Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Always warm, always sunny, sometimes Colorado. Today is January 19th, 2023. It's already an interesting year.
With the failure of DCG, it looks like they're starting to sell off assets. Something that came by my desk recently is that CoinDesk is either raising money or attempting to get acquired. I've been through the grapevine, talking to people, looking into things, and trying to figure out what the price is. It looks like the price is probably going to hover somewhere around 200 million dollars if someone were to buy it outright, or at least that's what they're asserting they're worth now. I haven't seen any books or financials, but I've heard that gross profit was hovering around 50 million. It would be interesting to see what the EBITDA is, what the ratios are, and the projections they have. Is that a 2021 number when everything was in the cocaine and hookers era, making great money? What does 2022 look like?
Interestingly enough, DCG acquired the asset in 2016 for 500,000 dollars. So, a 400x over acquisition is pretty interesting for evaluation. Now, why am I interested in an asset like this? CoinDesk, CoinTelegraph, or anything like that? For years, I've thought about what would make an elite media institution and what are some of the things required. As you know, we've been recipients of some extremely bad media, some just because they didn't take the time to really research and deeply get into things, and some because there is actually an agenda to defame.
We found out later that FTX gave The Block a large sum of money or agents of that organization to write articles in a certain direction. CoinTelegraph is owned by an oligarch, and there’s some shady stuff there. Everybody wants to have a media outlet and use that as a way to express influence in the space. "Okay, so our chain is great and this other chain is bad." My interest in the media side is broader; I would like to figure out how to get to journalistic integrity again.
You've probably seen, if you've watched my whiteboard videos or my AMAs over the years, concepts like veracity bonds, where when someone publishes something, they actually put money on the table. If it turns out what they've written isn't true or is inaccurate, they can lose the money they've bonded for it. Wouldn't that be amazing in journalism, where there's a financial incentive for people to actually fact-check the fact-checkers?
Every story could be an NFT and evolve live, allowing people to interact with the news. One thing that has always annoyed me is that a story will be published, and there's no follow-up. For example, I live in Longmont, Colorado, and there have been events like someone driving a car into a restaurant. I thought, "Wow, that's pretty crazy," but two years later, there's never been a follow-up story. Why did they do that? What was the point behind it? Did they go to prison? What happened? There’s no follow-up.
It would be really cool if you could view each story as a living object that people can interact with and ask for follow-ups. You could put money on the table for a follow-up, and you could link it to other similar stories, creating a universe of information around a particular topic. I thought it would be really cool to have a media outlet that is industry-specific, directly connecting to the top 100 blockchain projects. Each project could publish content regularly, say every two weeks or a month, about their ecosystem.
Of course, it would be segregated so people know that it’s content from those projects, but it would give a direct line of communication. You could also have a separate investigative journalism unit that goes deep on particular topics and has great technology for whistleblowers. The closer the projects are to the media, the easier it is for mid-level employees in those organizations to know who to talk to about crises and events.
There’s definitely a lot of cool stuff that can be done in terms of advertising. I've known this space for a long time. For example, Ned over at Steemit and the Hive guys have an advertising model that incentivizes content through a token. The BAT advertising model is another example. I think there's a huge design space to create an incentive layer for people to create content. If you could find a way to bundle community-driven content, community interaction with content integrity mechanisms like veracity bonds, and dedicated spaces for industry projects to regularly write, you could construct a really amazing media outlet.
The question is, what real value does CoinDesk as an entity have? They have a pretty good events unit, and it would be interesting to see the financials and how profitable it really is. Consensus is a huge conference, and they have a decent operation that Barry was able to finance to the point where they get a lot of readers and have significant impact. At 200 million, I believe it's a bit overpriced, so there has to be more to that number than where it’s at.
I could afford it if I really wanted to. I mean, I’m still one of the richest guys in the space, but just because you have it doesn’t mean you spend it. You can do more with less. It may make sense, if one wanted to make that kind of financial commitment, to take five or ten million dollars and actually start up a much more decentralized organization, incubate and grow it, and take it to a point where it would outcompete all of its near neighbors.
