When I first started reading about blockchain, it was usually in conjunction with bitcoin, the digital currency used to value transactions on the internet. Blockchain is the technology that manages the database on which bitcoin transactions are stored, but confusion about it is widespread.
Blockchain can be described as a digital ledger that records transactions and documents any alterations to those transactions, making it possible for all steps in any process to be traced back to the original creator. The name comes from the idea that the transactions are blocks, with the ledger notations forming a chain linking each block to the previous one. Bitcoin is not underwritten by a central bank or governing body; its blockchain ledger consists of communally recorded transaction data that is reconciled by its network in 10-minute intervals.
Blockchain is more secure than databases maintained by only one authority, which are more easily hacked or compromised. Each user has a copy of the data, making the network so vast that it could survive a natural disaster or pervasive attack on its infrastructure. Also, to alter a block on the chain, a user would have to commandeer 51% of the computers in the network simultaneously and rewrite the entire history of each transaction in a short time frame, making it a very unlikely scenario.
The ability to cut out the middleman in transactions is one of the main reasons why blockchain could be an industry interrupter. In the sharing economy, Airbnb and Uber transactions could become peer-to-peer (P2P) payments, eliminating the need for the host platform. In buying and selling power on neighborhood microgrids, a third-party host energy company could be eliminated. In stock trading, P2P trades would eliminate the need for intermediaries such as clearinghouses.
Content and journalism also have the potential to be changed by blockchain, as practitioners meet the challenges of fake news. Civil “seeks to empower journalists and their supporters to engage more directly and transparently, with less reliance on middlemen (owners, distribution platforms).” Civil uses a blockchain application, Ethereum, to license content and ensure that newsrooms behave ethically. Civil sells tokens of a cryptocurrency, CVL, which readers can buy and use to vote on whether or not a particular news outlet’s content is fact-based and free of bias. As of July 2018, 13 news organizations—including the Associated Press and the niche publication Cannabis Wire—have signed up to be on the Civil platform.
Newsrooms stake $1,000 in CVL to participate, and they must agree to uphold a code of ethics called the Civil Constitution. Readers who feel that a newsroom is violating that code must stake $1,000 in CVL, and then CVL token holders vote to decide whether or not the newsroom can continue to be listed on the platform. Yael Grauer explained it on nbcnews.com: “If the newsroom is rejected, it loses its deposit, which is split between the challenger and the token holders who voted to reject it. If the challenge fails, then the challenger’s deposit is split between the newsroom applying and the token holders who voted to accept it. This process provides an economic incentive for CVL token owners to protect the integrity of journalism on the platform.”
Why is blockchain needed to promote ethical standards in journalism? Blockchain enables Civil’s content to reside in a secure database; it cannot be changed or altered unless a majority of CVL token holders agree. In an article on cnbc.com, Civil likened its system to a game: “spot the unethical newsroom, keep it off the platform, be rewarded if you do so.”
A laudable effort, for sure, but questions remain, according to Hannah Kuchler of Financial Times. She writes, “How will the organisation persuade enough people who are addicted to social media to instead crave ethical journalism—and pay for it? What happens to the Civil economy if the value of the token soars or plummets? And how do you decide and enforce a code created by a global community, with different definitions of ethical journalism and what constitutes political bias?”
Can Civil break the chain of fake news with blockchain? Stay tuned.