The following content is provided by World of Media Journal of Russian Media and Journalism Studies
(Author: Anastasiia Pachina, Anastasiia Popova – National Research University ‘Higher School of Economics’, Russia)
Despite the fact that the ‘mining’ at the end of 2017 is not yet defined in the Russian legislation, the fact of investing in equipment for ‘mining’, the ability to generate income and entrepreneurial activities allows us to connect this practice not only with the development of technology, but also with economic activities that generate economic discussions.
Economic discussions in the media affect the behavior of people and their perception of reality (Kazun, 2017: 98-99). However, even if there is a desire for the population to be aware of the economic situation, only 38% of Russians believe that economic news is fairly objective, according to the research of VCIOM (Russian Public Opinion Research Center) ‘Media consumption today’, which was conducted in 2017. Moreover, the real state of affairs in the economy, their media coverage and public opinion on these issues do not always coincide.
Studies also show that due to the complexity of translating of objective economic indicators into subjective assessments the economy is a complex topic for discussion (Holbrook, Garand, 1996: 351–375). In this situation, the mass media take on the complex role of the translator, which should, in an understandable form, bring the news to the reader. However, economically focused topics can be ignored by the media, as information can be incomprehensible to the audience, and journalists often do not have the necessary knowledge (Manning, 2013). An example of such fragmentation of economic news is the extremely low media attention to the situation in the markets of debt instruments and derivatives at the threshold of the financial crisis of 2008 (Tett, 2009).
It would seem that in the case of ‘mining’ the incompleteness of information should not arise. There are a number of online publications that specialize in cryptocurrency and blockchain technologies, such as Forklog, DeCenter, Cointelegraph and others. According to the rating of Medialogy (www.mlg.ru), www.forklog.com, the online resource, ranks eleventh in the top-20 most cited media of the financial sector for 2017. In top-15 economic channels Telegram on views, four are devoted to the topic of cryptocurrencies.
However, the discussion on the cryptocurrency has already gone beyond the framework of a purely professional community and often seeps into the agenda of popular media. Focusing on a wide audience, the media are forced to adapt information and select the most interesting stories. In our work, we concentrate on non-core media, on those sources of mass information that do not specialize in the materials of cryptocurrency and blockchain technology. Due to the fact that most of the population has no personal experience in this area, materials about ‘mining’ can be classified as ‘unostentatious’ issues. In this case, the media are almost the only source of information on this issue and directly affect the formation of public opinion (McCombs et al., 1981).
The purpose of our work is to identify the people and institutions involved in the discussion about ‘mining’ in non-core Russian media and to reveal the general context in which the discussion is immersed, provided that the majority of the Russian population does not have personal ‘mining’ experience. We highlight the most popular categories covering the topic of ‘mining’ in non-core media and focus on the correlation of the received categories, on their links and mutual mentions.
In our study, we used the resource Factiva. Around 1,500 Russian-language materials on mining were downloaded during the period from January 1, 2011 to December 12, 2017. Then, using the Yoshikoder program, we identified categories (see Appendix, Table 1) and carried out quantitative content analysis or frequency allocation of mentions. The frequency of mentions is sorted in descending order, which made it possible to emphasize the most popular words in network analysis.
In the study, we used media materials from all regions of Russia, not limited to a specific locality, as we assume that ‘mining’ is a new practice for Russia, which is concentrated not only in Moscow, but also in other regions of the country. We focused on television news releases and information messages in print media, online sources and radio air.
In addition to the quantitative method of estimating the frequency of mentioning the selected categories with Yoshikoder, we used the network analysis. To visualize network analysis, we applied Gephi software, which creates the image in terms of the pairwise correlations. The main focus of network analysis is the comprehension and interpretation of social reality as an integral picture through interconnected multiple nodes (words, schemes, frames) (Kaplan, 1973: 66). Network analysis allows the viewer to see which provisions have the received categories, whether their positions are similar and how categories are ‘embedded’ in the overall network (Hanneman, 2005: 4). Categories can be identified as public themes, political candidates and consumer brands (McCombs, 2001: 69). Over the past few years, the network analysis method has been used to study the interaction between news groups (Choi, 2002), the personalities of television shows, television channels and websites (Fine, 1981).
People create connections in social networks between each other with the help of the likes (Xiaolong, 2014: 91). Similar to ‘mutual likes’ a network connecting events and personalities is modeled through the mutual mentions in the media. Thus, network analysis focuses on the relationship between categories, rather than on individual actors and their attributes (Hanneman, 2005: 4).
In our study, the categories are presented by neutral words: countries, individuals, state structures, and by emotionally colored words. To find ‘emotions’ in the text, we compiled a dictionary of positively and negatively colored words with the help of quantitative content analysis (Thelwall, 2010: 2547). The dictionary included three emotionally colored categories: legalization, regulation and violation. In addition, we had the opportunity to confirm or deny certain types of communication through the materials of personal interviews with those who are engaged in the mining of cryptocurrency – ‘miners’.
