaking dynamics on a more micro level we
need away from looking at broad discursive patterns towards analyzing discussion threats
regarding specific issues in the broader debate about the blockchain.
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