The other thing is, there’s no metaverse component right now in CoinDesk, nor is there a really good video side. They’ve been trying to build out those business lines, but they’re not really popular. A lot of partnerships could be made; for example, Messari could be more tightly integrated. I’ve known Ryan for years, and I think that would be a fun relationship to foster and grow. They’re mutually beneficial to each other, and Lace Wallet could benefit from having an information layer as well.
It is an interesting question and an interesting buy. Every now and then, something crosses your desk, and you have to walk your way through it and understand it. There is a question about objectivity. Given that Cardano and I are tightly associated, how would the organization be perceived fairly if I were to acquire something like that? Would any time there’s a pro-Cardano story, they say, "Well, that’s only because the Cardano people own it," or if there’s a negative story, is it because they’re going negative to remove the perception of bias?
I think the ultimate resolution is to look at stories with veracity bonds and community interactions. If every story is an NFT and lives in an information graph, with people constantly interacting with it, it gives people an incentive to ask questions and continue the discussion behind the story. It’s kind of a meta layer of journalism. If you have something like that, it would be a lot of fun. Also, if you have statefulness inside the system, it can remember prior stories, allowing you to look at the long-term track record.
One of the biggest issues we have with YouTubers in the industry—pick your favorite one, whether it be person X or person Y—is that they’ll say things that may not be true. It turns out perhaps the things they said were influenced by their financial relationships with either their own personal holdings or sponsorships. I won’t name names, but Max Keiser is a great example. He broke Ethereum on his show, Cardano on his show, issued his own token, Max Coin, and was one of the first to talk about Litecoin. He was quite friendly with the altcoin space, but somewhere something short-circuited.
Now, everything is a scam except for Bitcoin, and each person working in the altcoin space is evil and a bad person. He even compared me to Epstein because we took PPP money. It would be interesting not only to look at these stories and prognostications as objects but also to connect them to their origin and the level of accuracy behind predictions, prognostications, and positions.
It would also be very interesting to know the biases of the people who write things. What level of disclosures do you have? There’s the Nolan chart for politics, for example, but you could get much more extensive about these things and create a profile. If someone is far too biased on a particular topic, perhaps you pair them with someone on the other side, and they jointly author the article, allowing you to assess the bias and resolve it.
There are definitely things to consider. The concept of building trust in a centralized way and building integrity and objectivity in a decentralized way is a fascinating topic. The idea of CoinDesk being the organization to do that would be a fun thing to explore, but at that price point, unless the financials are phenomenal, it does seem overpriced.
We’ll see. It opens up a broader conversation about whether it should be a priority of the cryptocurrency space to aspire to build better journalism. The failure of FTX and the excesses of 2021 have revealed the need for better journalism. They’ve reached a point where rank-and-file everyday people should not trust the news they read. It’s simply not honest; the articles are not honest. Every single one of them has an agenda, and that agenda is not in your best interest. It’s in the best interest of a small group of people attempting to manipulate the markets for themselves or their unseen masters.
If we can build a better journalism layer, I think our industry could reform itself. This could extend into political journalism and other topics that historically have been dead ends. Nobody trusts the news anymore; it’s a broken institution that dug its own grave a long time ago. Anything to restore credibility, integrity, and veracity—whether through veracity bonds, stories as NFTs, or being able to see the biases of journalists who have written particular things—could create living objects that people can interact with.
Providing incentives to upgrade stories and write follow-up stories could create a great marketplace for that. I’ll keep digging, keep looking, and keep asking around. We’ll see where this goes. I hope whoever ends up buying it—it's not me—reforms the institution to be a bit more objective and fair. Regardless, I think this is a great topic for broader discussion. Just a little bit of money and effort could potentially build something quite significant and far more valuable than 200 million. Those are my comments on it, and I hope they were of some value to you. Cheers!
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