Exploring Softwar, Chapter 2: Grounded Theory Meets Bitcoin
Below is a comprehensive summary of Chapter 2 of Softwar: A Novel Theory on Power Projection and the National Strategic Significance of Bitcoin, focusing on its main ideas, structure, and why the author chose the approach he did. This should help you revisit specific points later for further research.
Chapter 2: Methodology
Chapter Overview:
The author, Jason Lowery, outlines his choice to use grounded theory for this research on Bitcoin’s national strategic implications, explaining how grounded theory works, why it suits his investigation, and the advantages as well as pitfalls he encountered. He describes his process in a stepwise fashion—collecting data, coding it, looking for patterns, and constructing a new theoretical framework. The idea is that analyzing Bitcoin solely from monetary or economic lenses may create analytical blind spots, so a more flexible, open-ended method is needed.
2.1 Four Reasons for Grounded Theory
Lowery offers four main rationales for applying grounded theory—rather than a typical hypothesis-driven or literature-heavy approach:
Novelty and Originality:
Bitcoin and its proof-of-work technology, he argues, have often been studied using the same cyclical economic/financial frameworks. Lowery wants to break new ground and emphasize the power-projection aspect. Grounded theory is well suited for generating genuinely new frameworks.Complex, Trans-Scientific Phenomenon:
National security, power-projection, and warfare are intricate topics mixing technology, politics, ethics, and sociology. A flexible, iterative method like grounded theory helps him integrate diverse viewpoints.Preventing Analytical Bias:
By not starting with the assumption that Bitcoin is simply “digital money” or “cryptocurrency,” he guards against dismissing less obvious strategic or security uses.Iterative, Data-Driven Insight:
Grounded theory allows him to do open coding, then refine categories, then shape a broader thesis from repeated patterns that emerge, rather than forcing data to fit a predefined concept.
Sections to revisit for more depth: The discussion on how typical “finance-first” analysis could systematically blind researchers to Bitcoin’s warfighting/security significance.
2.2 Overview (Grounded Theory Basics)
Lowery sketches out the fundamentals of grounded theory: a qualitative research methodology that builds theory “from the ground up.” Instead of beginning with a hypothesis, the researcher collects data, codes it for recurring concepts, compares categories, and gradually builds a theory that explains the patterns. The approach is iterative—new data can lead to re-coding or re-organizing categories.
He highlights that he used an interpretivist approach (where the researcher’s viewpoint, including his experience as a U.S. military officer, is partly woven into the analysis). In grounded theory terms, he is constantly comparing new information about Bitcoin, warfare, historical analogies, and various frameworks on power and security.
Sections to revisit for more depth: The portion where Lowery explains how he blended reading in biology, anthropology, computer science, and warfare to form “Power Projection Theory.”
2.3 Process
This is the longest portion of Chapter 2. Lowery describes, step-by-step, how he gathered information from many seemingly unrelated domains—biology, psychology, military history, political science, etc.—to see how organisms and societies manage resources and disputes. Then he coded this evidence, looked for repeating patterns, and grouped them under core categories (like “physical-power-based” vs. “abstract-power-based” tactics). Finally, he used these categories to shape his hypothesis that Bitcoin’s proof-of-work is fundamentally physical power projection with major security implications.
He displays a four-phase diagram to show how grounded theory evolves:
Open Coding: Reading broad material, noting recurring ideas, labeling them with tentative “codes.”
Axial Coding: Linking codes around central concepts or themes (e.g., “resource control structures,” “non-kinetic warfare,” etc.).
Selective Coding: Distilling those themes into a cohesive theoretical narrative—“Power Projection Theory.”
Theory Building: Arguing how these insights produce a new viewpoint on proof-of-work, culminating in “softwar.”
Sections to revisit for more depth: The section listing actual memos, codes, or conceptual diagrams (e.g., “Conceptual Diagram Generated During Data Coding,” as well as the “Core Categories Chosen for this Research Effort”). These visuals show exactly how he formed categories like “domestication is dangerous” or “emergent benefits of war.”
2.4 Disadvantages & Advantages
Lowery acknowledges that grounded theory has pros and cons:
Advantages:
Flexible, letting him pivot toward power projection and security questions that typical Bitcoin research might miss.
Iterative, so it adapts as new insights emerge.
Suited to large-scale, multidisciplinary inquiries.
Disadvantages:
Time-consuming; coding and re-coding take considerable effort.
Potential for subjectivity or “overreach,” as the researcher might see patterns that others might not.
No immediate hypothesis-testing; it might feel less definitive than a classical, quantitative approach.
Sections to revisit for more depth: The final paragraphs of Section 2.4, where he breaks down how these disadvantages impacted his research timeline and academic approach.
2.5 Lessons Learned
Lowery concludes Chapter 2 reflecting on what he learned about the grounded theory process:
The challenge of weaving multiple disciplines together—biology, warfare theory, computer science—paid off because it revealed new angles.
He needed to resist the temptation of reinterpreting every piece of data as “proof” for his emerging theory. Instead, he tried to keep an open mind until late-stage coding.
By the end, he realized that re-framing Bitcoin as a form of warfighting technology, a “softwar” protocol, was only possible because grounded theory nudged him to keep re-comparing data with no preconceived model.
He recommends future researchers consider a similar “from the ground up” approach if they suspect the existing, conventional wisdom might be limiting how we understand an emerging technology.
Sections to revisit for more depth: The last few paragraphs of Section 2.5, where he specifically ties lessons learned back to how they shaped his final arguments about proof-of-work.
Summary
In Chapter 2, Lowery lays out why and how he used a grounded theory approach to develop his arguments about Bitcoin’s security and strategic significance. By synthesizing data from many different fields—rather than focusing exclusively on economics—he was able to propose a wholly different perspective on proof-of-work and its potential to function as an electro-cyber “softwar” technology. He also acknowledges this approach is somewhat subjective, time-intensive, and not the typical route for analyzing a technology like Bitcoin—but emphasizes that the unique insight it produced (linking Bitcoin to non-lethal power projection and national security) is exactly why a flexible methodology like grounded theory was so valuable.
If you want more context:
Revisit Sections 2.1 through 2.3 for a thorough breakdown of the method’s evolution (including open coding, axial coding, etc.).
Check out Section 2.4 to see how he weighed grounded theory’s strengths and weaknesses in the context of analyzing a security technology.
Look at Section 2.5 for deeper discussion on how the lessons from grounded theory influenced the final “softwar” thesis.
That covers the main points and structure of Chapter 2. Let me know if there’s anything in particular you’d like to explore further.