An Early Bitcoin Believer’s Bet on Blockchain Journalism

For journalists, the idea of publishing on a blockchain platform offers some allure, first and foremost the idea that archives are impervious to the meddling of revenge-bent billionaires. But for Civil, the journalism platform that backed the launch of several media outlets this summer, blockchain represents something bigger: a possible alternative to journalism’s failing business model.

Civil launched in 2017 with a $5 million boost from ConsenSys and a white paper that outlined a complicated but high-minded governance system for subscribers to support meaningful journalism. Its standards—that news be fact-based and verifiable, for instance—are detailed in the Civil Constitution and enforced by the community and the Civil Council, led by various journalism standard-bearers like former NPR president Vivian Schiller and professionals-turned-academics from Columbia University’s Graduate School of Journalism.

The media outlets, known as newsrooms, operate as independent entities. But all use a common consumer token called CVL to stake the newsrooms—each must put up $1,000 worth of CVL to get started—and provide a mechanism for making sure each publication abides by the constitution. The Ethereum-based currency is used to create new publications, compensate individual journalists, or fund the work of newsrooms, like the hyperlocal Block Club Chicago or the immigration-focused Documented New York to forego advertising. The CVL token empowers audiences to challenge journalism that doesn’t meet community standards—Civil’s answer to “fake news.” Newsrooms that are found to have violated standards must forfeit tokens to challengers and can be shut down, while challengers whose claims are frivolous lose tokens.

The CVL token marketplace opens in September, but only to buyers who can successfully pass a quiz that indicates to Civil whether they understand the risks associated with cryptocurrency. Civil has also hard-capped the value of CVL tokens at $24 million, discouraging investors of the get-rich-quick variety.

One of Civil’s best-known participants is Maria Bustillos. Bustillos, long a crypto-enthusiast, is the founding editor of the Civil newsroom Popula, which describes itself as an “alt-weekly…local to the world.” Bustillos spoke with BREAKER about her hopes for what the crypto-economy can do for journalism.

What does Popula being on a cryptocurrency-driven platform mean for the audience?
A lot of it is free. But if you’re a reader, you will also be able to get currency from your participation. We plan to create a system where you can only comment if you’re a subscriber, and it will cost some tiny bit of money to make a comment; all your comments would also be able to gather tips. We also have a plan to pool all of the tips from comments and return some percentage to the whole subscriber base so activity on the platform benefits everyone who subscribes, even passive readers. When I came up at The Awl, there were so many pieces I wrote that were immeasurably enriched by the conversation that grew up around them.

But that feature is not available yet?
These things are planned. It’s going to take awhile for us to harness all of the smart contracts that we need. We can’t really tinker with it until the token is live. We have plans for a bazillion kinds of experiments like this that will bring readers into the economy.

"Imagine what it would be like to start your career when you’re 21, and you can stack up all these pieces that people still read. It’s sort of like the royalty system in the music industry."

How will the cryptocurrency angle potentially change the game for journalists?
If you’re a journalist and start your career, you publish all these pieces that people keep reading. They wind up on college syllabi, or some famous person whom you profiled dies or becomes extra famous because they get a Nobel Prize. The example I like to give is Frank Rich. He’s one of the people who made me want to do this for a living. He wrote a magisterial piece at New York magazine. He obviously worked on it so hard. I finished it and I thought ‘man, if I could send this guy ten bucks, I would do it right now.’ I just wished I could leave a token that it meant something to me.

Imagine what it would be like to start your career when you’re 21, and you can stack up all these pieces that people still read. It’s sort of like the royalty system in the music industry. If you’re successful, it really starts to look like a whole new payment model, and this is what we’re trying to do. I want to demonstrate what’s possible. Maybe this is just a rough draft of what others will perfect later, but we’ve got this opportunity to mount these wild experiments.

The economy of it is deeply, deeply important to me. I love journalism, I love Popula, I’m really devoted to this thing. But as much as I love Popula and I’m going to crawl on broken glass for Popula, that platform is more important to me. The cryptoeconomy is more important to me. It’s the most important thing we’re doing because we’re trying to set a new business model for this industry.

Participating in Civil’s crypto-economy empowers users in other ways, such as challenging a newsroom’s right to exist on the platform, or challenging a particular newsroom’s content for violating standards. Could you walk me through that?
Suppose you have a hate group that decides it wants to publish on the platform. They have to go through a process. They stake their required amount of Civil tokens [$1,000 worth] and there’s a certain period for review. During that period, anybody on the platform can challenge the publisher’s application, which includes who is running it, what they intend to publish, and some clips [examples of published articles]. Everybody has a chance to evaluate it, and anybody can challenge [the application] by putting up a certain amount of CVL. There’s a period where challenges can be evaluated by the whole community, which uses tokens to vote. Whoever is on the winning side is awarded tokens.

It works much like Wikipedia does, where there are different layers of governance. We’ve tried to implement similar checks and balances with the Civil Council, which will have more power at the beginning than it will later, as the community grows and becomes more robust.

How does the token-holding community enforce standards?
If a newsroom gets challenged and voted down, they have to give up their stake to be distributed to the participants who voted against them. There’s a risk. So there’s an incentive to not be a jerk.

What does this potential for financial harm mean for you as an editor?
I feel like it’s how it should be. We should be mindful of not violating journalistic standards. It’s also in line with my experience in this industry. If you publish something irresponsible, you’re going to face a resource hit. If you publish something irresponsible or upset people, the kind of hit that you take to your reputation automatically turns into a dollar figure. You won’t get as much work. This is a very reputation-based industry to start with, so it’s just sort of formalizing what already exists.

