Token Economics


#21

According to Civil founder Matthew Iles: “Everyone who owns tokens will become a member of the Civil community, and will get the right to vote on the principles enshrined in the constitution and the adjudication of disputes.”

zareef1992’s Q: “And why would token holders attach value to these tokens specifically (e.g, are there any reasons for thinking that the same outcome could be achieved without use of tokens? Or via a centralised service provider instead of on a public network?)”

According to Civil founder Matthew Iles: "It has the potential to help realign the incentives that underlie the journalism business. Instead of having to cater to billionaire owners or a hedge fund, newsrooms like Popula can be supported directly by members paying with Civil tokens. Those tokens can also be used by newsrooms to pay writers (although that’s not a requirement).

The idea behind these incentives is that good and honest journalism will be rewarded, and fake or malicious journalism will be penalized. In addition to those benefits, the “distributed ledger” that is the core of a cryptocurrency is open and transparent, so that every transaction can be seen by all, and everyone who uses it has their own copy. That makes it difficult to tamper with, or at least makes it obvious when it has been."


#22

Concur with you. Crypto’s inherent economic nature will always attract profit-seekers using different loopholes and ways to derive profit without providing value. Especially with the lack of standard and regulations and technological maturity … Therefore will need more talented good people to outplay the “snakes”.


#23

This is an interesting point. I had a couple of follow up questions:

  1. Is there strong evidence to indicate that newsrooms (more generally, instead of as an exception) cater to views/interests of billionaire owners or hedge funds as opposed to the consumers of news, or what the interests of these owners or hedge funds are?
  2. If the newsrooms are now being paid by the token owners, does that not redirect the bias from that held by “hedge funds/billionaire owners”, to those held by the “citizens”? Does civil have any mechanisms in place to ensure token holders themselves are free from any adverse biases ?

On 1, I find some evidence to the contrary, so will challenge that claim.

Claim: Newsrooms in the US generally tend to cater to the interests of their owners, or hedge funds that finance them, and civil token can be used to better align the interest of newsrooms and consumers of news**

Analysis: The following research by Stanford economists attempted to identify drivers of “ideological slants” that newspapers demonstrate.

  • They developed a slant index which measures “the frequency with which newspapers use language that would tend to sway readers to the right or to the left on political issues”, and “focus on newspapers’ news (rather than opinion) content, because of its centrality to public policy debates and its importance as a source of information to consumers.”
  • They estimated consumer demand for newspaper, in which “a consumer’s utility from reading a newspaper depends on the match between the newspaper’s slant” - this is done using zip code-level data on newspaper circulation, which shows that, e.g., right-wing newspapers circulate relatively more in zip codes with a higher proportion of Republicans, even within a narrowly defined geographic market.
  • “Treating newspapers as local monopolists”, they “compute the slant that each newspaper would choose if it independently maximized its own profits. Variation in slant across newspapers is strongly related to the political makeup of their potential readers and thus to our estimated profit-maximizing points.” - This suggests newspapers are indeed catering to what their consumers demand from them
  • They “find little evidence that the identity of a newspaper’s owner affects its slant. After controlling for geographic clustering of newspaper ownership groups, the slant of co-owned papers is only weakly (and statistically insignificantly) related to a newspaper’s political alignment. Direct proxies for owner
    ideology, such as patterns of corporate or executive donations to political parties, are also unrelated to slant” - This suggests that newspapers are not heavily influenced by the political views of the owners

Based on the evidence, I do not think Civil is solving a relevant problem here.

Note:

  • One could argue that there is media bias in specific jurisdictions which tend to reinforce the political ideologies that are already held by consumers. This would makes it difficult for consumers to have a more balanced view which would have been a more pertinent value add. I would be keen to learn if Civic attempts to address that problem instead.
  • One could also challenge the relevance of newspaper circulation given the continued growth of digital media. It would also be interesting to learn if Civic attempts to direct news traffic in a specific way.

Stake: Challenge - 50 CRED


#24

zareef’s Q1. Is there strong evidence to indicate that newsrooms (more generally, instead of as an exception) cater to views/interests of billionaire owners or hedge funds as opposed to the consumers of news, or what the interests of these owners or hedge funds are? A1. Yes. According to Institutional Investor: “Since 2010 hedge funds and private equity firms have been targeting legacy media companies. The investors acquire newspapers at low prices, then cut costs in the hope of selling at better multiples. But the state of the news business hasn’t improved, leading some firms to continue making cuts, leaving fewer and fewer reporters in place.” Another evidence by the New York Times “Today, members of a new Gilded Age are again in control of many of the country’s most venerable media outlets. Only now, it is tech entrepreneurs, casino magnates and hedge fund billionaires who are seizing control of the press, simply by writing a check.”

Q2. If the newsrooms are now being paid by the token owners, does that not redirect the bias from that held by “hedge funds/billionaire owners”, to those held by the “citizens”? Does civil have any mechanisms in place to ensure token holders themselves are free from any adverse biases? A2 Yes, that’s why Civil has similar mechanisms as TruStory. Everybody in the community who has CVL tokens can stake/vote if a news on Civil is true or not. They also have “the Civil Constitution, which is sort of their code of standards and ethics. If anyone in the community of token-holders feels that a news organization does not meet the standards in the constitution, […] they can challenge that newsroom by staking tokens and that triggers a vote.” According to Coindesk “After a newsroom is started, token holders can challenge any newsroom’s adherence to the constitution at any time, but they’ll have to stake a lot of tokens, which they might not get back should they be proven wrong, to do so. Other token holders will be able to vote their tokens in these challenges.”

FYI: It’s Civil, not Civic. Civic is a cybersecurity blockchain startup.