The most frequently published articles in the Russian media about the cryptocurrency contain information relating to Russia, which is predictable. Events in the country (or with its participation) generally attract media attention because they can influence the population. Hence, this news is wittingly more interesting. However, other countries such as the United States, Japan and China are often mentioned in the discussion about cryptocurrencies in Russian media (Table 1).
The presence or absence of a foreign country in the news agenda can be explained in three ways: national characteristics (the size of the country and its economic and political power of influence in the international arena), connectivity (geographical, demographic and other affinity with the country) (Sheafer et al., 2013: 1256–1276). Finally, by events, for example, natural disasters, wars, conflicts. Thus, the presence of the United States, Japan and China in Russian articles on ‘mining’ may be explained by the significant influence of these countries in this area of study while, for example, CIS countries have regular contacts with Russia.
In addition, some of the identified countries were also mentioned in one of the interviews in the question of the right regulation of ‘mining’: ‘… countries are heterogeneous, and one of them will ban, the others will not. For example, Japan has allowed, as well as Australia; in the United States some people are thinking whether to allow or prohibit’ (Oleg, ‘Miner’).
In another interview, China was mentioned during a talk about purchasing of equipment for ‘mining’. In addition, both informants noted that everything is produced exclusively in China. They buy it either through the intermediary or through intermediaries.
As one can see in Figure 2, countries such as the USA, Russia, Japan and China, and also European countries, partly Australia and Latin America are concentrating the Bitcoin nodes. The counting data is based on four types of nodes: Wallet, ‘Miner’, Full Blockchain and Network Routing. Thus, despite the trait of over-territoriality, the cryptocurrency still has a geographic specificity. And the media pay special attention to countries that have significant influence in this area, as well as to countries where significant changes take place in the legal regulation of the cryptocurrency market. In general, the mass media are more likely to focus on changes of the situation (Soroka et al., 2015), which explains the attention of Russian media to countries introducing new bans on such activities, or, on the contrary, resolving some of its aspects.
Another point is the frequency of mentions of Russian cities (Table 2). We assumed that ‘mining’ is a specificity of Central region of Russia. However, this phenomenon is not only specific to the capital region. According to content-analysis of media, Irkutsk, St. Petersburg and Novosibirsk are mentioned quite often.
Similar conclusions about the involvement cryptocurrencies discourse of various regions of Russia can be arrived at and based on the statements of informants:
1) ‘I’m sure there is a lot of concentration in Moscow region. Because it is possible to steal electricity and therefore, that there are a lot of abandoned warehouses, mini-factories, these are other premises. For example, in the Vladimir region. Well, very much in Siberia, because it’s just cold, you do not need to spend additional money on air conditioning’ (Eugene, ‘Miner’).
2) ‘I think there are many in Moscow. Well, in the regions, too. Now the Irkutsk region is known’ (Oleg, ‘Miner’).
We can find out that there is a concentration in the Central and Siberian federal districts.
Moreover, according to the results of content analysis, it is possible to identify top-3 personalities by frequency in the news of Russian media: Dmitry Marinichev (Internet ombudsman), Satoshi Nakamoto (creator of Bitcoin) and Vitalik Buterin (creator of Etherium, the second most popular cryptocurrency in the world (Table 3).
The interview with the ‘miners’ confirms the involvement of the Internet ombudsman Marinichev in the discussion about the ‘mining’ in the Russian media:
1) ‘… there is an ombudsman <…> our Internet in Russia, here, he is very hard engaged in “mining” himself’ (Eugene, ‘Miner’).
2) ‘Marinichev, adviser to the President in the sphere of Internet rights or whatever it is, I do not know <…> In my opinion, he has a “mining” equipment there (in the southeast of Moscow, – note). Of course, I do not know, I have inaccurate data. <…> This is from the media’ (Oleg, ‘Miner’).
Their opinions on ‘mining’ are also expressed by the political institutions and the Central Bank. Table 4 demonstrates that the largest number of references refers to the Central Bank, the next position in the rating belongs to the Government, then to the Ministry of Finance.
Table 5 shows the number of mentions of various media in the articles on ‘mining’ where the absolute leader is RBC.
It is worth noting that it was RBC, the only Russian media, that was listed by one of the informants as the direct source of information on the topic of ‘mining’ and the sphere of cryptocurrencies. The attention of certain media sources to the ‘mining’ can be explained by the complexity of the topic.
Network of mutual mentions
The answer to the question about what categories the discussion about ‘mining’ in Russian media are more popular is in Figure 4.
Based on this diagram, we can conclude that the geographic (Russia, Moscow region, the USA) and decentralized technologies (Bitcoin, Blockchain, Cryptocurrency, ICO) contexts are quite common.
