“Journalism”

What happens when a VC + institutional trading firm acquires a news publication? It’s no longer news. More on that later.

A huge problem we have with the bitcoin media space is that there is currently almost no fact checking [to be fair, it doesn’t appear traditional media is any better recently]. I’ve done dozens of interviews since 2014: the number of publications that have fact checked after an interview is one. The number of publications that have fact checked before publishing an article is countable on one hand.

It’s time to call the bitcoin/blockchain “journalism” space out for this.

Want better journalism in the space? Demand it! Start only using sites that publish fact-checked, fair, and spell-checked articles. When something’s clearly an editorial or op-ed but posted in the news section, point it out!

Yesterday Coindesk published an article with absolutely no fact checking done whatsoever, so it’s a nice little case study on what I’m talking about.

First they implied that you need reputation in Augur to trade or create markets on it [i.e. participate in 99% of the platform], when it’s completely the opposite! Markets are able to be created in any subcurrency on Ethereum.

“Augur’s decision to forego ether” is a clear misunderstanding of the consensus system: Augur will support any subcurrency on Ethereum [long term I think it’ll mostly be stablecoins, not ether that’s used to trade]. You don’t need rep to trade in markets or create them [which is what any mainstream end user would do].

You do however need reputation to report on, resolve markets, and earn a portion of the fees for reporting. Using ether to resolve them isn’t secure because a) it’s almost impossible to reason about security due to the supply being used for things other than reporting/resolving events and b) the fact that it’s not limited.

Using something like reputation also ties the value of the reporting mechanism directly to volume/fees through the platform, using ether that wouldn’t be the case which makes the platform much easier to attack [because it’s being used for many other things, which allows an ether whale to have an outlandish effect].

In other words, if a whale controlled 20% of rep it likely wouldn’t affect the consensus system much, if a whale controlled 20% of ether and we used ether they’d almost certainly control the whole thing. The other huge issue with using ether is it is not practical to fork Ethereum: it’s very costly [a very real cost as we’ve seen this summer]. If Augur has an issue we want it to be able to fork without forcing Ethereum itself to fork, and if our consensus is in ether we can’t do that. Whereas if reputation itself is able to be forked the consensus backstops are much more robust.

We finally arrive at regulatory concerns, where a source named by solely their last name is listed. Googling the name he appears to run a small trading firm, which is slightly suspicious that there’s no disclaimer. This is something else the space really needs, real financial journalism [disclaimer: I own rep and haven’t sold any]: see, not that hard! Why not interview someone who’s actually a known regulatory/legal expert in the space? Or someone who’s involved with open source software law, or with stats.com style reporting if interested on the reporting side of regulation?

Whenever you see something, ask “cui bono?” My motivations are clear. What are Coindesk’s? I’ll give you a hint: a self described VC and institutional trading firm acquires a news publication, what do they do? You figure it out.

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