The value of the CVL token is capped. Doesn’t that diminish the potential financial incentive?
The purpose is to discourage some people who think they’re going to see some gigantic pop in the valuation and they can get rich quick, pump and dump. This would be really bad for us. The restriction part is to make sure that pool is responsible people who care about what we’re doing.

Participating in the crypto-economy has a high barrier to entry. And obtaining CVL tokens is harder still.
Civil and ConsenSys have taken the most conservative possible approach, so rather than just offering the token on the open exchanges, it’s going to take place in a know-your-customer environment. You have to pass a questionnaire.

How does this align with the ideals of decentralization and a more participatory form of journalism?
A decentralized environment can’t just spring up out of the ground. You have to start from a centralized point of planning. These precautions have been taken to protect against the bad actors and speculation that we’ve seen elsewhere in the ICO markets and in bitcoin. We need restrictions because we want people to participate in this thing—not because they think they’re going to make a buck.

You don’t trust the marketplace to sort that out?
No. That would be a disaster. If it’s just a bunch of crypto bros thinking they’re going to kick the thing over and not participate in it. It’s exactly the opposite of what we want. We want people to participate in the future of journalism, to use this token for a specific purpose. It’s not a money-making thing. It’s an economy to protect the First Amendment, which is not the same thing. I mean, it sounds crazy, but it’s a fact. I dedicated my life to this thing. I actually don’t give a shit if I make any money or not.

Do the people working with you feel the same way?
There’s so much to learn. We’ve had to learn all this crypto stuff. We’ve had to drive all the freelancers kicking and screaming through the token quiz. It’s a lot of webinars. It’s a fucking Powerpoint. You have to want to, but at the same time, I’m having the time of my life.

"The idea that blockchain technology can automatically solve all the problems in journalism is fallacious. It is not the answer; it’s the paper you could write the answer on."

Civil is funding many newsrooms. Does the ideal of decentralization become diluted if so many are backed by one entity?
I support the idea of this technology being used for a lot of different kinds of experiments and I think certainly none of us has a crystal ball about how things are going to work out. I intend to learn all I can from people who are taking different approaches from ours. The idea that blockchain technology can automatically solve all the problems in journalism is fallacious. It is not the answer; it’s the paper you could write the answer on.

There are a lot of approaches and publishing entities, editors, journalists. They serve different communities and have different kinds of readership. Some of the people publishing on Civil are nonprofit. Popula, eventually, will become a collective or a cooperative of some kind; we’re looking into employee stock ownership plans and different forms of ownership. But I think a lot of us are going to change our minds as we see how people make use of these things that nobody’s ever tried before.

The digital wallets and the cryptocurrency seem to be a hurdle for the general public, people who have never bought crypto before. It seems pretty weird and hard.
It sounded weird when people were saying you’re going to correspond with people on your telephone, or have a computer in your pocket.

I think it will be really fun for people to see they can get actual tips on their comments. That alone is going to interest people in cryptoeconomics. It’s sort of a different concept of what it means to read.

A separate part of this is how do we make money, who owns it, who benefits from ownership? If we can demonstrate that [paid commenting] creates a good result for communities and for readers, that’s a path that we haven’t really had before.

Are you compensating your writers in CVL tokens?
Originally, we had a sliding scale so the more risk you take, there would be a premium in participating. We’re really committed to the success of the crypto-economy, and we’re trying to encourage people. After launch it’s going to become less meaningful because the market is going to price the token, so that will change.

Is that a hard sell for your freelancers?
Some people like to roll the dice. Maybe they’re going to write a couple of pieces and think it would be a neat way to get involved with cryptocurrency. We’re holding their hands and helping them learn how to use wallets and exchanges. There have been a lot of takers. There are people who had to be cajoled and are terrified. There are people who think, well I’m getting paid cash and if there’s this extra bonus, they hardly care if they get it or not in crypto.

If you freelance, you know what this is like. Sometimes you’re motivated to write a piece even though there’s no money in it because you love the venue and you love the people and you want to write it. And on the other side of that equation is the thing that you don’t particularly want to write but they’re offering you so much money that you’re just like, “OK.”

There are quite a few people who understand that it would be nice in this industry to have alternative forms of ownership and new ways for things to get published. There are a lot of people who are like, I don’t like how this thing is going and I think it could be done better. So they want to support the experiment, even if they don’t understand every single aspect of it.

For your own compensation, are you paid in CVL or fiat currency?
I have chosen to take only crypto since last fall.

Was that a hard decision for you?
I’m very invested in this. I want people to understand that I mean what I freaking say.

I have explained and explained to people, here’s the risk, here’s the potential reward, here’s the resources that we’re going to have. We can band together and make a statement, even if this is just a rough draft. It will still have been worth it. Somebody’s got to make the first pancake, even if it comes out not round. That’s fine because we intend to keep going until we make a perfect one. Nobody goes into this business to get rich anyway, you know?

Not the journalism part. The crypto part they usually do.
It’s not a cryptocurrency deal. It’s a system for producing information. Very, very different.

It’s actually what I first saw years ago back when I first wrote about this in 2013: Woah! It’s a record-keeping system. It’s not money that’s important; it’s incorruptible records. That’s the first thing I saw. It’s like a Polaroid that was that sort of weird beige gray color and the picture’s coming up now. It’s amazing.