Moreover, to analyze the connection of key categories, we have built a network of mutual mentions of the topic of ‘mining’ in Russian media (Figure 5). A similar method has already been used in a number of studies (Guo & Vargo, 2015; Guo et al., 2015; Kazun, 2017; Vu et al., 2014). The categories that are closest to ‘mining’ mentioned together with the topic of cryptocurrency more often.
As it was noted earlier, the ‘mining’ is still outside the legal field (the beginning of December 2017), but the frequency of the category related to regulation (which includes regulation, law, legislation, control, tax, taxation) means the propensity of the discussion regulation in media.
In contrast, there is a thought among ‘miners’ that ‘mining’ as well as the whole Blockchain sphere cannot be a priori adjusted: ‘We can adopt a law on how the moon should move. But saying this to the moon is a bit redundant. It will move as it did. No one can influence the movement of the moon. No one can adjust this movement. The same is here’ (Alexandr, Blockchain specialist and ‘miner’).
There are also several reasons why states want to take control of digital currency. There is a risk that people may become victims of fraudsters (scammers) and Ponzi schemes. Also, the cryptocurrency provides opportunities for money laundering, hiding income from the tax service and making transactions with illegal goods (Turpin, 2014).
In addition, the media pay a lot of attention to the Central Bank in this case. The explanation is that this institute has the monopoly on money issue. The fundamental characteristic of Bitcoin is full decentralization – the principle of a peer-to-peer network, which in fact means no influence on Bitcoin from the public or private level. This makes Bitcoin independent from issuing centers (Butenko, 2014). These characteristics can also argue the importance of the figure of the Russian president, and his greatest connection with the category of regulation (269 mutual mentions).
The discussion about the “mining” is relevant for the Central Bank and the Ministry of Finance, therefore, we considered their mutual mentions with emotional categories (legalization, violation, regulation). The Central Bank is more immersed in the discussion about mining than the Ministry of Finance (236 and 151 mutual mentions with mining, respectively). For the Central Bank, regulation is the most popular category with which it has the highest percentage of mutual mentions (8.95% of the total), violation (1.32%) is in the second place, legalization (0.64%) is the least popular. For the Ministry of Finance, regulation is also the most popular category (8.64%). However, despite the obvious urgency of the issue of the ‘mining’ legal status, the relationship between emotionally colored categories and the most interested in this issue state structures is almost imperceptible.
From interviews with the ‘miners’ it was found out that the equipment is most often supplied from China, but the number of mutual mentions showed that the equipment category has a closer connection with the USA and Hong Kong (64 and 35 mutual mentions respectively) than with China (2 mutual mentions).
In addition, the discrepancy with the materials of the interview is observed in a situation with regional specifics, which is interesting with such a phenomenon as ‘cryptotourism’. It describes the location of ‘mining’ equipment for the production of cryptocurrencies in the most profitable regions for mining. For example, Irkutsk and Novosibirsk regions attract ‘miners’ due to cheap electricity, which is confirmed by the materials of the interview. However, the analysis of the number of mutual mentions showed that the phenomenon of ‘mining’ is more closely connected with Moscow region and Moscow (287 and 188 mutual mentions respectively) than with St. Petersburg (35 mutual mentions).
Over the past year, the phenomenon of ‘mining’ has become one of the most high-profile events in the technological and economic spheres. The words ‘bitcoin’, ‘cryptocurrency’ have long gone beyond the profile of economic publications and leaked into the socio-political sources of information that set the agenda.
Because of the content analysis of the media, we identified the most popular categories in the subject of ‘mining’. Further, the most mentioned countries and cities of Russia are identified. It is worth noting that certain people and organizations are involved in the subject of the extraction of cryptocurrency, both governmental structures and private entrepreneurs. In addition, it is important to note that the category of ‘regulation’, which includes the words ‘taxes’, ‘laws’ and ‘control’ is the third by number of mentions, which means close attention to this topic in the socio-political debate around the phenomenon of ‘mining’.
Network analysis showed that the discussion in the media on some issues is different from the information received from the ‘miners’. So, the equipment, which comes mainly from China (as informants said), as a category in the media is practically not connected with it. The same is observed in the context of the regions of Russia.
In this study, quantitative analysis of the frequency of references was used to identify the categories required for the research. That is, the topics for analysis were taken from real data. Moreover, for a more substantive interpretation, we used interview materials with ‘miners’. They are the direct carriers of this practice and experts, since their activities are the object of media publications. This allowed us to look at the situation from various sides. The research makes it possible to understand the involvement and influence of different persons and institutions in a cryptocurrency sphere that could allow adopting strategies and laws in this digital financial issue.
In our study, we used non-core Russian media to analyze the ongoing discussion about mining, provided that the majority of the Russian population has no experience in interacting with cryptocurrency. In the future it is worthwhile to consider publications that specialize on the cryptocurrency and the process of 43its extraction in order to recreate the full picture of the relationships in the new phenomenon that swept the society.
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