Why the journalism cryptocurrency failed

SINGAPORE — The cryptocurrency Civil was to save journalism. But chatter on its “initial coin offering” scaled back from a $32-million target to an $8-million “soft cap” or minimum target.

Only $1.3 million of Civil was sold when this closed last Oct. 15, tragically short especially after deducting $1.1 million sold to the seed investor.

But does the failure of this dream marriage of new technology and noble old cause arise from cryptocurrency or journalism per se? In other words, what problem did cryptocurrency actually solve?

Journalism was never a primary envisioned application of blockchain, the underlying technology.

Critics deride blockchain as glorified spreadsheets.

Picture a stock exchange where millions of strangers transact. They rely on it to match these millions of transactions. Picture a bank where millions of strangers exchange money, similarly relying on it to record all these without missing a zero or nine.

Blockchain aims to make the millions of transactions possible without the stock exchange or bank between everyone.

It spreads thousands of simultaneously updating copies of transaction records (hence “decentralized ledger”). The network is tamperproof unless one hijacks a majority of the copies, impossible if they are truly spread out.

Picturing this, one infers blockchain’s key qualities and why they do not relate to journalism.

First is decentralization, or spreading ledgers to ensure no single person controls them. Thousands of independent copies facilitate trust among strangers.

But newspapers’ primary problem is not centralized control by editorial boards.

Blockchain does not address the closest thing to a centralization problem, in how news (and ad revenue) is now distributed. Civil estimates search engines and social media platforms control 60-70 percent of US digital advertising.

Second is immutability, or making ledgers impossible to alter.

Disappearing news stories are not the problem. No one who attacks or threatens journalists literally takes down websites or hacks these to rewrite stories.

But if not blockchain’s general qualities, what about Civil’s specific structures?

The “whitepaper” or Civil’s description outlines it as, first, a solution to pay newsrooms that join its network.

The obvious question is: Why not normal money? Indeed, Civil’s system would allow dollar and euro payments.

Second, Civil allows holders to vote on the ethics of specific stories within its network. They may also vote to reject new newsrooms, filtering genuine journalists from spammers and trolls.

But who would use — and would pay in cryptocurrency to use — this elaborate voting system? Constructive changes in editorial policy have resulted from thoughtful letters (or irate social media posts). When did your newspaper last formally poll subscribers?

Further, rejected anonymous sites and fake accounts could readily reach us, together with cat pictures and selfies.

Civil’s network would have to become the exclusive source of news for its plan to work. Unless this (extremely lofty) ideal becomes reality, its voting system could not enhance trust in journalism or eliminate fake news.

Looking at other solutions, Singapore’s 176-page parliamentary report on fake news made lower technology recommendations: Reinforce trust in journalism. Train editors for the digital, data-driven age. Educate citizens and instill a fact check culture. Remove ad revenue for fake news.

Blockchain could revolutionize payments, trading, logistics and supply chains, ownership of property from land to artwork, recording of educational credentials and health records, and even national elections. But one must temper grand aspirations by asking why exactly it (or any new technology) solves a particular problem.

Journalism faces many problems and blockchain offers many solutions. But perhaps Civil demonstrated that not every problem is a nail and not every solution is a hammer, however shiny and new.

React: [email protected], Twitter @oscarfbtan, facebook.com/OscarFranklinTan. This column does not represent the opinion of organizations with which the author is affiliated.