Civil’s tokenomics has left its journalists wondering where their salary is
niemanlab.org
niemanlab.org
Aside from the startups selling tools and services to the crypto ecosystem itself, does anyone know of an ICO-backed project that has turned into a successful company?
Sometimes, that involves pivoting from a head-in-the-clouds decentralized pipe dream in favor of a viable business, even with customers from outside the industry.
Yes, even they are capable of that. Astonishing!
I think you are reading in something that is not there. I have several friends who have run successful ICOs and they all sincerely believe in their vision and all are working very hard.
However, the fact that yet another an ICO-backed token economy has not developed as pitched is not really news. My point was that it would be news if a token economy actually did develop as pitched.
It's an observation. It's not a judgment about the people working on the projects.
Perhaps my original comment was a bit too snarky, but my point was after a few years of hype about how the blockchain was going to revolutionize everything, and billions of dollars of investment, we should have at least a few real-world use cases. Something beyond the PoC stage.
Perhaps the wild claims and shoot-for-the-stars plans prevented most the blockchain startups from capitalizing on where the easy money was (and usually is), enterprise sales.
IBM sells blockchain solutions. I bet they've made some money doing so (at worst because they could probably sell digital toilet paper and make a profit off enterprise contracts before they phase it out).
Blockchain is very promising but it's an immature field with plenty of room for growth. Most of the people I've met in the last two years are brilliant scientists and engineers but few are experienced at building products with mass appeal (myself included...).
In 2019 we'll see plenty of developments in privacy (Zk-SNARKs/STARKs) and scalability (Plasma, Sharding) and hopefully we'll be able to prove if Proof of Stake is as secure as PoW. With all these new building blocks, I'm certain there will be second generation blockchain products that are closer to regular users.
Conference gossip is that this is not the case, and they're experiencing internal pressure to show a production system - any production system - and then to show one that makes back some of the money they've ploughed into this.
e.g. IBM's systems for Walmart and Maersk are completely centralised, but the back-end database is Hyperledger, so they're being trumpeted as "GOOD NEWS FOR BLOCKCHAIN" - the correct perspective is "with sufficient thrust, pigs fly just fine", and boy are IBM strapping Porky to a rocket.
BAT has the Brave browser as its adoption mechanism. Personally it's my favourite browser for some months now both on desktop and mobile.
OMG is from a company (OmiseGo) who operate a payment network in SE Asia. They are quite big and the adoption of OMG by their traditional service is planned as part of the Plasma project.
Omise is interesting in that they clearly have a product and users. They were one of the first ICOs to put a valuation of the tokens at over $1B. Do you have any idea what kind of transaction volume they are handling? I've never seen any numbers.
Augur is technically interesting as well, but earlier this year Coindesk noted they have a valuation that amounts to $4.8 million per active user, which seems to me to be unsustainable.
https://www.coindesk.com/where-have-all-the-augur-users-gone
Omise hasn't launched it's blockchain platform yet (see Plasma) so their volumes are in local currencies. I understand it's in the MM USD but have no data on them atm.
Mind you that the valuations are often the sales price of the token times the total supply (market cap). This is not a realistic metric imho.
The issue of price discovery is / was addressed in many ICOs using auction theory (English, Dutch, Vicory, etc) but after the sale is completed the market sets the prices. Personally I'm more interested in Token Bonding Curves that guarantee a fixed price along a supply curve.
While only ~5 million monthly active users that's a) still significant in the crypto (but not browser!) space and b) these numbers are before 1.0 is released in February at which point the first marketing push happens.
I'd go as far as to say Brave / BAT will likely be the poster child for the hoped-for utility wave in the crypto scene: the time is right to challenge the surveillance capitalism model (publishers are very receptive to new funding models now) and a fast, secure, crypto-native browser is an obvious onramp for the general public, and if it works their first experience of 'owning' crypto will be through having earned BAT.
Apart from the security and privacy benefits Eich's model offers, I really like the idea of browser-native tipping, donations and microtransactions and can see how it's potentially a much bigger threat to the dominant players and models than people realise.
It's not even technically impressive. They're literally using Ethereum as the backend database so the guy running it can say "Blockchain!!" a lot, 'cos he's a hodler. I tracked down the details: https://davidgerard.co.uk/blockchain/2017/11/26/the-world-fo...
The programme does great work! But nothing whatsoever about it is Good News for "blockchain", except for PR purposes.
The news of course benefited from the "blockchain hype" but if the outcome proved to be as expected, real people got real help and the tech did the job just fine, then aren't we bikeshedding by arguing it?
This claim seems a stretch.
How can you not require the basic elements of a "blockchain ecosystem" to be in place in order to actually exchange vouchers based on ETH for food?
