Disclosure: I am not a TruStory employee, nor am I affiliated with anyone else discussed in this thread. I am brand new to the crypto community and am here to learn and seek the truth, period.
With all that said, it’s clear that The Block, Mike, and Arjun stand by their piece and the primary thesis that the Civic token is not necessary. We have yet to hear a strong rebuttal from Vinny against that.
So let’s cut through the fluff / straw man argument and focus on the story’s explicit claims, shall we?
Note: in the TruStory app, all claims are implicitly True until proven False. Users can back or challenge a claim and provide evidence. If enough challengers are present, the claim would enter a community voting period, after which, the claim would remain True (Confirmed), or declared as False (Rejected).
Claim 1: “Vinny raised a 2016 seed from blockchain investors to “secure SSN”…without any explicit goals to incorporate a token or blockchain at the time”
The author links to a Coindesk piece with quotes from Vinny:
Lingham said there is no immediate connection between Civic and the blockchain tech space, he sees opportunities for the startup to leverage the emerging technology: “There’s a blockchain play here for data security. The blockchain is probably the most secure place to store information right now”
However, Vinny states on Twitter (after the post was published):
the company was started in 2015 and built natively using the Bitcoin blockchain. The assertion that we pivoted to blockchain in 2017 is patently false
Status: If Civic can provide hard evidence for that argument, this claim would be
Rejected on TruStory. Until then, this claim is
Confirmed as Vinny himself stated in 2016 that there was no immediate connection. He seems to negate himself with the follow-up tweet.
Claim 2: Vinny stated in 2017 that the CVC token, initially issued on Ethereum, was a temporary placeholder until the launch of Rootstock, a smart contract platform implemented as a Bitcoin sidechain
On 6/17/2017, Vinny responds to a “@civickey is on ETH now?” tweet stating “Temporary, until RSK is ready”
Claim 3: There is no compelling argument for why a propietary CVC token is necessary. They could use a fiat-backed token, bitcoin, or USD to address each of their use cases.
First, the author rebuts points made in the white paper:
“It can be used across any number of jurisdictions, retaining a single uniform method of settlement.”
– Author: “Bitcoin can do the same thing”
“Using a blockchain-based token makes it possible to perform settlements automatically and irrefutably within a smart contract”
– Author: “Bitcoin, Ethereum, and a number of other existing public blockchains allow for this too”
“Having a unique, specialized token for accessing identity services provides stability and shields the Ecosystem from extraneous considerations that can make other cryptocurrencies volatile”
– Paraphrasing author: That is not intuitive. Civic, themselves, fail to do that with their price down 96% from it’s all-time high.
I don’t think that’s a fair point with other notable cryptoassets like Ethereum also down 90% since peak. We’re in a bear market.
- “It makes it possible to manage incentives in a way that drives Ecosystem effects for the benefit of all participants in the Ecosystem”
– “virtually all of Civic’s ecosystem partners are traditional businesses which try to do business in relatively stable media of exchange like the U.S. Federal Reserve Note”
– “there’s no reason to believe that increased demand for the CVC token would “drive up the price of the token” as the users accepting Civic will sell their tokens in favor of more stable assets”.
The link is broken here but the author cites a paper from an institutional investor that argues for this point. Here’s a quote from the conclusion:
Public blockchain technology is an incredibly powerful engine for creating significant user surplus, but that surplus will go to users, not to token holders or miners. Investing in utility tokens is in the end tantamount to investing to own a bit of the currency used to operate a big, commoditised, perfectly competitive SaaS business that itself earns no sustainable economic rent. There will be some value there, but perhaps not much.
The author concedes(?) the following: “Perhaps it represents some new proto-money-Web 3.0-driven-global-paradigm-shift in the way that we maintain and transfer value, but I’m somewhat skeptical.”
Then, the author discusses 3 specific partnerships stating that Civic is simply a payment token for all it’s use cases, so it’s unclear why it’s necessary.
Vinny’s response: “the vending machines do need to have CVC tokens stored in their wallets to perform a ZKP using the network, to determine age when someone wants to purchase a beer.”
It’s still not clear why a token is necessary for a ZKP, as Arjun notes.
Iain Fraser (ex-Head of Engineering at Civic) also expressed skepticism around recent partnerships between Brave, Civic, and Rivetz, who all belong to the same ICO shop.
Unconfirmed, pending Civic response