Bitcoin Mining in Turkey as an Example of Speculative Entrepreneurship

Abstract

The main purpose of this study is to determine the dimensions of speculative entrepreneurship for Bitcoin Turkish miners and to determine the motivational factors to become entrepreneurs in this area. The study was designed as a qualitative study where data was collected from a sample of 13 Bitcoin miners. The collected data thus was analyzed and coded thorough thematic analysis. After determining each participant's profile, a narrative analysis was conducted to ensure the integrity of the research. Some of the key common characteristics thus determined were awareness, arbitrage, and high-profit expectations whereas the self-manipulation feature was determined as low. The key motivation for Participants for investing in Bitcoin was the absence of central management, the beginning of a new financial structure outside the existing system, the opportunity for absolute privacy, and the excessive interest of society, which would serve as a leverage for arbitrage, with high-profit expectation. Bitcoin miners have seen the opportunity of arbitrage with their increased level of awareness and knowledge. As speculative entrepreneurs Bitcoin miners were aware of the extreme nature of the risk investing in Bitcoin to gain highly desirable and expected profit for using the arbitrage opportunity in the existing system.

Keywords

• Entrepreneurship
• Speculative Entrepreneurship
• Arbitrage
• Cryptocurrency
• Bitcoin Mining.

References

1. 1. Kritikos, A. S. (2020, February). Entrepreneurs and their impact on jobs and economic growth. Retrieved from IZA World of Labor: https://wol.iza.org/uploads/articles/8/pdfs/entrepreneurs-and-their-impact-on-jobs-and-economic-growth.pdf
2. 2. Aidis, R., & Praag, M. V. (2007). Illegal entrepreneurship experience: Does it make a difference in business performance and motivation. Journal of Business Venturing, 22, 283-310.
3. 3. Andresen, G., Garzik, J., & Sipa, S. (2018, November 9). Bitcoin. sourceforge.net: https://sourceforge.net/projects/bitcoin/
4. 4. Auerbach, C. F., & Silverstein, L. B. (2003). Qualitative Sata: An Introduction to Coding and Analysis. New York: NYU Press.
5. 5. Bacq, S., Hartog, C., & Hoogendoorn, B. (2016, ). Beyond the moral portrayal of social entrepreneurs: An empirical approach to who they are and what drives them. Journal of Business Ethics, 703-718.
6. 6. Başkale, H. (2016). Nitel araştırmalarda geçerlik, güvenirlik ve örneklem büyüklüğünün belirlenmesi. Dokuz Eylül Üniversitesi Hemşirelik Fakültesi Elektronik Dergisi, 9 (1), 23-28.
7. 7. Baur, D. G., Hong, K., & Lee, A. D. (2017, September). Bitcoin: Medium of exchange or speculative assets? Retrieved from papers.ssrn.com: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2561183
8. 8. Bitcoinwiki. (2018, October). Bitcoin IRS channels. Retrieved from https://en.bitcoin.it: https://en.bitcoin.it/wiki/IRC_channels