>> by giving [refugees] cryptocurrency-based vouchers that could be redeemed in participating markets.
Can anyone explain what value was specifically added to this project by basing these vouchers on a cryptocurrency?
The vouchers are 100% digital and unique.
Does the system require a working power grid?
I briefly worked with a startup whose founder is a Syrian refugee. Smart-phones and crypto wallets is what allows many of them to survive.
(I'm genuinely curious) what kind of coverage across the globe are we talking about here?
Things have obviously come a long way, it's not that long ago that the UNHCR was talking about "water, sanitation and hygiene".
More infrastructure questions: does the system also require a working internet connection? If so, when the internet connection goes down, can vouchers no-longer be "redeemed" until it comes back up?
Double-spends can only be securely verified once the transaction is processed on-chain but keeping track of nonces and signatures can be done with a secondary (off-chain) system which is easy to do with a limited population.
The Suntainers we built have WiFi and GSM included so that transactions can be relayed along the ground network.
You are correct though, that it's not an across the board improvement because of the additional required infrastructure.
Let's not forget that "simple" often beats "complex".
I'm still not sure what blockchain actually brings to this particular use-case, compared with a digital yet non-blockchain-based alternative.
The way this discussion is going I can't help but think of Ernesto Sirolli's talk[0]
To put it another way, are the refugees themselves demanding "incorruptible and unfalsifiable", or are they actually just hungry?
[0] https://www.ted.com/talks/ernesto_sirolli_want_to_help_someo...
The demand for a unfalsifiable and incorruptible digital record comes from the NGOs and government organisations who want to make sure their funds are being used to feed the needy not the insurgents that often get into the camps.
I have only a partial view of what life is like in one such camp. What I'm told and have seen to some extent is that people who are in such a fragile position trust no one and will act on their basic survival instincts, which sometimes makes the life of those trying to help them very hard.
What I'm trying to say is that if we sent dollars into the camp, you have no idea what people would do for them...
Won't the insurgents just take from the needy, once the needy have had their iris scanned and redeemed their "unfalsifiable and incorruptible digital record"?
Someone's already mentioned the $5 wrench up-thread...
Not an ideal solution for us perhaps, but given the context I assure you no other solution was even remotely adequate.
It's not a PoC as far as they're concerned - they think this is the real system, and they've been trying to recruit new participants, and every one has declined. They don't seem to be asking themselves why this is ...
In every production case I've seen - and I've been watching closely for years - the blockchain bit is an extra that doesn't do anything better than alternative technologies would, and often does worse.
I guess should have picked up on this claim sooner, but when trying to feed refugees with a digital blockchain-based voucher system, surely you have to send pallets of food as well?
https://github.com/jpantunes/awesome-cryptoeconomics#attacks
There is nothing a blockchain can do to prevent a stray bullet from harming you or a wrench breaking your knees. What cryptocurrencies can do is create a layer of abstraction between account owners and accounts /wallets, so individuals have plausible deniability and the chance to make a run for it. It's slightly better than a pin or password protected card that you must carry with you.
Except it appears that every refugee in the camp is going to have to register if they want to register to receive and exchange tokens for food, and everyone is going to be allocated funds via tokens (weekly? monthly? there must be some cycle), so there's basically no deniability at all, and the abstraction is pretty much worthless.
Once your hypothetical insurgant has sourced a $5 wrench, what's to stop them grabbing anyone in the camp on the day tokens are distributed, marching over to the food distribution point, and "helping" the token holder make the required withdrawal?
There will also be theft, it just will be of goods, not tokens.
A cynic might think that the NGOs and governments will just dismiss these issues as the refugees' problem. "We saw that all funds were distributed to the correct recipient. because blockchain!"
Life will find a way. It's not always the way you expect.
[0] https://www.theguardian.com/us-news/2016/aug/22/ramen-prison... [1] https://www.theguardian.com/society/shortcuts/2016/aug/23/wh...
I'm not saying that having an ICO will make your company a success, in fact as far as I can see the average survival rate for blockchain startups is in line with any other startup, bootstrapped or IPO'd
There have been thousands of ICOs around the world and companies such as Statis use FUD and lies to scare customers away from competitors. I'm involved in the space as you can probably tell and I assure you this isn't even the most underhanded tactic I've seen so far.
That makes a lot of sense, because it's a great way to sell insider trading.
Not sure if they are doing an ICO though.
Can someone please explain how/why readers would pay for the content? That's the important part, isn't it?
How? Readers can pay newsrooms for content using a debit/credit card or purchasing and sending CVL to the newsroom.
Why? Because they like the pieces coming out of a set of newsrooms and want access to that type of content.
