Civil says the future of media is blockchains and crypto-currencies

There are plenty of startups trying to reinvent how the news business works by adding features such as micro-payments or setting their sights on becoming “the iTunes of news.” But a startup called Civil is trying to take a quantum leap beyond all of these efforts: It’s not just inventing its own platform for news and journalism, it’s also inventing its own currency and its own monetary system at the same time.

Civil, which was founded by Matthew Iles last year, is building what it hopes will be an open marketplace for journalists, scheduled to launch in the spring of 2018. The building blocks of the project are blockchains and a bespoke crypto-currency, a system of “tokens” that Civil has created that will both fund the development of the platform and be used as compensation for writers and editors who take part in the marketplace.

What he’s trying to create, Iles says, is a marketplace for independent journalism where the individuals who create that journalism are funded directly by their readers, as well as the broader Civil community. Crypto-currency is just a way of making those payments easier, and of giving members a stake in something that might increase in value.

In a sense, it’s like a newspaper company giving its journalists shares in the corporation along with their salary, except that both the shares and the salary are composed of a new kind of currency. And Civil is no doubt hoping it can generate more value than the shares of newspaper companies have.

The company outlined its vision in a June manifesto about “self-sustaining journalism,” as well as a white paper published in October. “With open governance and cryptoeconomics, we can create a sustainable place for journalism?—even the kind of local, policy and investigative journalism that has been most eroded. Decentralization is the key to a free and independent press,” the company said.

The whole idea of crypto-currencies has become hugely popular—every day there are reports about the soaring value of Bitcoin, and news about startups launching “initial coin offerings” instead of equity IPOs. But at the same time, the technology behind these new currencies is still poorly understood by many.

Iles admits that both the hype level around Bitcoin and the complicated nature of the technology present a marketing challenge, in the sense that Civil has to simultaneously explain itself and its reason for being while also trying to explain what a crypto-currency and the blockchain are.

“The hype is definitely both helping and hurting,” Iles says. “I used to have to start conversations with ‘Have you heard of blockchain?’ Now everyone’s heard of it, but the downside is that it has become associated with hype and the crypto bubble etc.” The bottom line, Iles says, is that “it’s just a piece of software.” Much like the Internet itself, it can be used for both good things and bad things. Civil hopes to be one of the good things.

When talking to journalists about why they might want to use or become a member of Civil, Iles says he tells them the platform “offers them the ability to find newsrooms that they can connect with, job possibilities—whether freelance or contract — as well as colleagues and collaborative opportunities. It just happens to be funded and paid in a new way.”

Crypto-currencies are a computer-generated alternative to traditional monetary systems, which rely on governments to back them. Bitcoin, the first crypto-currency, was created in 2009 by a programmer named Satoshi Nakamoto (widely believed to be a pseudonym), who described his vision of a peer-to-peer currency. Now there are dozens of different variations, including Ethereum, Litecoin and Dash.

Instead of being dictated by governments, the value in a crypto-currency system comes from computers that perform a series of complicated calculations in order to create new coins, a process known “mining.” The results of this process are recorded in what’s called the “blockchain,” a cryptographically secure ledger that keeps track of every transaction and can be seen by any user. Only a finite number of coins can be created, to prevent inflation.

Civil’s infrastructure, including its version of a crypto-currency, is based on Ethereum. When the platform launches in the spring, it will do an “initial coin offering” that will give its staff—including a number of independent journalists the company is in the process of signing up as members—an ownership stake. And that currency or tokens will also be used to pay journalists who distribute their content through Civil.

Iles says he originally got a journalism degree but then got pulled into marketing. He and his wife created a digital marketing company they later sold, and he started looking for something else to do.

“I had continued to follow the discussions around the state of journalism, and I was struck by how far off the mark everyone was as far as the next thing that was going to save journalism,” Iles says. “No one went to the root cause, which was that journalism needed a new business model. The leading digital advertising companies were the distribution point, and they were just continuing the spiral journalism was going down.”

As he learned more about Bitcoin, Iles says he became convinced that it provided the opportunity to reinvent journalism for the Internet era, and to wean the industry off what he believed was a toxic reliance on advertising.

“I thought we’ve wrapped the world in beams of light with the Internet, and that structure should be a boon to journalism, and free and independent journalism for that matter,” says Iles. “I thought we needed to think more radically, that the existing business model couldn’t just be tweaked back into the service of journalism.”

Civil has raised a total of $5 million from a fund called Consensus Systems that specializes in crypto-currency investments, including a startup called Ujo that is focused on bringing blockchain to the music business.

Maria Bustillos, a writer whose work has appeared in the New Yorker and the New York Times, is one of those who has signed on to be part of the platform, where she will be running a Civil-based digital magazine called Popula. Among the writers she has lined up are Sasha Frere-Jones, a former writer for the New Yorker.

“I’ve been writing about Bitcoin for a long time,” says Bustillos, “and the more I thought about it the more I thought it could be used for our profession.” With the distributed nature of the blockchain ledger, she says, “there would never be fake news—you’d always be able to verify that someone published something. However many people want to join the network, you would have that many cyber-witnesses.”

The other aspect of the blockchain, she says, is that it could help preserve journalistic archives in a way that would make them impossible to delete, something media companies often do after going out of business, or when they are sued. Google has also removed links to articles after lawsuits involving the European “right to be forgotten.”

“We could remove the ability for billionaires and advertisers to threaten what people write any more,” Bustillos says, because a copy of the archives would be held on the computer of everyone who became a part of the platform. The Popula founder says she is working on incorporating a project called the Interplanetary File System, an attempt to build a massively distributed network of computers to store documents.

When an editor accepts a pitch or assigns a story using Civil, Iles says, the two will discuss payment just as editors and journalists always do, but in this case the editor might offer a number of different forms of compensation. It might be a specific number of Civil coins or tokens, but it could also be a percentage of the increase in value in the crypto-currency over a period of time following the publication of the article.

The assumption, Iles says, is that creating good content and building a community of users around that content will increase the value of the underlying tokens. And he says Civil is being very careful to make sure that its version of an ICO doesn’t get swept up in the hype surrounding all things Bitcoin.

“Given the hype, there would have been plenty of opportunity for us to launch a token off a white paper and raise a bunch of money as some others have,” Iles says. “But that would’ve created a speculative market just to take advantage of a land-grab. W’re taking the long road—we want to launch a real working product with our token, and we will be one of the first crypto-currency platforms of its kind to do that.”

In the same way crowd-funding platforms show potential donors as much information as possible about the project they are funding and what they will get in return for the different tiers of donation, Civil will be as transparent a marketplace as possible, Iles says. Members and journalists alike will be able to see what the current market value of a token is, the increase or decrease over time, and other details about the marketplace.

So what if someone from Breitbart News wanted to create a journalistic outlet or marketplace on the platform? “Civil does not have editorial oversight, as long as members are abiding by ethical guidelines,” says Iles. “We want to decentralize the adjudication of those kinds of decisions to the community.” But Civil will ensure that the content published on its service is “accurate and ethically reported,” he says.

Iles said Civil is talking to a number of other independent journalists like Bustillos about setting up virtual magazines or news entities based on the platform, and the company is also working on partnerships with several large traditional media entities who are thinking about experimenting with the model.

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