Wednesday, October 17th, 2018

Civil’s token sale fails to hit target. What now?

As Civil’s cryptocurrency token sale drew to a close on Monday, it seemed highly improbable the project would make its $8 million minimum target, and in fact it did not. Civil, which is building a blockchain-powered platform for independent journalism (and already hosts a number of newsrooms, including the Colorado Sun and Popula), missed the target by a wide margin, raising less than $2 million from a little over 600 people. But co-founder Matthew Iles said in a Medium post on Tuesday the project is going ahead with a modified token sale, one that will be “much simpler” than the original, which was widely criticized for being overly confusing.

“The CVL token sale didn’t succeed. We’re disappointed, but we’re as committed as ever to seeing Civil out in the world,” Iles wrote. “A new, much simpler token sale is in the works.” In the meantime, the existing newsrooms will continue to publish, thanks to $3.5 million in grants from ConsenSys, the blockchain developer and venture fund that is also an investor in Civil Media Co., the for-profit arm of the project. ConsenSys—founded by Joseph Lubin, a co-founder of Ethereum, the cryptocurrency Civil’s tokens are based on—wound up buying more than 80 percent of the tokens that were sold in the latest offering.

Existing buyers now have the option of asking for an immediate refund of the money they used to buy tokens, getting an automatic refund on October 29, or retaining the tokens and remaining part of the Civil funding drive. Some token holders had already asked to exercise the latter option, Iles wrote. “I write to ask if you can ensure I do not get a refund after Monday’s ICO closing date irrespective of the outcome,” Iles quoted one token holder as saying. “I wish my funds/pledge to be redirected into any future CIVIL plans once announced.”

So what went wrong with the token sale? Overly ambitious goals given the current state of the cryptocurrency market—which some believe is a bubble—combined with what even some Civil staffers have told CJR was an overly time-consuming process of buying the tokens. To the usual virtual wallet and token exchange, Civil added a quiz on some of the finer points of cryptocurrency (such as the difference between a “hot” and “cold” crypto wallet). In part, Civil says this was done to weed out speculators and others who might not be in sync with the goals of the project. But those methods also seem to have weeded out a lot of potential supporters.

By the time the company decided to allow purchasers to use “fiat” currency (i.e., US dollars) sent directly from their bank accounts, it was too late. Yesterday, after the failed token sale, Civil staffers remained determined to raise money to operate the platform and to fund the Civil Foundation, a non-profit that also administers the Civil Council. The question is: Will there be enough interest in helping, now the first attempt at funding has failed so publicly?

More information on Civil:

  • A new media ecosystem: For an in-depth look at what Civil is trying to build and why, see CJR’s feature on the project, based on interviews with all of the founders and senior executives, including Matthew Iles and Vivian Schiller, a former senior executive with Twitter and NPR who is now running the Civil Foundation.
  • Confusing and time-consuming: John Keefe, a developer with Quartz, wrote a piece for the NiemanLab in which he described the 44-step process he had to go through in order to buy Civil tokens, including uploading a copy of his driver’s license and passport to verify his identity and filling out the quiz on cryptocurrency.
  • A new constitution: One of the key documents in the Civil ecosystem is the Constitution, which the project has been crowdsourcing via an open Google Doc, as well as asking for input from media professionals in a series of symposiums both in the US and a number of other countries.
  • A council of advisers: Part of the non-profit Civil Foundation is the Civil Council, a group of media experts including Emily Bell, director of the Tow Center for Digital Journalism at Columbia, law professor Ellen Goodman, Atlantic magazine Executive Editor Matt Thompson, and former Wikimedia Executive Director Sue Gardner.
  • Also a movie studio: In addition to Civil’s blockchain-powered platform for journalism, the company has also launched a number of other ventures, including Civil Studios, which it said will produce original content, including documentaries and podcasts.

 

Other notable stories:

  • A study of “news deserts” by the University of North Carolina’s School of Media and Journalism shows more than 1,300 communities across the US have virtually no local news coverage to speak of, having lost their newspapers. More than 2,000 counties now have no daily newspaper and 171 have no newspaper at all.
  • Shelley Hepworth writes for CJR about the crisis at the Australian Broadcasting Corporation, that country’s public broadcaster, where the former managing director was fired halfway through her five-year term, after the chairman of the ABC board tried to pressure her to fire one of her reporters.
  • Lesley Stahl, a veteran of the CBS news show 60 Minutes, said earlier this year that Donald Trump told her he uses the term “fake news” to discredit journalists he disagrees with. And yet she let him do exactly that in a recent interview without challenging him, says The Intercept’s Mehdi Hasan.
  • Twitter has suspended about 1,500 accounts that were either created by or are associated with a troll campaign that started on the site 4chan, according to The New York Times. The accounts were fabricated to look like liberal and Democrat activists and spread misinformation about the midterm elections.
  • James Wolfe, a former senior staffer with the Senate Intelligence Committee, pleaded guilty to lying about sharing information with reporters. Wolfe admitted he lied to the FBI about exchanging information with Ali Watkins, who was then at BuzzFeed and is now a reporter for The New York Times.
  • Facebook told TechCrunch it will start down-ranking sites that scrape content or republish stories with little or no modification. Such sites will show up less prominently in the News Feed, the company said. Facebook also recently said it will remove posts that contain misinformation about voting.
  • Democratic Senator Heidi Heitkamp apologized Tuesday for a newspaper ad she published that included the names of a number of sexual abuse victims. Heitkamp said she found out later some of the victims did not agree to have their names used, and some of those named were not actually victims of abuse.