9. 9. Blockchain.com. (2020, March). Bitcoin statistics. Retrieved from Blockchain: https://www.blockchain.com/tr/stats
10. 10. Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101.
11. 11. Broersman, M. (2018, March). Datacenter Heists: Raiders steal hundreds of Bitcoin-mining servers in Iceland. Retrieved from www.silicon.co.uk: https://www.silicon.co.uk/security/raiders-bitcoin-servers-iceland-data-centres-229297?inf_by=5b0cf937671db8d96d8b5725
12. 12. Bruce, R. (2016, July). Are you a fundamental or speculative entrepreneur? Retrieved from Forbes: https://www.forbes.com/sites/robinbruce/2016/07/19/are-you-a-fundamental-or-speculative-entrepreneur/#74c875bf7a3d
13. 13. Carvalho, I., Costa, C., Lykke, N., & Torres, A. (2018). Agency, structures, and women managers' views of their careers in tourism. Women's Studies International Forum, 71, 1-11.
14. 14. Cointelegraph. (2018, May). The cost to mine 1 Bitcoin. Retrieved from cointelegraph.com: https://cointelegraph.com/news/cases-of-illegal-bitcoin-and-cryptocurrency-mining-chicken-farms-and-new-york
15. 15. Creswell, J. W., & Miller, D. L. (2000). Determining validity in qualitative inquiry. Theory Into Practice, 39(3), 124-130.
16. 16. Cuthbertson, A. (2018, April). Bitcoin will replace gold and soar in price to $700,000, says major investors. Retrieved from independent.co.uk: https://www.independent.co.uk/life-style/gadgets-and-tech/news/bitcoin-price-live-gold-value-cryptocurrency-sohn-soros-invest-pfeffer-a8323441.html
17. 17. Çakracıoğlu, A. (2019, December). Kripto Para BITCOIN. Retrieved from TC Başbakanlık Sermaye Piyasaları Kurumu: http://spk.gov.tr/yayingoster.aspx?yid=1130&ct=f&action=downloadfile
18. 18. Çalı, H. H., & Tombul, F. (2014). Nötrleştirme teknikleri ve kentsel mekanda işlenen hırsızlık suçları: Erzurum alan araştırması örneği. Elektronik SosyaBilimler Dergisi, 13(51), 307-328.
19. 19. De Monthoux, P. G. (2015). Art, philosophy, and business: Turns to speculative realism in European management scholarship. European Management Journal, 33, 161-167.
20. 20. Dew, N., Read, S., Sarasvathy, S. D., & Wiltbank, R. (2015). Entrepreneurial expertise and the use of control. Journal of Business Venturing Insights, 4, 30-37.
21. 21. Eken, İ. (2020, February). Relationship Between Generations of Entrepreneurs and Entrepreneurial Traits - Basılmamış Doktora Tezi. Retrieved from University of the Incarnate Word The Athenaeum: https://athenaeum.uiw.edu/cgi/viewcontent.cgi?article=1024&context=uiw_etds
22. 22. Fassin, Y., & Drover, W. (2017). Ethics in entrepreneurial finance: Exploring problems in venture partner entry and exit. Journal of Business Ethics, 649-672.
23. 23. FATF. (2019, October). Financial Action Task Force Report: Money laundering using new payment methods. Retrieved from http://www.fatf-gafi.org: http://www.fatf-gafi.org/media/fatf/documents/reports/ML%20using%20New%20Payment%20Methods.pdf
24. 24. Foley, S., Karlsen, J. R., & Putnins, T. J. (2018, January). Sex, Drugs, and Bitcoin: How much illegal activity is financed through cryptocurrencies? Retrieved from papers.ssrn.com: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645
25. 25. Gunter, F. R. (2012). A simple model of entrepreneurship for principles of economics courses. Journal of Economic Education, Vol. 43, No. 4, 1-11.
26. 26. Harper, D. (2003). Foundations of Entrepreneurship and Economic Development. New York: Routledge & Taylor Francis.
27. 27. Kharpal, A., & Gamble, H. (2018, February). Bitcoin will someday be worth as much as 40 times its current value, says Cameron Winklevoss. Retrieved from www.cnbc.com: https://www.cnbc.com/2018/02/07/winklevoss-twins-bitcoin-will-be-worth-40-times-current-value.html
28. 28. Kirzner, I. (1973). Competition and Entrepreneurship. Chicago: The University of Chicago Press.
29. 29. Kirzner, I. (1979). Perception, Opportunity, and Profit. Chicago: The University of Chicago Press.
30. 30. Kirzner, I. (1999). Creativity and/or Alertness: A Reconsideration of the Schumpeterian Entrepreneur. Review of Austrian Economics, 11, 5-17.
31. 31. Kirzner, I. (2001). Piyasa süreci teorisi: Tarihsel gelişim. Liberal Düúünce, 21, 73-85.
32. 32. Kocabıyık, O. O. (2016). Olgubilim ve gömülü kuram: Bazı özellikler açısından karşılaştırma. Trakya Üniversitesi Eğitim Fakültesi Dergisi, 6 (1), 55-66.
33. 33. Kvale, S., & Brinkmann, S. (2009). InterViews: Learning The Craft of Qualitative Research Interviewing. Thousand Oaks: Sage Pub.
