Civil says the future of media is blockchains and cryptocurrencies

Plenty of startups are trying to reinvent the news business by adding features such as micro-payments or mobile video. But a startup called Civil is trying to take a quantum leap beyond these efforts: It’s not just inventing its own platform for news and journalism, it’s also inventing its own currency.

Civil, 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 cryptocurrency, a system of “tokens” that will both fund the development of the platform and compensate writers and editors.

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What Civil wants to build is a combination of a publishing tool or platform like Medium—where anyone can post content and reach a broader audience—and a crowdfunding system like Patreon or Kickstarter. But all in a place that has been designed specifically to support independent journalism.

Cryptocurrency, he says, makes that kind of funding easier than it would be with traditional payment systems, and it also gives members a stake in something that could (theoretically at least) increase in value.

“With open governance and crypto-economics, we can create a sustainable place for journalism —even the kind of local, policy, and investigative journalism that has been most eroded,” the company said in a white paper published online in October. “Decentralization is the key to a free and independent press.”

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When talking to journalists about why they might want to use Civil, Iles says he tells them the platform “offers them the ability to find journalists and 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.”

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, or a percentage of the overall number of tokens received by users for the finished article.*

Civil wants to build a combination of a publishing tool or platform like Medium and a crowdfunding system like Patreon or Kickstarter—but designed specifically to support independent journalism.

It’s a little like if a newspaper publisher gave its journalists a share in the company in addition to their salary, except in the case of Civil they both come in a new kind of currency—one Civil hopes will provide a lot more value than shares of newspaper companies typically have.

Those tokens also allow users of the site to support the projects or writers they like. And groups of users can come together to propose a topic that needs reporting and then put up a pot of tokens to compensate any journalists who volunteer to do it.

Cryptocurrencies have become popular of late, to the point where almost every day there are breathless 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 the public.

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

“I used to have to start conversations with ‘Have you heard of blockchain?’ Now everyone’s heard of it,” Iles says. “But the downside is that it has become associated with hype and the crypto bubble.” The bottom line, he says, is that cryptocurrencies are just software, and much like the Internet itself, they can be used for both good and bad things.

Cryptocurrencies are a computer-generated alternative to traditional monetary systems, which rely on governments to back them. Bitcoin, the first cryptocurrency, was created in 2009 by a programmer named Satoshi Nakamoto (a name widely believed to be a pseudonym). Now there are dozens of variations, including Ethereum, Litecoin, Ripple, and Dash.

The monetary value in a cryptocurrency 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 anyone.

This way the users of a currency become the ones who determine whether the system is working properly, not a central bank or government. While the system is transparent, however, it is also anonymous (or pseudonymous), which means it could help protect journalists who are writing about controversial topics or working in dangerous locations.

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 journalists the company is in the process of signing up as contributors—an ownership stake. And Civil tokens will also be used to pay journalists who distribute their content through the platform.

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

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“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 [Facebook and Google] 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, onto a crowdfunded model.

“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.

Iles said Civil is also talking to a number of other independent journalists 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 cryptocurrency and crowdfunding model.

“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 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 have that many eyewitnesses.”

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.

“We could remove the ability for billionaires and advertisers to threaten what people write anymore,” 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.

Creating good content and building a community of users, Iles hopes, will increase the value of the underlying tokens.

In the same way crowdfunding 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” related to journalistic principles, says Iles. “We want to decentralize the adjudication of those kinds of decisions to the community.”

*An earlier version of this article said writers might be compensated based on the increase in value of Civil tokens over a period of time following the publication of an article, but in most cases writers would get either a lump-sum payment or a proportion of the overall number of tokens received from users.

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Mathew Ingram is CJR's chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in The Washington Post and the Financial Times as well as Reuters and Bloomberg.