Effectively, journalists end up running their own newspaper, but that newspaper is a subsidiary of a parent company that is hands-off for content but not for governance (which just means it's not totally hands-off for content). This newspaper would compete against other subsidiaries of the parent, and would have a certain percentage vote on what other subsidaries exist. Moreover, journalists would often be paid by selling their stock options in the parent.
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Obviously, the hypothesis here is that such a direct connection between journalist and reader will lead to higher-quality content then can be found at the MSM rags. I'm agnostic about whether that is the case.
In Italy we had cooperatives running newspapers and magazines as long as I can remember, doesn't this happen elsewhere?
I _think_ the advantage of Civil might be that you get to pay directly a journalist rather than the group, but I'm not sure it's a big improvement.
Whether these clickbait factor or article quality depends on the journalist and audience as well as the model, but all of these approaches seem much closer to the ideal of helping journalists earn by the popularity of their output than a startup paying part of journalists' salary in tokens whose main utility according to the white paper appears to be votes to censor/censure other publications for ethics violations.
The unique (not that this is good or useful) thing about purchasing CVL tokens is that it allows you not only to pay for the articles you want to read, but allows you to vote on how the Civil constitution is applied and thus how existing and newly formed newsrooms are shaped as well as affording you the opportunity to start your own newsroom (I think, not certain about this).
My explanation here and my explanation above doesn't in fact explain much of anything. Again, assuming blockchain/[insert buzzword] has wings, we won't really understand much of the how or why until clear use cases begin to dominate.
When Morse was trying to convince Congress to fund his endeavors, it was only after the second attempt they just gave him some money to make him go away (though, there were a couple Congressmen who really pushed for supporting him). When Morse had a telegraph line constructed in D.C. and running north (40 miles?), people still didn't understand the how when a message could be sent by telegraph faster than by a messenger sent south on the train. People still didn't grasp the why until criminals that previously had used the trains to elude police, began to get caught. Even then, it was still difficult to understand because it stood outside their conceptual framework for understanding/interpreting the world.
Not that the crypto stuff actually has wings. I'm emphatically agnostic.
In other words, censorship is embedded in the platform.
The only real rebuttal to your point is that journalists have effectively always been censored, to a degree, as the market so demands. Assange is perhaps the least censored, if not totally censor-free, but I'm not sure his model of censorship-free journalism is particularly scalable.
Crypto whitepapers, even read charitably, are difficult to interpret and not because what is being said is too complex or something.
It starts with a Token, a Token Curated Registry and micro-payments / paywalls..
The token has a double purpose: - Allows token holders to vote on which news sources should be in the Civil registry (ie, the trustworthy news sources). - Allows token holders to pay for content using micro-payments to access articles (ie, think Brave browser and Metamask enabled paywalls)
The token curated registry is basically a whitelist of news sources/ agencies / newsrooms that are trusted by the token holder community + this organisation dubbed the "Civil Council" (veteran news and media people associated with the project) consider to be trustworthy in their reporting / fact checking etc.
The plan seems to be for people who consume media to pay for content deemed to be of high quality by accessing the traditional sites / platforms (ie, unlike FB the plan is not to make a profit by aggregating other people's work in your own platform) with a type of "paywall" that requires a payment in civ tokens.
Hope this helps, but if anyone wants to discuss the cryptoeconomics of TCRs and how this primitive can improve the signal/noise ratio in polling or voting systems... let me know :-)
"""with a type of "paywall" that requires a payment in civ tokens""" In my opinion this is the most important part. Why would the Civil paywall work better than a non cryptocurrency based paywall?
Especially, if they want to accept regular payments as well?
They seem to be focusing on the wrong problem - how to govern a registry of news sources. While the real problem is how to get readers to pay for content.
I think the idea is that people feel that news sources can't be trusted in general so don't want to pay for access to a "news" article in particular. The idea of the registry is then to represent social validation by a community incentivised by their own selfish best interests (ie the token would appreciate hence they can resell for a profit...) to be accurate and judicious about their curation efforts.
The paywall tech could be something like what SpankChain is doing for cams, for instance. Technically it's an interface that allows token holders to sign a message to access a content URI by placing the tokens in a state-channel contract. If the consumer does "enter" the site, the tokens are deduced, otherwise they remain available for future use. Users should be able to pay with fiat but behind the scenes the balance would still be kept in tokens for the payment infrastructure to remain trustless.
(caveat: I'm speculating on a solution that doesn't exist yet and I'm not involved in building)
This just leads to censorship by the most powerful users in the system.
Starting with the game theory: If the TCR shows a specific bias (ie: political inclination) or some form of censorship, less people will want to own the token because the "fairness" promise is broken and that should reduce the token price.