34. 34. Lemieux, F., & Prates, F. (2011). Entrepreneurial terrorism: Financial strategies, business opportunities, and ethical issues. Policies, Practice, and Research, 12 (5), 368-382.
35. 35. Lincoln, Y. S., & Guba, E. G. (1986). But is it rigorous? Trustworthiness and authenticity in naturalistic evaluation. New Directions for Evaluation, (30), 73-84.
36. 36. Mallin, M. L., & Serviere-Munoz, L. (2013). An exploratory study of the role of neutralization on ethical intentions among salespeople. The Marketing Management Journal, 23(2), 1-20.
37. 37. MEB. (2020, February). Ortaöğretim girişimcilik dersi öğretim programı. Retrieved from Milli Eğitim Bakanlığı: http://mufredat.meb.gov.tr/Dosyalar/2019930143830793-G%C4%B0R%C4%B0%C5%9E%C4%B0MC%C4%B0L%C4%B0K%20DERS%C4%B0%20%C3%96%C4%9ERT.%20PROGR..pdf
38. 38. Miles, M. B., & Huberman, A. M. (1994). An Expanded Sourcebook: Qualitative Data Analysis. Thousand Oaks, CA: Sage Publication.
39. 39. Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science 29(7), 770–791.
40. 40. Mises, L. (2012). Human Action: A Treatise on Economics. Connecticut, USA: Martino Fine Books.
41. 41. Murray, R. N. (2018, November). Entrepreneurship: Kirzner vs. Mises. Retrieved from https://mises.org: https://mises.org/wire/entrepreneurship-kirzner-vs-mises
42. 42. Nakamoto, S. (2008, October). Bitcoin: A peer-to-peer electronic cash system. Retrieved from www.bitcoin.org: https://bitcoin.org/bitcoin.pdf
43. 43. New Liberty Standard. (2019, February). Bitcoin 2009 exchange rate. Retrieved from newlibertystandard.wikifoundry: http://newlibertystandard.wikifoundry.com/page/2009+Exchange+Rate
44. 44. Oylumlu, İ. S. (2019). Üçlü Sarmal İşbirliğine Dayalı İnovasyon Model Üretimi: Türkiye Örneği. İstanbul: Hiperlink Yayınları.
45. 45. Öztürk, M. B., Arslan, H., Kayhan, T., & Uysal, M. (2018). Yeni bir hedge enstrümanı olarak Bitcoin: Bitconomi. Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 11 (2), 217-232.
46. 46. Patton, M. Q. (2015). Qualitative Research & Evaluation Methods: Integrating Theory and Practice. Thousand Oaks, CA.: Sage Publication.
47. 47. Powers, A. (2020, January). Why gen-Z talent is more likely to pursue entrepreneurship. Retrieved from Forbes: https://www.forbes.com/sites/annapowers/2018/07/31/why-gen-z-talent-is-more-likely-to-pursue-entrepreneurship/#59cbb11d7822
48. 48. Shane, S., & Venkatarman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25, 217-226.
49. 49. Skyes, G. M., & Matza, D. (1957). Techniques of neutralization: A theory of delinquency. American Sociological Review, 22(6), 664-670.
50. 50. Slushpool. (2018, September). Bitcoin mining pool. Retrieved from https://slushpool.com: https://slushpool.com/home/
51. 51. Stenberg, R., & Wennekers, S. (2005). Determinants and effects of new business creation using Global Entrepreneurship Monitor data. Small Business Economics, 24 (3), 193-203.
52. 52. TBMM. (2019, February). Dönem 22, Yasama Yılı 4, S.Sayısı 1061, (10/16, 262) Esas Numaralı Meclis Araştırması Komisyonu Raporu. Retrieved from tbmm.gov.tr: https://www.tbmm.gov.tr/sirasayi/donem22/yil01/ss1061m.htm
53. 53. TCMB. (2020, January). Türkiye Cumhuriyeti Merkez Bankası Terimler Sözlüğü. Retrieved from İktisat.cu.edu.tr: http://iktisat.cu.edu.tr/tr/Belgeler/Terim%20S%C3%B6zl%C3%BCk/TCMB-Terimler%20Sozlugu.pdf
54. 54. USA FBI. (2019, April). Bitcoin virtual currency: Unique features present distinct challenges for deterring illicit activity. Retrieved from www.wired.com: https://www.wired.com/images_blogs/threatlevel/2012/05/Bitcoin-FBI.pdf
55. 55. Uymaz, A. O. (2020). Spekülatif girişimcilik açısından Emile Zola’nın Para romanının incelenmesi. Alanya Akademik Bakış, 4(1), 123-142.
56. 56. Wachowski, L., & Wachowski, L. (Yönetenler). (1999). Matrix [Movie].
57. 57. Wales, W., Vishal, G., & Mousa, F. T. (May 2016). Empirical research on entrepreneurial orientation: An assessment and suggestions for future research. International Small Business Journal, 357-383.
58. 58. Wikipedia. (2019, May). Çiftlik Bank. Retrieved from wikipedia.org: https://tr.wikipedia.org/wiki/%C3%87iftlik_Bank
59. 59. Wikipedia. (2019, August). History of Bitcoin. Retrieved from wikipedia.org: https://en.wikipedia.org/wiki/History_of_bitcoin
60. 60. Yahoo Finance. (2020, January). Bitcoin USD. Retrieved from Yahoo Finance: https://finance.yahoo.com/quote/BTC-USD/history/
61. 61. Yıldırım, A., & Şimsek, H. (2016). Sosyal Bilimlerde Nitel Araştırma Yöntemleri. Ankara: Seçkin Yayıncılık.
62. 62. Zhang, T., & Acs, Z. (2019). Does generation matter to entrepreneurship? Four generations of entrepreneurs. The Southern Economic Journal, 86(2), 459-477.