If the curated items (newsrooms in this case) have low adoption (few people use tokens to purchase viewing rights) then the tokens will lose value too.
For token holders this should motivate them to be judicious in their curation efforts.
The voting mechanism also plays a significant part on the whole system. Traditional TCRs use a partial lock commit reveal scheme that allows us to find the Schelling point for a challenge.
Personally I'm quite partial to other voting systems that reduce the impact of token ownership disparity like the one Glen Weyl, Buterin and others have called "Liberal Radical" and its simpler root the quadratic voting mechanism. The way this works is that only the square root of voter's balance counts as voter's voting "weight". So 1 vote costs 1 token but 2 votes cost 4 tokens and those with less "power" have a higher representation relative to their balances.
edit: typos
The Civil Constitution [1] has no guarantee of freedom of speech. Instead they say they are "committed to the ethical practice of journalism," which is open to be arbitrarily abused by the majority of voters, irrespective of the voting system.
I don't actually understand why there is any voting at all.
The author of the original article says he believes that Civil's leadership has 'good intentions" but if they can't understand that their system will not solve the problems they set out to solve, then perhaps they don't deserve to gain the funding and attention they have actually managed to get.
[1]https://docs.google.com/document/d/178BBxXh60bEsFN5E5AYaZnej...
Don't forget that some form of voting is necessary for the token holders to have a say in the governance of the business. That's one of the premise of blockchain native businesses, the decentralisation of equity and power.
The voting and incentive mechanisms are the cryptoeconomic properties of the project and what I can discuss intelligently. The Civil constitution is out of my scope but I trust the incentives are there to allow high quality media to enter the list regardless of political bias.
That's not determined. They may well gain credibility by rejecting alternative views.
>Don't forget that some form of voting is necessary for the token holders to have a say in the governance of the business.
Bitcoin doesn't have any governance, and it seems to work fine. Adding governance layers just seems to lead to more problems.
The journalists have been paid their tokens, so theres already tokens in circulation, why does it require civil to make a sale?
Surely that's worse from the journalists point of view because it increases supply of the tokens.
Surely it is also worse for readers. I want to support journalists by buying their tokens, not support Civil by buying theirs.
But that just brings up more questions. The flow of tokens in one way. I give money to journalists to buy their tokens. What do I do with my tokens now? Do I give them back to journalists, maybe in payment for articles???
When the public sale and hype didn't happen, they were out of pocket.
I presume yes, that you use the tokens to pay for articles, and also that there is a speculative market in the tokens, like with other cryptocurrencies - i.e. it's all a gamble.
I don't really see why civil needs to sell any in this situation.
Isn't the whole point of 'the blockchain' to avoid having to trust 3rd parties.
Also please don’t cheapen engineering jobs. Salaries would he lower if COL was lower in the biggest tech sectors (NYC, SF, Seattle). It would also be lower if engineering work was easy, but turns out plenty of people are either not interested or unable to hack it.
But more than that - crypto is essentially a kind of late-capitalist faith-based cult founded on the premise of the holy alchemical transforming power of libertarian economics.
So I have a cynical suspicion there's probably significant overlap between the people who settle for the below-bargain-basement-rates offered for content marketing "journalism" (marketing >> journalism) and the people who believe so fervently in crypto they're happy to be paid with a promise.
It also implies that maybe you won't get rich. So these journalists didn't get rich. They made a gamble and lost. End of story.
I have little idea what will happen here, I don't know any more about the story than presented in the article, but an awful lot of securities sellers have gone to prison despite their customers being aware in theory that their investments might fail. If there's any merit to the claims, this is certainly not the end of the story.
Journalists must have known they are gambling if they don#t receive real money for their work. If not, they were incredibly naive and perhaps have learned a valuable lesson. Namely, don't rely on empty promises.
The article mentions stock options. Stock options also don't always pan out. It rather feels as if these journalists feel entitled somehow to their riches, as they have seen their brothers in tech receive. But they forget to think about the people in tech who toiled in startups that failed and who also received nothing.
If they misrepresent the risks, if they issue more tokens than what they said, that's all fraud.
"you may get back less than you put in" isn't carte blanche to fleece the investors.
Once again, no idea if this is true. But suggesting there's no indication is disingenuous.
I still think it is like startup options: people have to learn that if they want to earn x, they should put it into the contract, and not be satisfied with a vague promise of possible riches in the future.
It is so basic that I find it hard to sympathize.
Issuing stock options and following all the rules of SEC designed to reduce (though, naturally, not eliminate) fraud is legal. Issuing promises of "maybe get rich" without following this bare minimum of requirements is a crime.